High Cost of a Bad Hire

I focus so much on how to keep great people I thought it might be a good idea to look at the repercussions of making a bad hire.

In a survey completed last year by Right Management they reported that the cost of a bad hire ranged from one to five times annual salary. Twenty-six percent of respondents reported that replacing an employee that doesn’t work out cost their organizations three times annual salary and another 42 percent said bad hires cost two times annual salary.

ADP offers a calculator to help you find the cost of a bad hire for your organization.

But what about the costs to team morale? Have you ever had to work with someone who really shouldn’t be on your team? Of course you have and the results was that person dragged everyone down.

So when you hire, hire for skills but also for attitude and the strengths they bring to your team!

Copyright 2007 Cindy Ventrice

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6 Responses to “High Cost of a Bad Hire”


  1. 1 Sue Massey February 25, 2008 at 11:46 am

    I found your site on google blog search and read a few of your other posts. Keep up the good work. Just added your RSS feed to my feed reader. Look forward to reading more from you.

    – Sue.

  2. 2 bennyinny February 25, 2008 at 12:31 pm

    I couldn’t agree more. To use a sports analogy – I often think that the hire I make should be the best available talent – not necessarily the best person for the specific position. It has come to make my teams much better and much more adaptable and flexible. And it did not matter of what division that team was part.

    The issue I run across that is similarly costly is when you are given a team that has been together and within it lives the bad apple. That is the cost of a previous bad hire – and now that they have some longevity and seniority it makes the situation even more uncomfortable.

    Ben

  3. 3 Cindy Ventrice February 25, 2008 at 1:31 pm

    It is difficult when you inherit a bad hire. The best you can do is hold them accountable and work toward resolution, even if that means the long hard process of removing them from the team.

    Cindy

  4. 4 May March 5, 2008 at 10:42 am

    The problem I have seen in my own team ian under-performing team-mate. He was hired at a time when the manager was trying to build the team, to handle larger volumes of work. But, during the hiring process the short-listed candidates were not ‘ideal’. Our manager ended up hiring, quote, “the best of a bad lot” and now there seems to be very little accountability for someone in a well paid position, who is not delivering. Our team does not handle more volume, as was the goal of hiring in the first place.

    My question would be: How do you adjust the hiring process to identify those who may be better suited, while still short-listing based on resumes? (It is unrealistic to interview everyone.) In your experience, are there signs to look for?

    Much appreciated.

  5. 5 Cindy Ventrice March 21, 2008 at 4:57 pm

    Hi May,

    Sorry for the delay. Something caused your comments to end up in the spam folder.

    You provide an excellent example of why managers should never hire best of a bad lot. I am sure you agree that you would have been better off short handed.

    Accountability after the hire is a completely different issue. Maybe the manager is embarrassed? If only he or she realized just how much it affects the whole team, maybe action would be taken!

    As for you question of what to look for on a resume. That is tough. But on the resume? Hmmm… First off resumes are so misleading. I believe research showed over 40 percent to contain some inaccuracy.

    It is probably best to add a step between resume and interview. I would recommend working with an applicant screening tool. There are companies that specialize in what is called ‘scientific applicant screening.’ They can better determine whether an applicant is truly suited for the job.

    Cindy


  1. 1 Employment Wages » High Cost of a Bad Hire Make Their Day Trackback on March 27, 2008 at 1:56 am
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My name is Cindy Ventrice. I am the author of the best-selling book Make Their Day! Employee Recognition That Works and the companion guide Recognition Strategies That Work.

My work has been quoted in The New York Times, Alaska Airlines Magazine, Workforce Magazine, and Tim Sanders' book The Likeability Factor.


Visit my website www.maketheirday.com today!


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