The Negative Consequences of Bad Hiring Decisions

bad hiring decisions
Recruitment is a major function of the operation of a business. You spend money, time and effort hiring and training new employees. Therefore, you must be sure not to include the ones who shouldn’t have been brought into your premises in the first place.

Bad hiring decisions can have fatal consequences to your business. This includes the havoc the wrong employee can cause and the negative impact that same employee can create. This could lead to lost business opportunities. Another loss you may possibly incur for hiring the wrong people is the cost of repeating the process (back-job) to rectify the mistake. Add to it the added pressure and load your other employees must carry to compensate for the unproductive team-member and your business would be in big trouble.

If this has happened to your company, it should end right here and now.

Many hiring managers keep themselves busy trying to tell businesses about the unwanted cost of bad hires. So to keep us aware of it as a real problem, please read on to see hiring decision statistics from greenjobinterview.com

• The US Department of Labor and Statistics asserts that the average cost of an erroneous hiring decision can be as high as 30% of the employee’s first-year earnings.

• Even successful business and hiring managers are prone to commit hiring mistakes. According to Tony Hsieh, CEO of the leading online shoe retail Zappos, his company has spent more than $100 million on bad hires.

• A whopping 66% of employers acknowledged the negative effect bad hiring decisions has on employee morale. Another 18% stated that bad hire has negatively affected their relationships with clients and 10% expressed that bad hires were the primary reasons for the decline in their sales.

• The National Business Research Institute (NBRI) reveals that in 2012, 66% of employers declared that they experienced negative consequences of bad hires. Out of these employers, 37% confirmed that the hiring mistake negatively affected employee morale, 18% experienced bad client relationships while another 10% declared lost sales.

• The same study from the NBRI said 43% of their company-respondents attributed the bad hiring decisions to the need to fill an open position quickly.

• According to HR.com, the cost of replacing a salaried employee is $7,000. The site added that the cost needed to replace a mid-level employee is $10,000, and it takes $40,000 to replace a senior manager.

• According to Harvard Business Review, 80% of employee turnover is triggered by bad hiring decisions.

• A study conducted by Robert Half, a leading American human resource consulting firm said 36% of executives surveyed declared poor performance problems and poor skills match as the main causes of failed hires.

The Consequences of Bad Hiring Decisions

A hiring mistake can really cause serious troubles to any organization regardless of size. A hiring manager who commits this error can expose his or her company to these possible consequences:

1. Lost Productivity

A bad hire is often associated with an employee’s failure to deliver satisfactory performance. This translates to wasted time and money. A company that invests on a particular employee without getting a fair output in return is losing.

2. Decline of Staff Morale

A bad hire can pull a team’s performance down. This can be due to lack of skills or bad attitude. It can have a negative effect on the morale of the rest of the workforce. This is true especially if you ask someone to cover a struggling colleague who is receiving the same salary.

3. Finding a Replacement means Costs

Hiring new employees to replace others who have left involves costs. The processes needed to hire a replacement can be expensive. This includes the need to publish your job offer, sort out applications, conduct interviews and do onboarding procedures. Your company must shoulder all these in order to restore normalcy in your business operations.

Bad hiring decisions can have a big negative impact on your business. You must avoid it to prevent unnecessary expenses. This helps to keep the morale of your staff soaring high. Make this happen by asking for “employment screening solutions near me” to become a part of your hiring system.


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