The Impact of a Bad Hire
Hiring— something that is always on the mind of a fast growing company. You begin to feel pressure of trying to find someone who will fit the job description, and once you find that person you think you are done.
We know that once we have found that person who aligns with the job description that are due diligence is now complete.
What if we take this further and instead of bringing someone in because they match the job description, you bring them in for reasons on top of that. The reasons I am speaking about can/should be culture fit, team fit, company fit, personal fit to name a few.
This ultimately ties into the worst case scenario of making a bad hire and the cost of making that hire. I have spoken with multiple people from Executives to Managers who didn't seem to understand the amount of cost that goes into making a bad hire. The time to get approval for a job, the posting of that job, the sourcing of candidates, bringing the candidates in for in person interviews, hiring the candidate, on-boarding this person, equipment. The list goes on— and you can start to see why it’s important to invest time into making the right hire each time.
Think of it in the grand scheme of things. Think about a coach for a college or professional team. Keep in mind this scenario is extreme, but this will help paint the picture. A coach gets hired on for a deal of 20 million over 5 years guaranteed. Come the 3rd year things just aren't working out— the team is losing, and there is conflict with the coach and president or owner. They end up firing the coach, but at the same time have to continue to pay him or her, and on top of that they have to start the recruiting process all over for that replacement. Oh! and the big item here is once you find that replacement you are now paying 2 people to do one job! Talk about a huge waste of money.
See the cost per hire formula below.
Let’s get back to the beginning of this. What I have been saying all along. We all feel the pressure to get people in the door, but in the long run that kind of style ultimately costs your company more money.
Take the time and hire right the first time. The example of the coach might sound extreme because in most cases you don’t continue to the pay the employee who leaves, but you start the whole process over again of time, commitment,and money.