The cost of a bad hire – do you really want to take that risk?

The cost of a bad hire 

Do you really want to take that risk?

Killian Glendon - Pure JobSearch

By KILLIAN GLENDON

01.12.2019

In my last piece, I touched base on how the calibre of your management can make the difference between profit and loss.

If we dig deeper into this statement, we can quickly conclude that the true cost of a bad hire is more than you may think. For example, for a small company, Forbes estimates the price of a bad hire is at least 30% of the employee’s first-year’s earnings. You could quite quickly quantify the financial and time-spent impact of hiring and then subsequently losing a senior executive but what else should be taken into account?

Poor leadership

It’s estimated that over 80% of employee decisions to resign have been directly caused by other employees.

Onboarding a senior candidate without the right technical skills is one thing but recruiting one without the right leadership attributes can be a killer. Poor leadership can lead to other key employees deciding they are no longer on board and leaving the organisation. A very high price to pay if these individuals consistently performed above expectations, right?

Morale

High morale has a great influence on loyalty to the company, higher profitability and increased productivity.

In a Robert Half survey cited by the Entrepreneur Magazine, it was reported that bad hires negatively impacted the workplace morale up to 95% of the time.

Reputation

Senior hires may very well be known in the market and we all know that news travels fast. No company wants to have the reputation of not hiring the right individuals and those you hire represent your business. If they aren’t just right, your company’s reputation could well be tarnished and then perhaps you’ll have problems hiring upper-quartile individuals going forward.

And afterwards?

What about if a chaotic leader’s way of working stays within the organisation even after they’ve left? Resetting and remoulding a negative or toxic mind-set with a team or larger group of employees also takes time, energy and resources.

The time it can take to spot a bad hire can vary and could mean wasting vast amounts of time and finances to fix the situation, taking away from the focus of finding just the right candidate and continuously building a successful business.

So do you want to take the risk?

A key part of my process is short-listing, involving thorough due diligence. I scan the market and conduct first conversations and discussions before you have to spend any time at all on reviewing candidates. Over the years, I’ve developed the skills to pinpoint the attributes so needed for senior management hires and also have learnt how to expose potential exaggerations.   

Remember that you can’t afford to take risks when dealing with positions that could fundamentally impact your bottom line. You need a specialised partner by your side, dedicated to working closely with you to deliver just the right fit, at the right time.

In my last piece, I touched base on how the calibre of your management can make the difference between profit and loss.

If we dig deeper into this statement, we can quickly conclude that the true cost of a bad hire is more than you may think. For example, for a small company, Forbes estimates the price of a bad hire is at least 30% of the employee’s first-year’s earnings. You could quite quickly quantify the financial and time-spent impact of hiring and then subsequently losing a senior executive but what else should be taken into account?

Poor leadership

It’s estimated that over 80% of employee decisions to resign have been directly caused by other employees.

Onboarding a senior candidate without the right technical skills is one thing but recruiting one without the right leadership attributes can be a killer. Poor leadership can lead to other key employees deciding they are no longer on board and leaving the organisation. A very high price to pay if these individuals consistently performed above expectations, right?

Morale

High morale has a great influence on loyalty to the company, higher profitability and increased productivity.

In a Robert Half survey cited by the Entrepreneur Magazine, it was reported that bad hires negatively impacted the workplace morale up to 95% of the time.

Reputation

Senior hires may very well be known in the market and we all know that news travels fast. No company wants to have the reputation of not hiring the right individuals and those you hire represent your business. If they aren’t just right, your company’s reputation could well be tarnished and then perhaps you’ll have problems hiring upper-quartile individuals going forward.

And afterwards?

What about if a chaotic leader’s way of working stays within the organisation even after they’ve left? Resetting and remoulding a negative or toxic mind-set with a team or larger group of employees also takes time, energy and resources.

The time it can take to spot a bad hire can vary and could mean wasting vast amounts of time and finances to fix the situation, taking away from the focus of finding just the right candidate and continuously building a successful business.

So do you want to take the risk?

A key part of my process is short-listing, involving thorough due diligence. I scan the market and conduct first conversations and discussions before you have to spend any time at all on reviewing candidates. Over the years, I’ve developed the skills to pinpoint the attributes so needed for senior management hires and also have learnt how to expose potential exaggerations.   

Remember that you can’t afford to take risks when dealing with positions that could fundamentally impact your bottom line. You need a specialised partner by your side, dedicated to working closely with you to deliver just the right fit, at the right time.

Killian Glendon - Pure JobSearch

By KILLIAN GLENDON

01.12.2019

+ 352 621 698 225

killian@purejobsearch.com

65 boulevard de la Petrusse
Luxembourg
L-2320

+ 352 621 698 225

killian@purejobsearch.com

65 boulevard de la Petrusse
Luxembourg
L-2320