How To Contain the Costs of a Mis-Hire

Your staff is the backbone of your organization, which is why the recruiting, hiring, and onboarding process is critical to the ongoing success of your company. However, hiring the wrong person for your company can leave your entire staff feeling deflated and has the potential to be extremely expensive. 

Estimating the costs of a mis-hire

The U.S. Department of Labor claims that the wrong hire can cost your business 30% of the employee’s first-year earnings. Other resources estimate that the cost could range from nearly $240,000 to $850,000 per employee.

The costs, however, extend far beyond monetary value. The time and company resources required to train an employee often exceed that employee’s pay at the onset. Not to mention, the intangible costs involved. For example: 

  • The mental impact on current employees who are stuck picking up the slack
  • Extra time spent correcting unnecessary or careless mistakes
  • Potentially needing to repair damaged business relationships

Your company’s culture, reputation, and productivity are at stake. Taking a chance on a risky hire may end up costing your company significantly more when compared to the cost of having an empty seat for slightly longer. 

We’ve prepared some helpful tips you can keep in your back pocket to contain the costs associated with making a bad hire: 

Tip #1: Haste makes waste

It’s understandable that you have a seat that needs to be filled ASAP to continue scaling at the speed you’re used to. While it’s necessary to maintain this mindset while looking to fill a position, it’s better to take a little extra time if you’re on the fence. If possible, slow down (slightly) and prioritize a culture fit over a position fit. 

Tip #2: Focus on skillset

The next best thing you can do during the hiring phase is to evaluate a candidate’s skill set over their resume. For example, a candidate could have been responsible for certain activities in their previous role; however, that doesn’t always mean they possess a specific skill set. By evaluating a candidate’s skill set, the person you hire is much more likely to be capable of managing your position requirements. Whereas, company processes and tedious details can be taught and trained after the fact.

Tip #3: NEVER skip reference checks

Always, always, always check references. Make sure your candidate is honest, trustworthy, and professional before you bring them into your environment. The best way to screen candidates ahead of time is by calling their references to verify any accomplishments or claims made during the interview process. It takes some time and coordination to conduct reference checks, but it will be worth the extra peace of mind.

Tip #4: Partner with a pro!

Even though you probably think you can juggle it all, there’s always going to be something that gets thrown on the back burner. And, being overwhelmed is typically when it’s easiest to make a hiring “mis-step”. Choosing to invest in a recruiting agency is actually very affordable and will allow you to remain focused on all of your other important business priorities. 

External recruiters have direct experience finding, vetting, and placing candidates who meet specific requirements. You will find that having a second (unbiased) professional opinion from an external recruiter is invaluable. Plus, recruiters typically have access to a much wider pool of talent, which often results in the quick placement of quality candidates. 

Even if you find yourself in a situation where the wrong person was hired, one of the best and easiest ways to correct courses is to partner with a reliable recruiter.