Have you had to cope with a bad hire -- and the after-effects?
According to a new CareerBuilder study, hiring the right person can be a difficult decision to make, and the consequences can cost your business hard-won profit in a volatile economic environment.
The cost of hiring the wrong person can be high. Not only does the recruitment process begin once more after dismissal, but advertising the role, time spent filtering CVs, interviewing in person and by phone can all add up in both wasted employee time and lost revenue -- and that's before you count the training costs.
The human resource solutions firm says that these kinds of losses are common, and the majority of businesses have suffered from it. Sixty-nine percent of employers reported that their companies have been adversely affected by a bad hire over the past year, with 41 percent of those businesses estimating the cost of each mistake to be over $25,000.
Twenty-four percent said a bad hire cost them more than $50,000.
What can the effects of a bad hire be? According to the survey, the most common prices businesses pay are:
- Less productivity -– 39 percent
- Lost time to recruit and train another worker -– 39 percent
- Cost to recruit and train another worker -– 35 percent
- Employee morale negatively affected -– 33 percent
- Negative impact on clients -– 19 percent
- Fewer sales -– 11 percent
- Legal issues -– 9 percent
In addition, some characteristics of a bad hire were poor quality work (67 percent), teamwork issues (60 percent) and a negative attitude (59 percent).
But why do companies make poor hiring decisions? According to the survey respondents, rushing the process is the main mistake they made, caused by pressure to fill a job opening. In addition, 9 percent didn't check references, 22 percent said there was a lack of "talent intelligence," and 10 percent said that the lack of recruiters available due to the recession put pressure on the application process.
One in four stated that sometimes, it's simply a mistake.
"Whether it's a negative attitude, lack of follow through or other concern, the impact of a bad hire is significant," said Rosemary Haefner, vice president of human resources at CareerBuilder. "Not only can it create productivity and morale issues, it can also affect the bottom line."
The online survey was conducted within the United States by Harris Interactive on behalf of CareerBuilder, and received responses from 2,494 hiring managers and human resource professionals this year.
Image credit: Flickr
This post was originally published on Smartplanet.com