Bad Hires are Costing Your Organization!

According to a recent study by CareerBuilder, two out of every three U.S. employers surveyed reported making a bad hiring decision in 2013. Employers reported that these bad hires lowered productivity, affected workplace morale, and in some cases even resulted in legal issues.  At a time when the job market is competitive and the economy is starting to rebuild, hiring the wrong employee can be extremely costly for an organization.

Some mistakes were beyond the hiring manager’s control.  Some of these mistakes could have been avoided by using smarter hiring processes and working with a staffing agency that offers temp-to-permanent services with extensive background, skill, and personality checks. Either way, it’s important to know the true costs of a bad hire.


Impact and Costs
A lot of time and effort goes into the hiring process, so the cost of a bad hire isn’t just the money you pay the less than adequate employee. Think about all the following areas that are impacted:

– The recruiter’s time
– Salary and benefits while employed
– Efforts spent onboarding and training
– Productivity loss
– Profitability loss
– Morale of co-workers
– Unemployment or severance
– Additional fees to hire a new employee

When you put a monetary value on these areas, the cost of a bad hire adds up quickly
– 41 percent of U.S. employers said a bad hire cost over $25,000
– 27 percent of U.S. employers surveyed said a bad hire cost the company over $50,000
– It costs an average of $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee, and $40,000 to replace an executive.
– On average the cost of a bad-hiring decision can equal 30% of the year’s potential earnings.

Characteristics of a Bad Hire
It’s usually fairly easy to tell when you’ve made a bad hire.  The employee is lazy, they’re underperforming, and not fitting into the company culture.  Here are a few of the most common factors employer’s reported in bad employees:

– Failure to produce proper work
– Failure to get along with other employees
– Negative attitudes
– Failure to show up on time
– Missing deadlines
– Customer complaints

Importance of a Proper Hiring Process
As mentioned above, having a hiring process where employees are interviewed thoroughly and their references are checked is the most effective way to eliminate bad hires.  Bad hires are ultimately a mismatch in personality, a lack of experience, or a change in priorities.  The experienced recruiters at Area Temps have the knowledge, time, and experience to improve your hiring process, by delivering only the most qualified talent.  For over 25 years, Area Temps has been a leading human resource-staffing partner in the Greater Cleveland area. Contact us today and eliminate the cost of bad hires in your organization.

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