Hiring
a new member of any team is no easy task. Every company sinks thousands of
dollars into each new employee via hiring costs, wages, and training. However,
not every employee ends up being the right fit for the job, resulting in a bad
hire. According to a December 2012 CareerBuilder survey, these bad hires
can cause the company many different issues ranging from poor work quality to
workplace turmoil to customer dissatisfaction. Ensuring the individual is a
right fit for the organization before bringing them in is essential to prevent
both bad hiring costs and hires’ remorse.
Recently,
we began writing pieces about employee vetting processes. First we wrote about The Importance of Employee Vetting from a security and
image perspective. Then we wrote about The Importance Social Media Policies in the entire
employment process from background checks to continuous evaluation. Now we’re
going to tackle the issue of cutting your number of bad hires by enhancing your
hiring process.
Calculating the Cost of a Bad Hire
To get
a basic idea of how much a bad hire can financially cost your company, you can
use ADP’s Bad Hire Calculator. Considering the
data sources used to compile this tool are approximately 10 years old, the
costs of bad hires have likely risen since the formula was created. However,
these direct financial costs connected to the hiring process are not the only
costs companies pay when they make a bad hire.
One
major downside to a bad hire is the negative impact it has on the organization
as a whole. Managers report that bad hires
ultimately bring a negative influence to the business, cause a decrease in
employee morale, and waste managers’ time with unnecessary supervision. When
bad hires are let go, it also leaves vacancies in the company which burden the
current staff with an extra workload and potentially result in lost
opportunities during the replacement hiring cycle.
The Bad Hire Solution: Enhanced Background
Checks
When
you consider that the costs of a bad hire are in the thousands of dollars,
running additional pre-employment screening methods on advanced rounds of
candidates is a wise investment. Many employers report they are rushing to hire candidates and lack the intelligence crucial to making
wise hiring decisions. You can improve your company’s hiring process by gaining
the intelligence you need by creating a comprehensive employee screening
solution for your final candidates that will capture the intangibles necessary for the position. There are two main
solutions you should consider when enhancing your pre-screening process:
Resume
& Application Vetting – With the current
state of the economy, employers report that resume fraud is a persistent issue.
In order to ensure your candidate was truthful in their resume and on their
application, you can vet applications and resumes using a variety of techniques
spanning from reference calls to online investigations. Social media sites like
LinkedIn can assist with confirming the timeline individuals present on their
resume, and you can build networks of coworkers and classmates to demonstrate
personal connections to institutions. Finding inconsistencies on resumes can
help reduce the amount of candidates in the final rounds of the hiring process
and provide crucial intelligence to making the right decision.
Incorporating
Social Media Data – It can provide a
wealth of information about a candidate’s personality, allowing you to access a
rich set of personal information not contained on resumes or applications. Social media can provide you with an inside
glimpse into the lives of individuals ranging from their technical ability to
their general demeanor and outside interests. It can also give you valuable
data about how individuals interact with others and handle adversity and
conflict. This data can be crucial to ensuring you hire someone whose
personality will mesh with your current staff and can assist with intelligence for
your final round of interviews.
While
additional screening methods do bring additional costs, if you only run these
methods on serious candidates rather than rushing to a decision, you can
actually save your company thousands of dollars in bad hiring costs.
