How to avoid the unexpected cost of a bad hire

Shaun Thomson

The consequence of putting forward the wrong candidate can be not only financial but reputational, and have a lasting impact on the organisation, its employees and the bottom line. Shaun Thomson explains

The news that 48% of SMEs are expected to hire in 2014 will certainly be music to the ears of the recruitment industry.

However, there is a risk that these new employees will hinder, not help, the growth of these businesses if they aren’t right for the role. A bad hire can be worse than no hire at all, and a serious drain on the bottom line – in our experience the cost of a bad hire can reach as much as 150% of the individuals first year of compensation.

With that in mind, businesses and agencies must work together to ensure that they implement processes that will help them enhance the success of identifying and retaining the right employees. Agencies have a key role to play in this regard and instrumental to help educate these businesses.

Here are some top tips:

1.     Be prepared 

Before writing the job description businesses must be absolutely clear on their recruitment needs. At Sandler we suggest using the SEARCH model to create a template, which stands for skills, experience, attitudes, results, cognitive skills and habits. Understanding the type of person that will fit in well with a team dynamic and company culture is the first step to finding a candidate that will contribute to the overall success of the company and become a loyal employee. Attitude is key, skills can be taught.

2.     Interviewing process 

One of the pitfalls of the average interview process is that it only identifies someone who can theoretically do a job. Businesses must use tests and techniques what will identify if a candidate can and will do the job. 

It is also important to think strategically about what you want to get out of the face-to-face interview. The amount of information you gain from individual is proportional to the amount of information you gather, not the information you give. Make listening a key tool in the interview process.

3.     Think long-term 

Employees want to work somewhere where they are valued. With that in mind, hiring someone must be the first step on a wider development programme.  Organisations need to consider the long-term investment in employees when making new hires, such as the provision of informative induction and training courses. This will educate the new hire on their roles and responsibilities and give them clear guidance on what is expected of them in the long-term and where the role can take them. This solid foundation and guidance means they are fully aware of what they need to do to succeed, setting both parties on the road to success.

4.     Track your progress

Measurement is key to further enhancing the recruitment process. When processes work they should be replicated and shared. If something doesn’t work then lessons should be learnt and it shouldn’t be repeated.

Making sure the right recruitment processes and procedures are in place is a win/win for businesses and recruiters alike. Once on-board, the right people help businesses grow, which means that it won’t be long before there is another opportunity to hire again. 

Shaun Thomson is CEO of Sandler Training in the UK