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Poor Hiring Is Costing Your Firm More Than Just Dollars

High employee turnover and poor hiring decisions go hand-in-hand.

 

It’s a simple cause and effect scenario.

 

When you hire the wrong people for the job, you’re bound to encounter obstacles down the line. In fact, 80% of employee turnover can be attributed to poor hiring decisions.

 

If your firm can nip this problem in the bud, you’ll benefit from higher employee retention, more productive and happier employees, and a plethora of other workplace benefits.

 

Let’s dig into why poor hiring is so detrimental to a firm and how it costs your business more than just dollars.

 

Hiring Costs

The hiring process is expensive. Consider everything that goes into selecting a new candidate for your team:

  • Recruiting
  • Interviewing
  • Travel
  • Training & Onboarding
  • Assessments
  • … and more.

 

Not all hiring processes are the same and you may experience more or less expenses when you take on a new team member. Nevertheless, costs add up quickly; when you’re not hiring the right person, it’s essentially money down the drain.

 

If in the following weeks or months after a new hire you realize you made a poor decision, you have to deal with termination costs, not to mention restarting the hiring process from scratch.

 

Beyond The Dollar Amount

Hiring costs are inevitable; something you take in stride in the anticipation of bringing on a new team member. However, poor hiring can take a hit to your organization beyond the monetary impacts.

 

Your team takes the biggest impact:

  • Weaken team morale;
  • Decrease performance and productivity;
  • Raise concerns for their own job security.

 

It is a process for your team to adjust and accommodate to a new employee, which can distract from other responsibilities, including client relations.

 

When a team has to consistently adapt to a new member, only to have them leave shortly thereafter, it can become a frustrating and demoralizing process.

 

Why Do Employers Make Poor Hiring Decisions?

There are a number of reasons why an employer might select the wrong candidate and it’s important to be aware of why you got yourself there in the first place, so you can make sure it doesn’t happen again.

 

Consider the last time you made a poor hiring decision; does any of this sound familiar?

 

  • Rushing the process. When you need a replacement fast, you don’t give the adequate consideration to your decision. Rushing through the hiring process can inhibit your decision-making abilities and put you back in square one within a short period of time.

 

 

  • They don’t mesh with your company culture. Too many employers fail to look beyond the resume and wind up hiring for skills, rather than fit. Plenty of skills and abilities can be taught, but having the right attitude and shared vision is non-negotiable.

 

 

  • Expectations are unclear. Goals and targets need to be laid out and measured from the moment a new team member is hired. Otherwise, they don’t know what they’re working towards or what is expected of them.

 

 

  • Poor job description. Perhaps it’s an old version or the role has evolved since the posting was written. If the job description doesn’t match the reality of the position, you’re bound for trouble.

 

 

You Can Do Better

Hiring doesn’t have to be a stressful, time-consuming process if you manage it well and give it proper consideration.

 

  1. Slow down.

Don’t rush the process. You want to fill the position and get things back to status quo, but is it really worth it to fill the role with just anybody or an “okay” candidate?

 

Make your goal to find the right person for the job, even if it takes longer than you’d like.

 

  1. Hire for fit.

Look beyond the resume and consider how this new team member will fit in with your company culture. If your essential values and vision are misaligned, it doesn’t matter if they have all the “right” experience and credentials.

 

Skills can be taught, the right attitude and cultural fit are more important for a successful hire.

 

  1. Write an accurate job description.

Get the people actually doing the job to write the description, or involve those closest to the position.

 

Aside from hard skills, include soft skills that are important to the role, such as cultural norms.

 

  1. Involve your team.

Don’t make the decision alone. Include a few trusted colleagues to weigh in on the new hire.

 

Invite other managers or employees who will be working with the new hire to make sure they’ll be able to work well together.

 

  1. Make a personal connection.

A new hire should want to work for your firm, not just any business. During the interview process endeavor to create a personal connection — hiring should be a mutual decision.

 

  1. Train your team to hire for you.

When I began growing my firm, I did all the hiring. My goal with each subsequent hire was to remove myself more and more from the process, in favor of my team taking over.

 

To achieve this goal I included my employees in the hiring process, so they could understand what was important for our firm and the kind of people we needed to be successful.

 

Now, I feel completely comfortable with the hiring decisions my team makes because I know they understand our values and mission, and are highly capable of selecting the right candidate.

 

That’s not to say I have zero input, but I trust my team and am able to focus my energy on other responsibilities without the fear of poor hiring decisions.

 

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Poor Hiring Is Costing Your Firm More Than Just Dollars
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Poor hiring could be costing your firm more than just dollars. Discover how to make better hiring decisions and avoid employee turnover.
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