We all know that it’s important to hire the right people to keep costs down. Today, we’re going to dive deep into these costs and resurface with a terrifying prospect. CareerBuilder.com conducted a survey in 2017 that showed the average cost of one bad hire is nearly $15,000; average cost of losing a good hire is nearly $30,000.

Source: http://press.careerbuilder.com/2017-12-07-Nearly-Three-in-Four-Employers-Affected-by-a-Bad-Hire-According-to-a-Recent-CareerBuilder-Survey

The Costs To Consider

Wasted payroll and benefit costs of training an employee that doesn’t stick is the most obvious cost to consider when calculating the sum of your loss. Less commonly considered costs are the more indirect ones, such as additional supervision, loss of actual great employees from a sullied work environment, and overall lost yield or productivity. In the CareerBuilder.com survey report, managers reported an average of 17% of their upper management’s valuable time was spent working with under-performing employees who did not stay for longer than 8 weeks. A whopping 95% of those surveyed noted that the overall mood and atmosphere in an office is damaged by a bad hire situation. To avoid hiring the wrong person, there are several critical steps you should take before you make the final hiring decision.

3 Ways To Avoid A “Bad Hire”

1. Take Your Time – What’s the better plan? Lose thousands of dollars and ultimately days worth of agony over making a bad choice OR call every reference to check out the claims made on a resume? Yes, pick up the phone, type the emails – it pays off. When you reach a reference that a great candidate has listed on their resume and they give you a winning review of your possible future employee, you’ll know you made the right decision by doing your due diligence. A whopping 33% of the managers surveyed in the CareerBuilder.com

report, said that their “bad hire” was the result of the candidate misrepresenting their experience or skills. Do your best to reach the references and confirm from third parties that the candidates’ claims are factual. David Goldberg, CEO at SurveyMonkey says, “Let resumes and interviews be used to reject candidates but rely on real references to hire people.” The most crucial thing to ask a former employer is, “Would you be willing to rehire this person if you had the chance?” If the answer isn’t positive, then keep searching for the best person. It’s called a “red flag” and a pretty big one to boot.

2. Start Small – Even when you have that confidant feeling you’ve hired the right person, it’s still a great idea to spend the first couple weeks of their employment giving them smaller tasks or even offer a trial period.

Look for smaller tasks that will have less costly effects if they are not completed or not done well. This way, your new team member has the opportunity to exhibit a great attitude, efficiency and also get comfortable with their new surroundings and team. This allows you to correctly assess the candidate’s qualifications and personality to see whether or not they work well with your team.3. Hire a Professional Recruiting Firm – One method for nearly ensuring your success in hiring the best candidates is to use an executive search or recruiting firm. Search firms will have a much broader reach to attract and locate
qualified candidates. That is what they do all day, every day. A good firm like Hospitality Pro Search will partner with the operator and really try to understand the profile of the position not just the skills and experience, but the intangible qualities as well. The negative aspect to using a recruiter is the perceived expense. If the operator puts a value to his/her time, the expense versus the results is very small and well worth it. If you do decide to use a search firm, make sure you interview the recruiter and check their references. This way, you’re making one great hire that you can feel confidant in because you’ve found a well-vetted specialist to do the rest of your hiring.