How Much Will a Bad Hire Cost your Company?


How Much Will a Bad Hire Cost your Company?

Hiring employees is an important part of expanding your business. When you hire the right person for a position in your company, it helps your company thrive and grow. If you make the wrong choice and make a bad hire, it spells bad news for your company that can end up being a very expensive decision.

The hiring process itself takes up time and resources for your company. You may need to advertise for the available position. Depending on the level of the position you wish to fill, you may decide to work with an agency or a professional recruiter to fill the position. Someone within your organization must take time to review resumes and application materials received from candidates.

If the position is left unfilled for a time, you may be dealing with lost productivity. The morale in your company may suffer until you can fill the available position, especially if your existing employees are being expected to shoulder a higher-than-usual workload until you can find a replacement.

Bad Hire Will Cost your Company Thousands

A lot is riding on finding the right person to fill a position with your company, and you need to get it right. According to the results of a survey released by CareerBuilder, a bad hire could cost your company $11,000.00 if you have 500 employees or less. As your company increases in size, the financial hit of a bad hire also increases; for a company of more than 500 employees, it could cost you approximately $22,000.00. For a business employing more than 1,000 workers, the cost of a bad hire reaches about $24,000.00.

What Makes an Employee a Bad Hire

The CareerBuilder survey also asked employers to report on what they thought made a new employee a “bad hire” for their company. The respondents identified a number of issues that stood out for them:

  • Employees who didn’t produce acceptable quality of work 58 percent
  • Employees who demonstrated a “negative” attitude 52 percent
  • Employees who didn’t work well with their new coworkers 51 percent
  • Employees skills didn’t match what they claimed they
  • could do on their resumes 49 percent
  • New employee had attendance issues immediately on
  • being hired 45 percent
  • Customers complained about the new employee 38 percent

The survey results also revealed that 20 percent of employers knew very quickly (within the first week) after hiring a new employee) whether or not they had made a good decision. More than half of the employers knew within three weeks whether a new hire was going to be an asset to their organization.

Thorough Hiring Process Lowers Risk of Making Bad Hiring Decisions

Making a hiring decision involves more than simply placing a person into a “spot” in your organization. The person who is selected to fill a position must also fit in well with your team. If you make a bad hire, you will need to start over and repeat the process again, spending several thousands of dollars in the process.

A candidate’s resume lists their education and experience. You owe it to yourself, your organization and your team members to use all of the tools at your disposal to ensure that whoever you bring into your existing team is going to not only be a good fit, but will also be an asset. This involves digging deeper when evaluating candidates and performing further testing.

Psychometric Testing for Job Candidates a Tool to Make Better Hiring Decisions

Psychometric testing is a way for employers to learn more about candidates who are interested in open positions. Atman’s Psychometric Test measures traits that don’t appear on a resume and can’t be calibrated in an interview. This test can show you how candidates stack up in important areas, such as motivation, sociability, leadership, dealing with stress, and more.

The results of the testing can’t make the decision for you about which candidate to hire. They are meant to provide you with more information about the candidates so that you can make an informed decision.

As an employer, you know that an employee who demonstrates a positive attitude and who is coachable can be trained in procedures. The results of the psychometric tests can help you to feel more comfortable that you have made the right choice when you extend an offer of employment to a candidate. There’s a lot riding on that decision, and you want to make sure that you get it right, for your company and your team.

Please wait...

Knowledge is Power

Knowledge is a necessity for all savvy investors. To achieve great CONSISTENT returns, smart investors know they need all the information they can get. We have your information!