Bad Hires Have Negative Impact – This Is How To Prevent Them

This article has been in my drafts for quite some time before I finally found the time to finish it in a proper way. In the first version my intent was to put an accent on the consequences of a bad hire, and that no matter how prepared we might think we are, some things can still slip up. Later on, I decided to spice it up with a real life story. I hope you’ll find it both useful and entertaining.

If until some 10-15 years ago we did not have hard evidence on the wide spread consequences of a bad hire, today we have tons of researches and case studies that offer information on the negative effects of an improper recruitment process. While the U.S. Department of Labor estimated that the average cost of a bad hiring decision can equal up to 30% of the individual’s first-year earnings and SayIt Communications estimated the return on investment (ROI) of a bad hire at -298%, the study of the National Business Research Institute (NBSR) linked bad hires to a series of negative effects in different areas such as negative impact on clients relations (18%), decrease in sales (10%), decrease in employee morale (37%). So practically, besides the easy visible effects such as increase of hiring costs, a bad hire also influences:

  • Hiring costs – HR staff costs and cost of other involved employees in the recruitment and interviewing process, advertising costs
  • Training costs – training the new employee
  • Team and company performance – drop of effectiveness, sales and quality
  • Internal relations – damaging team work, peer communication and collaboration
  • External relations – decreased customer satisfaction, loss of clients
  • Employee engagement – decrease in employee morale
  • Organizational culture – negative effects on the elements of the culture etc.

Eventually, taking into consideration that as many as 75% of the new hires is due to the need to replace employees who have left the company, and as much as 80% of employee turnover, according to the Harvard Business Review, is due to bad hires, the bad recruitment process and decisions are the main creator of the demand for new hires.

So what are the reasons for a bad hire?

According to NBSR the no. 1 reason why companies make bad hires is the need to fill the job quickly (43%), followed by the lack of qualification for the job position (22%), lack of adjustment of the sourcing techniques per open position (13%), lack of recruiters (10%) and not checking references (9%).

Spicing It Up (Or the real life story)

No matter how successful and good we are at certain things, for many of them we’ve come a long way learning and improving through many wins, loses, success and failures… or simply through our experience. My recruitment adventures started a bit more than 10 years ago and since then (I hope) I’ve learned a lot. Though now I am a much better interviewer than I was back in those days, this didn’t came as easy as a piece of cake. On contrary, I did pick up some interesting experiences along the way. From a learning perspective, one of these experiences was extremely valuable to me, and I think worth for sharing.

Here it goes…

It was during the first years of my recruiting experience when I was still learning the arts of recruitment. This particular experience thought me a lot and helped me increase the level of awareness towards my instincts and intuition. In a manner of speaking, it freed my “inner voice” which turned out to be very helpful in the selection of the right candidates in the years to follow…

We were filling-in a couple of senior specialist positions within one specific department. As usually, we had a lot of applications and a long and thorough process involving several steps in order to select the ones that will fit in the best. In average we were receiving between 50 and 100 applications for such positions.

Taking into consideration the education and previous experience, one of the candidates was a very good match having relevant experience from similar companies within the same market and industry. She came on the interview well prepared, knowing the industry, the job and having almost perfect answers to most of the questions. She showed desire and calmness… She knew what she was talking about.

However, one thing made me think about this candidate…

Everything was to perfect, making it somehow strange and artificial. The answers were well thought of and planned (…you might say, well she prepared well!). But there was something else that was even more suspicious. Whenever she was describing a previous experience she was always talking about the technical aspects and results, but never about the cooperation and communication with the colleagues. I remember that she couldn’t remember of a situation when she had a disagreement or an argument with a peer or manager… Something was telling me that there is something behind it, but I said, hey, maybe it is just me seeing things that aren’t really there. Some of the co-interviewers said that most probably they would give the same answers to this kind of questions… so we moved on.

As I said, she was very calm. That was the first time I’ve seen someone being so calm during an interview. No emotions, no stress, no change of voice… just calmness and solid answers. At the moment I didn’t know why, but again I thought that there was something that I didn’t like about her… On the other hand maybe she was calm because she felt experienced enough to easily answer the questions.

Taking that we had solid relationship with her previous employer, we asked for references and got an answer that she was an OK employee and that she knows her job.

So we hired her.

One month after that her manager called me and said “We hired a total idiot!”

Just two weeks after we hired her she started causing problems within the team… “the volume of the music that a peer played on his laptop was always too high; another one was speaking on the phone too loudly; she spoke to them only when she had to; she couldn’t concentrate; the manager was weak because he didn’t sanction the behaviors of her colleagues; so she “had to” take things into her own hands and make them change; so she started arguing with everyone; she couldn’t finish a job properly because the others were “irresponsible and incompetent”; she was always right and everyone else was always wrong etc. etc.”

So we fired her.

It was clear that she slipped through the recruitment process and we weren’t able to see some very negative characteristics. Characteristics that she very successfully hid from us.

I looked back at the process. Everything seemed OK. We did a proper screening, interviews, testing and checked references. We asked the right questions and got the right answers. She did not show, or at least we could not see, any crucial negative characteristics.

I went through my notes. Everything seemed OK. Everything except two notes “I feel this isn’t the real picture”, “There is something wrong… it’s too artificial”. These notes weren’t based on the answers or the behavior we saw during the interview. It was the instinct and intuition saying something wasn’t right. It was an “inner voice” I didn’t listen to. An “inner voice” that proved to be right.

That was a turning point and a truly valuable lesson… The instinct may be right or wrong, but should be taken into consideration. The final decision shouldn’t be brought based on the instinct, but if there is something inside of you telling you that something just isn’t right, then listen to that voice and double-check.

So what are the steps to prevent a bad hire?

  • Prepare well for the interview. Make sure you cover the experience, but also the character, attitude and behaviors
  • Include tests and case studies
  • Include different type of employees in the recruitment process and ask for their opinion (e.g. let your assistant call them to an interview, or your secretary welcome them when they come to the interview)
  • Adjust the sourcing and the interview style / questions per job position
  • If you are not good at interviewing, hire a pro
  • Include psychological and behavioral test
  • Put them through an Assessment Center
  • Always check (and double check) references and ask different people
  • Ask more questions and challenge them to see what they say and how they react
  • Do another interview (and an additional one if you have to) so that you clear up all the dilemmas

But how does a bad hire look like?

In order not to mislead the reading audience with the story that I told you before, a bad hire is not only the one that has a bad attitude or behaviors. The reasons why someone can be qualified as a bad hire are more, including:

  • Lack of competences (knowledge, skills and experience)
  • Negative attitude
  • Culture misfit
  • Not a team player, or cannot fit in the existing team
  • Lack of accountability and ownership
  • Lack of professionalism, compliance and ethics
  • Lack of sense for quality and accomplishment
  • Lack of customer centricity
%d bloggers like this: