Hiring is on the upswing, and so one of the big questions for all employers at the moment is, what happens when you make a bad hire?
Are you able and willing to determine just how much a bad hire could cost you?
Unfortunately, estimated costs range from three times base salary to many times that figure.
Generally speaking, you need to take into account the cost of recruitment advertising, interview time, training investment and relocation costs. Doing that gives you a starting point to understanding of the negative impact of a bad hire.
Unfortunately, you’re not done analyzing the situation. What about the critical intangibles that are more difficult to quantify?
A bad hire causes stress and inconvenience. As a CEO or executive, the responsibility of a bad hiring decision will weigh on your mind. You’ll spend precious time worrying about how to manage the person out of the business – time that would otherwise be spent planning to drive the business forward to achieve your long-term goals.
A bad hire could result in missed opportunities. This is especially true if the bad hire is in a client-facing role. Such a bad hire could also result in damage to an existing long-term relationship, which would involve significant time investment to repair.
So, how can you increase your chances you make the best hire?
If you decide to work with a staffing firm, find one you can work with comfortably.
You need to be confident that they understand your business objectives and culture, and the sort of person who would be a good fit.
Invest the time necessary to make sure that all of their questions are answered. It will be time well spent.
With or without the help of a staffing firm, use your contacts and networks to source potential candidates. Utilize the internet and professional networking sites to research them – you may even be able to get in touch with their past employer or a colleague who can offer valuable insights.
No matter how good your powers of perception and interview skills are, be sure that you draft a well-structured and thoughtful interview process.
A bad hire can negatively impact your bottom line and create serious difficulties and distractions. A good hire is worth their weight in gold.
About the Author
Larry spent 16 years with Century Casino’s and was instrumental in the start-up and growth of the company through expansions in Canada, South Africa, the Czech Republic, Poland and on several cruise ships as well as in Colorado. He was most recently the SVP, Principal Finance Officer and COO of North American operations for Century Casinos Inc., a multinational, Nasdaq-traded gaming company. Earlier in his career, Larry worked at the Johns Manville Corp. Larry spent 13 years in various accounting and finance functions in the company’s fiberglass manufacturing division and was key in the start-up of a molding plant in Indiana. Larry and his wife Kathy and three children live in Colorado. He enjoys four-wheeling, motorcycling, golfing, skiing and brewing beer.