Making a bad hire can be costly. That cost goes beyond just a financial cost. When a bad hire is made, the company and the team pay for it in the long run. For this reason, it is important to take the time in interviews to make sure that the candidate is going to be a fit on all basis including skill set and company culture fit.
How much does a bad hire really cost?
The simple equation created by the U.S. Department of Labor is 30% of the employee’s first-year earnings. For example, if an employee is making $100,000 in their first year, it will be a $30,000 cost to the company if it turns out to be a bad hire. However, other reports say that the cost can be much higher than that. A report from the CEO of Link Humans says that it can cost as high as $240,000 in expenses when taking into account the costs of hiring, retention, and pay. This doesn’t even take into account the cost that comes with disengaged employees’ lost productivity. Making bad hires is a sure way to deplete financial resources for your team.
The cost outside of money
The obvious answer is productivity, which of course ends up having a financial impact. The loss in productivity, especially for smaller companies, can make it difficult to reach company goals. This can then also have an effect on your clients. If productivity goes down, your team’s reputation may also go down with it. Not to mention, the cost of time and work put in by other employees or supervisors to make up for the loss of production. There is also the time put into training the bad hire and getting up and running after they are brought into the company. Don’t forget, time is money when it comes to business.
How to avoid a bad hire
At this point, with the cost of hiring, the lost costs that come with a bad hire, and the time and resources wasted, it is best to avoid a bad hire if possible. As chemical recruiters, we are checking to make sure that the candidate not only has the skillset the hiring manager is looking for but also is a cultural fit for the company. Before interviewing candidates, think about what personality types work best in your company. For example, someone who likes to wear multiple hats may be good for a small company. Or, knowing what personalities will not work, such as someone who thinks they are the smartest person in the room or does not like to work with others may not work for a team environment. When looking at skills, consider how much time is available to train this person. Do they need to hit the ground running or will there be someone to mentor them until they are up to speed? Watch out for red flags such as a candidate whose only concern is compensation, who talks poorly about previous employers, who cancels interviews last minute, or who is slow in communication during the hiring process.
Bad hires happen. Continuously making bad hires will be a cost that will add up quickly. Take the time and necessary steps during the interview process to try to avoid making bad hires. For help, contact your chemical recruiting partners to help ensure you are bringing the right candidates onto your team.
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