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The possible consequences of a bad hiring decision

Nov. 23, 2020
When hiring someone, it is not just about their skills and abilities. The new hire should also be someone who fits into the culture of the organization.

Under the best of circumstances, there are many ways a hiring decision can turn bad. And there isn’t a company around that doesn’t have some regrets surrounding its hiring decisions.

Certainly, there is an impact to the bottom line when a new hire does not work out, but in a recent blog, Adam Robinson, co-founder of Hireology, says the impact of a bad hire goes far beyond financial consequences.

The morale of your other employees — especially those who have to work closely with the bad hire — can suffer. Employees feel frustrated, Robinson says when they have to work alongside someone who is not pulling their own weight or one who simply has a bad attitude. Employees will come to resent having to do extra work in order to make up for someone who is not doing what they were hired to do. 

Productivity can also take a hit if someone fails to complete the tasks they have been assigned. Deadlines can be missed, or quality can suffer.

A bad hire can also be a drain on management time as managers offer guidance and training to get the new hire up-to-speed rather than cutting their losses and letting the person go once you realize you have made a hiring mistake. Not only is management’s time used up trying to get the employee performing as needed, but additional time must be spent to make sure the work the employee is completing meets company standards.

You also run the risk of damaging your company’s reputation, Robinson said in the blog post. He explains that “if a new hire is rude to customers or doesn’t follow through with promises, you can lose business and you may not always be able to repair the damage done.”

And of course, there is the financial cost to consider. You are losing money when you hire someone who is not doing their job, but you also sacrifice your recruiting and onboarding costs, which can be quite significant.

Robinson cited U.S. Department of Transportation estimates that a bad hire can cost your company 30% of that person’s first-year earnings.

But don’t despair, according to Robinson there are things you can do to mitigate the risk of making a bad hiring decision.

Make sure the candidate fully understands expectations about the work they are being hired to perform and the salary they will receive. This conversation needs to begin during the initial telephone screening call.

When you are hiring someone, it is not just about their skills and abilities. You also need to hire someone who fits into the culture of your organization. Make sure the new hire understands your company’s values and that their values align with what your company stands for.

Review your onboarding process to make sure it prepares the new hire for the job. Robinson cited Glassdoor research that said a quality onboarding experience increases retention and productivity.

Finally, if you want to get the best people working for your company, you have to be competitive when it comes to salary, benefits and advancement in the company.

One last piece of advice: Once you realize you have made a bad hiring decision, respond quickly to fire that person following the procedures you have in place regarding employee termination. When it comes to a bad hiring decision, it is best to cut your losses as soon as possible.

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Jane Clark focuses on managing the member services operation at NationaLease as vice president of member services. She works to strength member relationships, reduce member costs, and improve collaboration within the NationaLease supporting groups.

About the Author

Jane Clark | Senior VP of Operations

Jane Clark is Senior Vice President, Operations for NationaLease. Prior to joining NationaLease, Jane served as Area Vice President for Randstad, one of the nation’s largest recruitment agencies, and before that, she served in management posts with QPS Companies, Pro Staff, and Manpower, Inc.

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