All of us know that companies take a lot of time in filling the vacant position, as they want to hire the best candidate. On the contrary, a wrong selection will lead to the hundreds or thousands of dollars to a company along with huge dent on the morale and productivity of the company. According to a survey conducted by Harvard Business, wrong hiring decision is one of the major causes for approximately 80% of employee turnover. A wrong hire will cost a lot to the company, as estimated by labor department, it will cost one-third of the annual salary of a new joinee. According to a survey conducted by the Society for Human Resource Management, a bad hiring will cost the company approximately five times of his/her hiring. If a bad hire holds higher position then his/her replacement will cost much more. Moreover, he stays for a longer time then expense will be much higher.
Why Bad Hiring Costs
While hiring a candidate, there are lots of expenses associated such as conducting interview, travelling, accommodation, meals, training, orientation, testing or potential litigation in case candidate sue the company for wrongful dismissal. Moreover, you need to undergo entire process of hiring for the replacement of previous bad hiring. This will lead to lots of expenses and wastage of time.
Other major side-effects of a wrong hiring includes unhappy customer , losing clientele, losing sales, lowering of morale of co-workers and lower production. Jean Gamble, a Human Capital Strategist and Recruitment Specialist stated, “Plus, whenever someone is terminated, there’s a disruption among the other employees who begin to question what caused the termination and does it affect how their performance is evaluated, not to mention the increased work load on all the other employees who have to pick up the work of the employee who was let go.”
Reasons for Wrong Hire
One of the major reasons for wrong hire besides performance factors is the poor match of skills. Another key reason which leads to a bad hiring is that performance objectives are unclear. Chairman and CEO of Robert Half International and author of the Human Resources Kit For Dummies, Max Messmer stated, “Companies can’t afford hiring mistakes, which are costly and can erode staff morale,” he further added, “Finding the right match requires time and attention, and it’s something even busy managers need to make time for.” According to Gamble, owner of Jean Gamble & Associates, a Chicago based company considers a wrong hiring happens due to confusion between the hiring managers and human resource people about the job description.
Major Drawbacks for Wrong Hiring
A bad hiring will be like a cancer for the company, as it spreads and grows all across the organisation. A person who reflects strong negativity, negative attitude, back stabbing, inefficient as well as incompetent will certainly harm the company as well as it co-workers. Wrong wok ethics are like communicable diseases and spreads fast amongst all other co-employees. Such contagious traits need to be removed fast, as they have the potential to kill the company by affecting major assets like employees, clients and production.
A bad hiring will also make other employees unhappy and unsatisfied. Due to his/her wrong negative attitude or lack of skills, he/she will not be able to perform with full efficiency and will unable to achieve target, which leads to low production. On the other hand, competent employees will be giving their hundred percent and putting all their efforts to achieve the target. The latter will be unsatisfied as they are contributing in the success as well as profit of the company with their hard work and drawing same remuneration as the incompetent one. Thus, low-morale will spread amongst the co-workers which lead to employee turn over.
Bad employees who lack skills and training are unable to perform their assigned jobs. They will seek the assistance of their co-workers which leads to spending considerable amount of time. On the contrary, if they complete the task in accordance with their understanding then there will be loss of work process. The completed project will be full of errors and will affect the productivity of the company. Experienced employees or supervisors will have to spend a lot of time in monitoring their work and there will be considerable wastage of time.
As stated by the Occupational Safety and Health Administration, workers who are untrained are prone to accidents and mishaps. The major cause for such accidents is due to lack of knowledge as well as handling of equipment and other supplies. In work environment, which involves heavy machinery and hazardous material, unskilled worker or wrong hiring will lead to some great problem.
A wrong hiring will lead to loss of customers as former will be unable to produce desired quality products. With their unsatisfactory customer service along with inadequate knowledge and skills, there are higher chances of losing your much loyal customer base. This will lead to decline in sales and making your competitors flourish as they will grab your clients by delivering desired quality products and services.
Problems for Manager
The issue of ‘bad employee’ often makes the manager uncomfortable, as he needs to manage people and every employee can’t be good. The manager needs to distinguish amongst various groups such as star players, good employees and bad employees. A company with strength of more than ten employees will have at least one bad employee.
The second most things that manager should understand that if you keep a bad employee then your company will be hurt as well as the particular person also. Most of the people who are not good are well aware about their shortcomings and they know that are not the best person in the job. The person who is well aware about his incompetence is facing more stress along with lots of frustration. This immense work related stress will make the personal life of that person a living hell. A manager who is well aware about this wrong hiring must take immediate action and help the person to move to an appropriate place where he/she can be the star player.