Employers surveyed revealed that the combination of insufficient talent intelligence and the lack of reference checking attributed to 33% of bad hires.
A recent survey of 2,696 employers, conducted by Careerbuilder, outlined some pretty eye-opening statistics regarding bad hiring decisions. The study revealed that 68% of employers were affected by a bad hire within the previous year. There is no doubt that most employers will make the wrong hiring decision at some point. Why do candidates, who seem to be the best and brightest, shine even brighter through the eyes of a hiring manager trying to fill numerous job requisitions in record time? Without the knowledge of having the complete picture of the new hires being brought onboard, the job of hiring several new warm bodies is complete, but at what cost? The true cost of a bad hire varies by position and industry. You may not see the full cost and ramifications of the new recruits you just slam dunked into the next company training class for some time. You may not see the overwhelming negative impact on your organization until it’s just too late, and if you cut the wrong corners, this debacle could even cost you your job!
Avoiding Bad Hiring Practices
Here are a few statistical “worst practices” that should never plague your HR Department as long as you follow regimented screening and selection protocols and perform a comprehensive background check and drug test, where applicable. One thing that’s for sure; “bad hiring practices will continue to result in bad hires” and will continue to cost you and your company time and money. According to the survey, here are things that employers experienced from bad hires:
- 41% - Less productive
- 40% - Lost time to recruit and train another worker
- 37% - Cost to recruit and train another worker
- 36% - Employee morale negatively affected
- 22% - Negative impact on client solutions
Employers responding to the survey admitted the following mishaps and road blocks that led to previous bad hires.
- 38% - Needed to fill the job quickly
- 34% - Not sure; sometimes you make a mistake
- 21% - Insufficient talent intelligence
- 11% - Didn’t check reference
Employers need to understand that many of these missteps can be fixed with a few fundamental and minor changes. Many times senior management fails to notify HR of future talent needs and timelines for proper talent recruiting and on-boarding. HR should always have a seat at the decision-making table to better anticipate the hiring needs and growth strategies to meet corporate hiring goals. Many times, consistent communication is the solution here.
Always analyze key learnings and incorporate them into your hiring practices when you make mistakes. Analyze each hiring failure to further improve the process, and always stick to the same process and protocols each time. Over time, you will certainly see your mistakes dwindle much faster.
Insufficient talent intelligence seems to be a major disconnect between what is the true model employee, in a particular position, and the methodology used to fill a position. In today’s electronic recruiting and assessment age, information can be obtained easily through electronic assessment testing and structured interviews. Each can even be done offsite over the Internet and by using electronic video conferencing, which makes it fast and cost-effective. Even obtaining multiple interviews from a co-worker or department heads can offer a different perspective of the candidate. Many times, a department manager or line supervisor will know more about their particular talent need and their view of a perfect employee.
You can substantiate your interview and assessment results by conducting interviews of past supervisors and manager. Checking references needs to be a matter of company policy and regular process. This task is not for everyone; checking references can be tedious and increase timelines to hire. Questions can be tailored by industry and position for specific probing. Always check with your legal counsel to be sure your questions are compliant with federal and state laws. Outsourcing this process to a professional background screening firm can provide nonbiased third-party fact finding regarding your candidate.
Here are a few areas you may want to probe to backup your internal evaluation process and further eliminate bad hires. Address the following areas:
- Attendance, punctuality or performance issues.
- Relationships with co-workers, customers and supervisors.
- Comparatively rate the candidate’s quality of work with others.
- Issues around overall performance or violations of company policy.
- Situations where a candidate may not perform well.
- Comments on the candidate’s strong points.
- Overall recommendations and comments.
Never Take A Candidate’s Credentials At Face Value
Almost everyone tries to look much better on paper as thousands of applicants are competing for fewer jobs. Today, applicants are much craftier and have learned the power of stretching or even forging their resume or application for further consideration. Taking an applicant’s word on credentials should always be labeled as suspect without further scrutiny and verification. Always verify a candidate’s prior work history, education, or other credentials provided. This verification along with in-depth interviews as described above can help fill in the gaps and provide a complete and factual picture of your candidate.
Legal Issues and Potential For Workplace Violence
Certainly the potential minefield and biggest unknown when making a bad hiring decision are the risks around security, safety, theft and fraud. Actually, 9% of the employers responding to the survey noted legal implications from a previous bad hire. The risks and liabilities around a bad hiring-decision can be far reaching and go way beyond poor performance or loss of a customer. Brand defamation, loss of intellectual property, theft, fraud and claims of workplace violence may not be fully realized until months into employment. The potential risks a bad hire can bring into the workplace can be avoided through a comprehensive background check. Employers should never cut corners or eliminate this step for the sake of time. A complete search of criminal courts, where a candidate has lived, worked or even gone to school is critical. In addition, a search of sex offender and other state, federal and proprietary criminal databases should never be overlooked. Depending on the position being screened considered, a further investigation into civil litigation records, tax liens, credit history and even driver’s license status is a must. A comprehensive drug testing program can also provide insight into potential drug use and support a workplace drug-free initiative. Remember that legal issues resulting from a bad hire could cost you thousands or even millions in legal fees, insurance premiums and settlement claims.
By incorporating a solid program of “good hiring practices”, you can properly assess, screen and credential your future employees and alleviate the overwhelming challenges, risks and liabilities of a bad hire. Employment Background Investigations (EBI) works with employers globally to provide a full range of comprehensive and legally compliant employment background checks, drug testing, occupational healthcare and electronic form I-9 solutions. Our "Just One Solution" suite of services will help reduce the risks and liabilities of a bad hire! EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local and international mandatory requirements. EBI is not providing legal advice or counsel and nothing provided on this document should be deemed as legal guidance or advice. Readers should consult with their own legal counsel to determine their legal responsibilities or if they have questions on any information provided by EBI.