Don’t hate us because the title of this article is a cliché. We’re here to tell you that clichés, while overdone and common, are almost always based in fact. In the case of the old phrase “hire slow, fire fast,” this couldn’t be truer.
An important body of research was released by CareerBuilder and reported on by Global HR Research in early 2016. In addition to costing companies some serious cash, bad hires impact everything from company culture to employee morale, to the external impression others have of your business.
Hire Slow, Fire Fast by the Numbers
Making a bad hiring decision can come as the result of a human resource mistake; screening candidates thoroughly is clearly important. But a 2012 study by HR.com revealed some startling statistics:
- 9% of job applicants in the study falsely claimed they had a college degree
- 11% fibbed about why they left a former job
- 53% of all job applications contain false information
So the next time a good hire goes bad, remember that it might not be the HR manager’s fault. Clearly, the candidates themselves are sometimes providing misleading or inaccurate information.
The Cost of a Bad Hire
So what is the true financial cost to businesses that end up making these mistakes? The U.S. Department of Labor estimates that a single bad hire can cost around 30 percent of their annual salary. While this could be quite onerous for a small company, imagine the cost multiplied across companies that “turn and burn” staff – you probably know a few of those notorious businesses that seem to always be hiring. Read more on the cost of a bad hiring here.
Other Costs: Reputation Management
We would argue that while the financial hurdles associated with a bad hire could be considerable, it is the potential effect on your company’s reputation that could wreak the most havoc. If the new employee has close contact with your customers, and the hire is a bad fit, there is always the potential for damage to occur.
Too, a bad hire is often culturally a poor fit for the company, which places undue strain on the internal relationships that can make or break a business. Entrepreneur magazine published an interesting article that cited the drain on employee morale and productivity that a wrong hire can cause.
Need Help? Let Experts Handle It
For the small business, these findings would point to the necessity of having an outside expert take care of the hiring for you. Artisan Talent has been screening creative candidates and placing them in businesses for more than 25 years. We know how to make the perfect match!
Our proven process will help you find the right candidate for the right job, potentially saving you time and money.
Contact us today to see if we can help you find the perfect fit for your business.