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Many managers fall into the trap of believing that a warm body on the team is better than no body at all. While understaffing can raise huge concerns about safety and productivity at jobsites, it’s clear that having an unfit hire can be just as bad for business—if not worse. Managing less-than-fantastic hires and the subsequent turnover is costly and time-consuming, so it’s important to understand the true cost of a poor hire and what steps can be taken during the hiring process to prevent bad hires from happening.

Hidden Costs of a Bad Hire

The Money

It’s no secret that the hiring process is expensive. Forbes estimates the cost of replacing an employee can be up to 30 percent of that employee’s salary. Companies lose more than just a warm body when they experience turnover. They lose valuable knowledge, experience and expertise that were shaped by the individual employee’s unique tenure at the company. When an employee leaves for whatever reason, they leave a gaping hole that is hard to fill.

The Team

Employers don’t just lose money when an employee isn’t a good fit. There is a larger cost to the team when a poor hire is made. The company culture can suffer if the employee doesn’t fit. Other employees on their team could be less engaged than they normally are due to the disruption, which could lead to further turnover that was not initially accounted for. This domino effect can result in costing even more money and sending company culture even further down the tubes. This is a situation that could very easily spiral out of control, leaving a company understaffed with a potentially toxic culture and all-time-low levels of employee engagement.

The Injuries

If a new hire is under-qualified or inept at the work they were hired to complete, this could also cause contract issues with current projects. Delays are common if new hires are unable to use the equipment they were hired to use. Inexperience can also lead to scheduling problems if the new hire’s inexperience causes missed deadlines. A bad hire may also lead to poor communication among the team which, compounded with inexperience, can cause jobsite accidents, injuries or even death—causing businesses to hemorrhage even more money in settlements and repair fees.

The Reputation

Another hidden cost is the manager’s time spent managing a bad hire. Often, bad hires stick around for a few months longer than they should, costing managers valuable hours spent managing their performance and creating improvement plans. Considerable time could also be spent fielding complaints from other employees and supervisors regarding conflicts that arise or because their performance is affecting the dynamics and culture of the team. This can also damage the reputation of supervising managers, making it even more difficult to get quality hires in the future, especially because they may be vulnerable to losing the referrals from existing employees.

How to Avoid a Bad Hire

While much of this is worst-case scenario, it’s a fact that bad hires do happen and are a cost of doing business. The good news is that many bad hires are completely preventable. There are several ways to prevent the loss of time and money from hiring a less-than-ideal candidate. Through improving branding, checking references, interviewing with multiple key stakeholders and developing a practical interview process, managers can empower themselves to make the best possible hires.

Invest in Branding

Employer branding is more than just a job description. Employer branding is the first thing candidates see when they are deciding whether or not to apply and it carries over into their new hire experience. It’s crucial for the employer branding to be honest and to match the reality of the company at every stage of the employee lifecycle. Job descriptions should be as clear and thorough as possible to ensure that applicants understand the realities of the position to the best of their abilities. This also allows unqualified candidates to self-disposition before they apply, giving hiring managers a talent pool that is more qualified for the available position, making it easier to weed through the pile of resumes and make the best possible choice.

Check the References

Many companies ask applicants to include references in their application information, but a surprising number of employers never actually check the references they are given. This small step could save so much money and time and streamline hiring processes. A five-minute phone call with a previous employer could reveal the best—or the worst—in an applicant and make employers feel much more secure in their decision to hire a particular candidate.

Hire in Teams

Much like references, other second opinions can be helpful in selecting the correct employer for an open position. Include multiple managers or team members in the hiring process because second and third sets of eyes and ears can help detect strengths or weaknesses that one person may not see. For example, in a second round interview, a team member in the room could ask a question that a hiring manager had not thought of, revealing valuable information about a candidate that could be integral to whether or not they are hired. Just like proofreading, having a hiring team rather than a single hiring manager can save a company costly mistakes.

Opt for Practicality

Practical portions of interviews are another popular option to avoid hiring blunders. Practical interviews are important to the hiring experience for a few reasons. For example: if a candidate was asked to complete a small project to demonstrate their understanding of the company’s equipment or computer systems, managers can better understand the employer’s skills and make an educated decision about whether or not to move them forward through the hiring process. On the other side, it helps a candidate gain a deeper understanding of the responsibilities of the job, which can help them make a decision about whether or not they want to move forward.

While it’s not possible to avoid every hiring misstep or weed out every less-than-ideal candidate during the interview process, there are concrete steps that can be taken to help hiring managers select candidates confidently and move toward hiring quality candidates. By refining the hiring process, managers have the ability to avoid costly hiring mistakes and can focus their time on further developing the great hires they do make.

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