The Cost of a Bad Hire – Check This Before You Hire New Employee

It may be surprising to know that Instagram was only having 13 employees when bought by Facebook in 2013. The employees are the backbone of the company and are responsible to achieve the goals and drive through the vision, especially for the startups.

But, what is the actual cost of a bad hire, and why is it necessary to devote considerable attention while hiring the employees?

Well, according to a study, the average cost of a bad hire can be up to 30% of an employee’s first-year earnings who don’t do a proper employee background check. So, with this article, we are going to tell you the cost of a bad hire to a company. 

How bad hire cost the company? 

Any bad hiring can cost you money in many different ways than you have ever imagined, and some of these are:

• Decreased Productivity – If the candidate described in the CV is not the one in reality, then it may not be able to perform the job for which it is hired. Such a person with low skills, experience, and expertise couldn’t work properly. It damages the morale of the team as they will need to work extra to meet the goals and to achieve the target resulting in decreasing the productivity of the company. It also lowers the standard of the entire team. 
• Cultural Imbalance – Cracks in the company culture happen when the members don’t add value to the team and impact the whole working environment. While hiring, it’s become very necessary to prioritize the right experience, qualifications that meet the requirement of the position, and how they will survive with the culture of the company should be at the top of your list. 
• Reputation – Clients should be treated well because if not they can move on to others. Bad employees who don’t have proper etiquette to talk to clients professionally can damage the relationship if not treated well. Companies have to ensure that those who are representing the business must enhance or maintain the reputation & profitability because it’s not easy to rebuild the relationship once broken. 

Also, it can raise internal issues, and employees can raise questions to top-level management’s ability to make smart decisions that can strain on the relationship between the staff and the management. 

• Financial Impact – Many companies believe that hiring a bad employee doesn’t cost anything to the business, but in reality it does. Employees need to be trained well to handle the duty & tasks. The money & time spent on them will be wasted and just increase the staff turnover. The cost of preparing new employees will continue to rise if 

While determining the cost of poor hire within the organization is important to consider these three rules.

1. The higher the position, the more cost of a bad hire.
2. The longer the incompatible person works for the business, the higher it will cost. 
3. The more training given to a bad employee, the more it will cost. 

• Recruitment Cost – Hiring managers put effort and spend time into conducting & offering the job can result in loss of revenue in some of the ways if hired a wrong employee. 
• Writing job description
• Paying to advertise the job
• Screening resumes 
• Scheduling interviews
• Negotiating annual salary & sending offer letters
• Waiting for the candidate’s acceptance

Warning signs of a wrong hire

If you are getting some of the signs from the new hire, then it may be a sign of a bad hire.

1. The quality of work is not up to the mark and meets the standard of the company. 
2. The skills that the employee has claimed on their resume are missing.
3. The employee is making repeated mistakes again & again.
4. Frequently late to work or absent regularly.
5. He or she doesn’t take ownership of mistakes. 
6. Complain from the employees about the bad behavior and poor attitude. 
7. The new employee doesn’t take ownership of mistakes. 
8. Don’t be able to complete the projects on a timely basis.
9. Complain about the work with colleagues.
10. Show a lack of respect towards management and company. 

How to deal with bad employee

The hiring manager while hiring the new employee, should be very selective from the get-go. With a careful and put a complete set of attention, you can avoid poor hires and maintain the culture of the company. Also, the background verification companies like Repute help bad apples weed out on their own. Companies like these verify the background of the employee very seriously. 

It’s crucial to set clear expectations during the entire process of hiring. Not only this, you as the hiring manager, go with your gut and not by running into the emotions with whom you are feeling bad.

You need to actively take some relevant action when you see the employee is unproductive with bad work ethics. You need to find out the reason why the work is not matching the standard of the company. 

However, if you feel that the employee doesn’t care about the work ethics of the business and is lazy, then you can terminate the employee sooner than later.

Wrapping Up

It’s not easy to find the qualified and right employee, and any business can hire a bad apple. You must realize the cost of hiring the wrong candidate that may eventually lead to business loss. Being very selective during the hiring process can quickly spot bad candidates. However, you can minimize the fraud by doing a proper employee background check during the hiring process. Repute is one of the best background verification companies that help in segregating good and average applicants.