What are the consequences of a bad hire?

We all know that hiring new employees goes through a process from recruitment to onboarding. However, we sometimes forget that there are many key steps in this process. Finding the ideal candidate is like looking for a needle in a haystack. In a labour shortage environment, it can be tempting to speed up the process by hiring a candidate on the spot, without doing due diligence.

But what if that candidate turns out to be different from what you imagined during the interview?

The entire recruitment and replacement process will have cost you dearly: a bad hire essentially means all your efforts were wasted.

You've spent months writing job descriptions, posting "We're hiring!" ads on multiple job boards, social media and internally, encouraging current staff to refer candidates to you. You've sifted through countless resumes, evaluated skills, and conducted phone interviews, before inviting a few onsite for a face-to-face interview. You've reviewed candidates' work histories, checked references, and maybe even scoured social networks like Facebook, Twitter, and LinkedIn to make sure their behavior aligns with the company's culture and employee value proposition. You made an offer, explained the benefits and hoped the response would meet your expectations...

In other words, you wasted all the time and money spent on advertising, reviewing resumes, selecting a short list of candidates, interviewing them, and even the induction and training programs they had to go through when they started working.

Are you solely responsible for this mess?

Numerous studies have shown that not everyone tells the truth on their resume or job application. According to HR.com, 53% of job applications contain inaccurate information, and 34% of all application forms contain outright lies about experience, education, and ability to perform basic job functions. So if you rely solely on the information a candidate gives you because you're in a hurry to get them on the job, you may be hiring the wrong person.

However, you won't be alone in your situation: more than 74% of employers admit to having made the wrong choice of candidate for a position!

And this has a huge cost for companies, both in money and in various consequences.

There are many risks associated with bad hiring decisions. In the rest of this post, we explore these risks and the consequences.

Loss of productivity

If you have made a bad hire and the employee cannot do the job effectively or as well as the person they are replacing, it is a waste of time. Your organization may have invested the same amount of resources in this new employee, but get significantly less performance in return. Over a period of time, this can have a real impact on the team's overall results and performance.

When faced with a struggling colleague, other employees may begin to take on other tasks that are not normally part of their job description. This not only affects their own productivity on the job, but also their ability to meet goals, maintain standards and even meet commitments to your customers.

Financial Losses

The financial implications of a bad hire can be endless. The costs add up from recruitment to onboarding. If a new hire doesn't make the cut, he or she will have to be replaced, which represents another investment of time and money to recruit, hire and train the replacement.

Additionally, and more obviously, some of the behaviors and actions of these new employees can have a direct financial impact on the company, including theft and fraud.

Reduced workplace safety

Violence in Canadian workplaces is a real and worrisome problem. Statistics Canada found that 17% of self-reported violent incidents, such as sexual assaults, robberies and physical assaults, occurred in the workplace and 38% of victims knew their attackers. Increased bullying among co-workers is also becoming an issue.

Identifying at the hiring stage those individuals whose personalities are more likely to commit such acts is becoming imperative for companies. Certain personality traits measure the risk of counterproductive behaviors at work.

Brand and Reputation Damage

It is common knowledge that word of mouth is one of the most effective ways to build a company's reputation. However, it is a double-edged sword, as a customer's bad experience will have the opposite effect: they will damage your reputation by telling their friends about their experience.

For example, an employee who does not belong in customer service and whose negative attitude is associated with your product or service can generate negative publicity. A company with a tarnished brand may have a harder time attracting and recruiting new candidates. For small businesses, this can be devastating when it comes to finding investors and partners.

Decreased employee morale and turnover

An underperforming employee will most likely create a negative impression on the rest of the team, which will affect staff morale and lower overall productivity. Other employees may be forced to pick up the slack, which can lead to dissatisfaction and departure. Your most talented employees may leave for a more stable environment if the disruption continues.

A bad hire reflects on the entire company, causing stress and dissatisfaction among good employees, which can lead to dissatisfaction and higher turnover.