The Hidden Cost of a Bad Hiring Decision

As in any Profession, hurrying through a process with little planning ahead can cost Organizations dearly. Nothing can be truer than this in talent recruitment. The first casualty is the quality of hire.

As in any profession, hurrying through a process with little planning ahead can cost organizations dearly. Nothing can be truer than this in talent recruitment. When an organization hurries through the recruitment process, throwing caution to the winds, mistakes are more likely to happen. The first casualty is the quality of hire.

Here are some undeniable facts and figures:

1. Businesses that don’t have a standard interviewing practice are the most likely to hire a wrong individual – believe, the chances are 500% or even higher
2. Business that lay much emphasis on candidate experience stand 70% or higher chance of deciding on a top quality hire
3. Business that have built a strong employer branding is likely to attract high quality Hires and retain them over a longer period – odds are three times higher as against a non-existent brand image

Businesses are unanimously aware of the costs involved in hiring. Expenses include: Advertisement costs, Recruitment process Outsourcing cost (RPO),Recruitment staff fee, Interviewing cost and technology related expenses.

The cost of recruitment goes up as the importance of a position moves higher. Typically, Executives are the most expensive to hire (hovers around $4,000) and progressively comes down in this order – Mid- level Managers, emerging/promising individuals, undefined contributors and finally entry-level workers who cost the least to recruit at $750.

Though Employers know that hiring has become an expensive affair, at least a third is unable to determine the real cost arising out of a bad decision after on boarding the hire. This is because most metrics for evaluating this are abstract, like: poor performance, cultural impact and morale.

The consequences of a Bad Hiring Decision include:

1. Unrealized productivity objectives – results in project delays and cost overruns.
2. Higher attrition rates – a bad hire is one who is likely to leave the Organization necessitating another round of recruitment and hiring.
3. Insurmountable delays in the entire Business cycle – this because bad hires tend to be poor team players
4. Negative impact on culture – is more likely to spread discontent, demoralize others, cause a brand image to take a beating

Collectively bad hiring decisions can bring down production, make productive employees leave their positions, bring in more bad hires and finally cause employer’s brand image to plummet. The best way to contain bad hiring decisions is in redefining the entire hiring process. Bad hiring decisions are the result of poorly structured hierarchy. To reverse this, Managements should consider revamping the internal working of recruiters or better still leave the task to RPOs. Remember, a good hire is a product of an experienced recruiter and your own decision making process.

Content Source : http://blog.atkku.com/the-hidden-cost-of-a-bad-hiring-decision/