Skip to content Skip to footer

It’s no great surprise to hear that a bad hire can be expensive. To begin with, the recruitment agency fee can be up to a third of the starting salary of any incoming employee. However this fails to tell the whole story. A report from the Recruitment & Employment Confederation (REC) found that more than a third of companies believe hiring mistakes cost their business little or even nothing. Very wrong, in the real world a poor hire at mid-management level can cost a business considerably more due to the accumulation of all costs relating to the hiring, training and the disruption that leads to lost productivity.

So, what’s talked about far less is the cost of a bad hire in non-monetary terms, and this is especially relevant in lean teams with flat hierarchies, such as those found in the start-up and growth spaces. Bringing someone into your company who isn’t the right fit, possibly due to their temperament, attitude to the job or skill set, for example, can have a devastating effect on the day-to-day functioning of the business.

The ‘wrong’ people negatively affect the collective morale of the entire team. This naturally this has an impact on their productivity. It’s the most basic rule, happy people are more productive.

Falling staff morale generally means increased staff turnover. The threshold of unhappiness at work will vary from person to person, but everyone has a critical point at which they feel they have no choice but to leave. Successive departures begin to give off the impression that a business is poorly run and potentially a sinking ship, from which other employees may suddenly want to exit. You can rest assured that young people today will not feel a sudden rush of loyalty if their colleagues start to get itchy feet.

There’s also the damage to the functioning of a business which, if it’s a start-up or a small company, relies upon the ability of its team members to work autonomously and responsibly, and to reliably take care of whatever tasks it is their role to perform. Within a start-up there will be someone who can take on the responsibilities of a bad hire, but this is hardly a long or even medium-term solution. The quality of that someone’s own work will naturally diminish if she or he is spread too thin and their morale will in-turn suffer.

Remember also, those responsible for hiring, often the founder/s in a start-up, will have to take themselves away from valuable business-related activities to find a replacement for the bad hire.

It’s worth remembering that a bad hire can simply be the wrong fit, even if the person has the necessary skills for the job. An incoming employee may fail to smoothly merge into the company culture or have an approach to work that is alien to everyone else’s.

Sadly there is no easy solution to this problem. Successful hiring is tough, delegating to recruitment companies ensures the skill set is there to cut through the ‘BS’ and you identify appropriate candidates. Algorythms are great at dealing with volume however they do nothing to understand an individuals’ personality and quirks. An algorithm can’t look a candidate in the eye or change the direction of dialogue mid interview.

Quality over quantity every time will help reduce the risk of a bad hire. Always consider the market with your application process, not all candidates will want to apply directly, you may be putting quality candidates off with over restrictive filtering.

If recruitment was easy there wouldn’t be recruitment companies.