Are You at Risk of Making a Bad Hiring Decision?

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According to the US Department of Labor, making a bad hire can cost you — 30 percent of the employee’s salary, to be specific, although that number can easily climb depending on position, seniority, and industry.

This is an astonishing price that can have a massive impact on businesses of all sizes, yet many companies are still at risk of making bad hiring decisions. In part, that’s because organizations are under tremendous pressure to fill their roles, with 45 percent of employers reporting difficulty finding the right talent. On top of this, a lot of companies create additional obstacles for themselves by failing to keep bias in check or neglecting to assess candidates based on cultural fit.

The price of a bad hire in the labor market is high, and the risk of making the wrong hiring decision is great. However, there are steps you can take to boost your chances of making the right choice in the recruiting process.

What Happens If You Make a Bad Hiring Decision?

Before we can talk about guarding against bad hiring decisions, it’s important to understand exactly what happens if you bring the wrong candidate on board.

If your new hire is struggling to settle in and get up to speed, that means you’ll need to put extra support in place to help them get on track. Does the employee’s onboarding plan need some revising? Do they need to meet with more colleagues and build more relationships? Do they need extra training or even new trainings you don’t typically offer?

All of this comes at great financial cost, and that investment is not guaranteed to pay off in the end. Often, even after supplying extra support, an organization finds that its new hire simply can’t meet expectations. As the new hire is struggling to keep up, their teammates’ morale levels will likely dip as well. In the end, you’ll have to let the bad hire go and start the recruiting process all over again, leading to even more spending.

How to Avoid Hiring the Wrong Person

So, while there is potential to salvage someone who isn’t settling into their new role, even that route can be quite costly. Your best bet is to avoid hiring the wrong person to begin with — which you can do by following these tips:

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1. Make Sure You Use the Right Tools

Avoiding bad hires starts with your candidate attraction methods, so take a look at your sourcing tools. Where are you looking for candidates and how are you engaging them?

Resume databases are one popular choice, but it’s important to use a quality database. Some databases only focus on volume, but quality trumps quantity when you want to avoid bad hires. Better still, consider investing in a tool that can help you match resumes to job descriptions, as this will make it easier to shortlist only candidates who have the right skills for the job.

That being said, assessing candidates for cultural fit is also important if you want to avoid bad hiring decisions. Again, an effective screening technology can be useful here. This time, instead of matching resumes to job descriptions, you’ll need something that can match a candidate’s personality and values to your ideal candidate profile.

2. Don’t Settle Because of a Small Talent Pool

One big mistake many employers make is settling for a hire who doesn’t quite meet the criteria simply because there is no one else to choose from. Believe it or not, it often makes more financial sense to keep the position open longer and wait for someone who is a better fit. As you’re waiting, you can mitigate lost productivity and revenue from the open position by either optimizing existing resources within your organization or hiring a temp or freelancer to fill the void.

If you have your reservations about a candidate, it’s always best to go with your gut. Sure, it’s great to give people a chance, but if you can’t see a person fitting in with the team, then hiring them could very well be a mistake.

3. Don’t Rush the Interview Process

The interview process is a crucial time during which you can really get to know your candidate. With that in mind, suppress the urge to move the process along simply for the sake of getting things done. Instead, take time to really dive into who each candidate is and how they might fit at the company.

A multistage interview process gives you the opportunity to speak with a candidate a number of times, witch each conversation adding more detail to your understanding of the candidate. You can also bring in other team members so that multiple people can learn about the candidate and compare notes. The more input you have — and the more time you spend with the candidate — the more comprehensive your understanding will be.

4. Focus on Personality as Well as Skills

According to research conducted by Resume-Library and TopInterview, 70 percent of employers consider a candidate’s personality to be among the top three factors in deciding whether to extend a job offer, making it even more important than education. This is because personality is key in determining how well an employee will thrive in your specific culture.

It can be easy to focus purely on skills, but skills only tell you whether the candidate can do the job on a technical level. Personality tells you whether the candidate can perform at their best in your environment. Ultimately, someone who fits in with your culture but needs to develop their skills just a bit more is a better hire than someone who simply doesn’t mesh with your team but has all the right skills.

5. Check Your Unconscious Biases

While it’s only natural to make judgments based on first impressions, these judgments might result in bad hiring decisions. That’s because we all have unconscious biases that subtly influence our perceptions of others. Because of these biases, employers often miss out on candidates who would have been great fits.

It can be very difficult to account for your own unconscious biases, so combat them by getting more people involved in the hiring process. That way, multiple people can offer multiple perspectives on the same candidate. You can also consider implementing blind hiring or investing in technology to screen applicants for you.

Today’s tight labor market is one of the most difficult hiring environments in ages. However, that doesn’t mean companies have to settle for candidates who don’t tick all the necessary boxes. To mitigate your risk of making bad hiring decisions, incorporate the tips outlined above into your recruiting process today.

Lee Biggins is founder and CEO of Resume-Library.

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Lee Biggins is founder and CEO of Resume-Library, one of the fastest-growing job boards in the states. Lee is a pioneer in online recruitment and has worked in the industry for more than 20 years.