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How A “Bad Hire” Can Cost You A Lot?

Nothing is perfect; neither is the process of hiring. From government organizations to private corporations, people who hold the responsibility of hiring new individuals often recruit employees who don’t give the desired results and contribute to the company’s loss. When it comes to large corporations, these bad hires can cost millions of dollars to the company.
So, the question is
how can organizations minimize bad hiring processes and hire employees that contribute to the organization’s profit only? 
Before diving further into this topic, it is essential to know the factors that contribute to the bad hiring process.

Factors that lead to a bad hire

If truth be told, every direct and indirect factor can lead to a bad hiring process. Over the years, small and large corporations have pointed out various factors that contributed to hiring employees that didn’t contribute to the organization’s profit at all. Let’s understand a few of those factors in detail and analyze how you can keep their consequences at bay during hiring.

1. Quantity over quality 

This is the most deteriorating factor that can cost millions of dollars to large organizations. Small startups usually put in a lot of effort while hiring candidates. Large corporations, on the other hand, hire employees in bulk. This urgency to hire a certain number of freshers in a certain amount of time often leads to hiring employees that either quit early or put the organization at a loss.Some reports mention that more than 80% of Hiring Managers agree that most the bad hiring occurs when there is an urgent need to fill the vacancies. This is a perfect example of how urgency while hiring is detrimental to the organization. 

2. Below-average job briefing

Job descriptions are an inherent part of any job application. Most organizations follow a standard rule while writing a JD but still fail to answer all the questions that might revolve in the applicant’s mind. Therefore, it is not just essential but crucial to give ample attention while writing the job description. 
If you are involved in the hiring process or applying for a job role, look for the following things in the job description-

  • Detailed roles and responsibilities.
  • The gist and overview of the company culture. 
  • The additional things like working hours, etc.
  • The compensation range.

3. Shortage of diversity

While looking for new candidates, it is vital to interview and hire candidates with diverse backgrounds rather than a strict educational background. Diversity makes room for progress and creativity. A shortage of diversity makes the workplace monotonous and boring. It also leads to a clash of thoughts frequently. A diverse pool of employees is more likely to contribute to the organization’s progress and instills healthy competition within the organization. 

4. Same old interview assessment strategy

Several organizations have a rigid interview strategy that has been followed for years without much alteration. Having the same boring process does no good to the company. HR managers need to spend more time developing a smooth hiring process. The recruitment team also needs to spend time preparing relevant questions to be asked during the interview.

5. Below-average onboarding

A smooth onboarding process tells a lot about an organization. Those who don’t give much attention to onboarding lose potential employees. Only a below-average employee would stick around if the onboarding is inconsistent. The hiring managers should stay connected with the individuals throughout the hiring process up until the joining date. 

6. Not involving aptitude tests in the hiring process

Some organizations take employee assessment tests, and some don’t. All alone, these aptitude tests aren’t sufficient to hire someone, but when coupled with other processes, they help in telling if the applicant is a good fit or not. Organizations that don’t take skill assessment tests have to rely solely on the CV and interview, which can be misleading sometimes.

How badly can hiring affect your company?

Bad hiring not only contributes to the financial loss of the company but also disrupts the employee ecosystem over time. There are innumerable effects of a bad hiring process, and you should know them to avoid the same in your organization. Here are some of the devastating and slow-burn effects of bad hiring-

1. Disrupting the employee ecosystem

The bad fish pollutes the pond. The same is true when it comes to bad employees. They not only deliver sub-par results but also affect other employees and their productivity. For example, if a company hires a bad manager, he/she is more likely to affect his/her subordinates, and some might even quit.

In the U.S. alone, more than 80% of employees give up on their jobs because of their co-workers. This is how hiring bad employees might lead to losing good employees. This leads to disruption of the employee ecosystem, and it takes years to re-establish itself. 

2. Steep decline in productivity

Bad hiring also contributes to a decline in employee productivity. Employees with no proper skills take more time to perform the same task. Some of the bad employees also increase the frequency of errors. All of this declines the overall productivity of employees. 

3. Decline in client satisfaction

When employees deliver below-average work with frequent errors, it will make the clients unhappy. With the ever-increasing competition, it is too easy for clients to change their service providers. This, in turn, will only lead to the organization’s loss.

4. Deterioration of the organization’s reputation

In an organization where employees are quitting and the remaining ones are delivering below-average work, it is almost certain for external people to hear bad stuff about it. This is a no-brainer. On one hand, there are unhappy clients, and on the other hand, there are employees who have quit because of the work culture. This is a vicious cycle, and the escape is too narrow to pass through. 

5. High cost of hiring and training

With the increased rate of quitting and the deteriorating productivity within the organization, more pressure is imposed on the hiring managers to find new employees. Now, hiring isn’t cheap. It requires advertising, revised salary packages, employee training, new equipment, and so on. 

Cost companies pay for bad hiring-

Coming this far, you must have thought, at least once, about the actual cost organizations have to compensate for the bad hiring process. Let’s take a deeper look into the financial losses that incur in an organization due to bad hiresAs per the US Department of Labor, a bad hire can cost 30% of the annual income of an average American employee. Speaking of figures, a bad hire can cost around $250,000 to a medium-sized organization. These costs are a result of sub-par hiring, training, replacement, cost of equipment, etc.Practically speaking, it’s not just the money the organization loses, it’s a combination of authority and the progress of the whole organization that’s at stake. Moreover, a considerable amount of time and energy is also lost during this process. Red flags you should dodge to avoid a bad hire.At this point, it is crucial for you to understand what a bad hire is and what’s not. If you are someone involved in the recruitment process, you should identify the subtle signs that indicate if the hiring process is good or not. Here are some of these indicators-

  1. Sub-par performance- these employees have below-average performance over a long period of time. They show no enthusiasm towards new projects and don’t participate much in group activities.
  2. Consistent mistakes– these employees make mistakes and give irrelevant excuses to cover them. They don’t take ownership of their mistakes and often blame others.
  3. Coming to work late or taking frequent leaves- they are likely to take sick leaves more frequently than the other employees. 
  4. Bad attitude towards fellows and clients- they might have a bad attitude towards their co-workers and clients. This includes misbehaving and speaking in a rude tone.
  5. Exceeding deadlines- they are less likely to finish a project within the allotted time. 
  6. Showing no progress- for a long period of time, they show no improvement in their progress.
  7. Have a negative influence on fellow employees- they create a toxic environment for other employees, causing some of them to quit their jobs. They are often involved in verbal fights, even with their managers.

This is not the end, the red flags mentioned above are just a handful of the various other warning signs. It is advised to be vigilant and take note of these red flags at the earliest to stop them from affecting your organization further.

Common hiring mistakes you should avoid at all costs

All around the corporate sector, there are some most common hiring mistakes that organizations repeat more often than expected. If you don’t want your organization to be one of them, this is the right time to know these mistakes in order to omit them in the next recruitment process. 

Lack of structure in the recruitment process

Organizations that don’t have a well-defined recruitment layout often hire employees with less vigor. Top organizations avoid this mistake by listing out all the soft and hard skills they want in the employee along with a proper layout to be followed during the recruitment process. Without a defined structure, hiring is more like a game of chance where hiring managers throw the dice hoping to land the right employee. 

No clarity regarding the job description

A job description with a general description and no clarity creates confusion among the applicants. Moreover, this lack of information might motivate the desired candidates to discontinue their application process. At the same time, revealing too much information is also risky. 

Keeping important topics for later

Not discussing the company culture and keeping other subtle things away from the employee creates doubts. If companies expect honesty from the candidates, they should be honest too. Keeping essential information away from the employee decreases the company’s reputation.

Taking more time for each decision

The whole recruitment process is indeed cumbersome and has multiple steps. Sometimes, due to one thing or another, the process is delayed. With lack of attention, recruitment can take more time than usual, thus leaving the applicants hanging for a prolonged period. In the meantime, if the individuals get a better opportunity somewhere else, they are more likely to leave the company. 

Lack of proper communication

If proper communication doesn’t take place between the HR team and the applicants, they are more likely to drop out. Some companies don’t even bother to send an email to people explaining why they aren’t selected.

Homogeneity in the hiring process

Hiring the same type of employees makes the workplace homogeneous. This leads to a lack of fresh perspective in the company. On the other hand, diversity is the key to progress, if used constructively. 

Tips for hiring the best candidates

Now that you are familiar with all the things that lead to a bad hire, you might as well know a few other tips that leading HR managers use to hire top-tier employees for their organization. Don’t forget to remember all these tips, as they are definitely going to improve your next hiring campaign. 

1. Carefully analyze the role you want to fill

Before looking for an employee, it is best to identify the role in-depth. This is called job analysis, and it helps in identifying the organization’s needs. If this is done perfectly, all the other steps will follow. 

A successful job analysis yields essential information like requisite skills, work environment, roles, responsibilities, expectations, and so on. 

2. Make a checklist

Trust us, making a checklist reduces the work manifolds. We all make checklists in everyday life to make things easier. The same is applicable when it comes to recruitment. It helps you keep track of all the essential and non-essential things. 

If you are on a tight schedule, making a checklist should be your go-to move. 

3. Make a detailed recruitment strategy

The recruitment team can come up with a detailed recruitment strategy to beat all odds. This strategy helps in tracking the progress and the time left. Having a strategy is like wearing a life jacket on the boat, it always helps. 

4. Cross-check the information

Once you select all the relevant candidates, it is important to run a background check on all of them. Furthermore, you should also cross-check the resume and other documents for their authenticity. This is essential to filter out the risky candidates or those who lie in their resumes. 

5. Save time with pre-screening

Pre-screening saves a lot of time. If you don’t have enough time to interview the selected candidates, it is common to pre-screen the candidates. Pre-screening can be done via various tests like-

  • Aptitude exam
  • Telephonic interview
  • Group discussion
  • Assignment related to the job role

6. Prepare a list of questions based on the role

For the panel interview, it is best to prepare the questions beforehand. You can use some standard questions too. Planned questions keep the interview process on track. Make sure the questions extract the right amount of information from the individual for the job role. 

7. Consider critical factors before hiring employees

There are various critical points that you and your team must take into consideration during the recruitment process. These factors include-

  • Taking feedback from the whole team is essential, as it isn’t based on the judgment of one or two individuals. It is best to ask 5-10 people to evaluate the performance of an individual.
  • Checking the references mentioned in the cover letter or CV is crucial. it is always best to cross-check any information to be sure. It includes contacting the past employer or the educational organization for one-on-one feedback.
  • The ability to fit in the workspace culturally is also essential. An individual who feels comfortable working with people from diverse backgrounds is more likely to adopt the diversity within the organization than the one who can’t.
  • Another crucial factor is the commitment to goals. Only those who grow despite the challenges survive in this world of cut-throat competition.
  • Showcasing leadership skills is another important factor. Those who show leadership skills are more likely to lead a project in the future. Moreover, they are proven to hold more responsibilities and become star employees in no time. 

8. Communicate with everyone before sending the offer letter

Before making the final choice, it is important to send an official email or letter to those who aren’t selected. It is crucial for the future. The rejected candidates must know what they need to improve. Once the selected candidates accept the offer letter, the process is successful. Take out a month or two to see if it is really successful or not (Just saying).


A bad hire is no joke. It costs thousands of dollars to an organization every year if not taken seriously. To prevent unnecessary losses and streamline the recruitment process, it is essential to know the factors that lead to hiring below-average employees. This ebook covered all the essential points related to it. Use this as your go-to document whenever you want and save thousands of dollars.

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