The Cost Of A Bad Hire

Posted On 14 Sep 2018

The Cost Of A Bad Hire

14 Sep 2018
A bad hire costs you time and money: here’s how to avoid it

A bad hire… it’s a phrase no one likes to hear, but the sad reality is that a lot of businesses make poor choices when it comes time to recruit new staff. We witness this on a daily basis and feel our clients’ pain when they reach out at the eleventh hour asking ‘How did we get here?’, ‘Where did we go wrong?’ and of course, ‘Can you help us find the superstar we needed ASAP?’

What is the cost of a bad hire? A quick Google search will offer up a plethora of figures claiming to be the true cost, but the simple answer and undeniable truth is that no matter what you guess the cost is for your business, the true cost will undoubtedly be higher than you think. Why? Because on top of the obvious direct costs (the cost of job ads, the time your HR team spent recruiting the role, the candidate’s salary and an agency fee), the cost of an empty seat (i.e. potential revenue that could have been generated), strain on customer relations and impact on employee productivity and morale must also be taken into account.

We’re not here to wax lyrical about the different costs you’ve incurred – your pain is real so let’s not rub salt into the wound! But we do hope to offer a little insight into where things may have gone wrong.

So without further ado, here are the top five recruitment mistakes we see and what you can do to avoid them in the future…

Mistake #1

Your recruitment process is too long

Our best advice would be that your process take no longer than five days from presentation of shortlist to offer. If you can do it in less, even better! Recruitment processes longer than this run the very real risk of losing candidates to other offers. Why? Because most candidates are interviewing with at least three different companies at any time, so if you meet your superstar, you must be prepared to move quickly, especially if they are already at final stages with another company.

The best processes minimise the time between stages and seek efficiencies where possible. Start by doing away with benchmarking… your recruiter will benchmark for you so trust that they have identified the best candidates for your company and role. We also recommend no more than two rounds of interviewing, with the second interview scheduled for the day following the first. This secures the candidate before engagement levels decline. Our research shows a sharp decline in confidence and engagement evident from two days post interview. Fickle? We know! Unfortunately, it’s a reality we need to accept!

Quick tips to streamline your recruitment process:

  • Obtain all necessary approvals before you start recruiting
  • Have interview times pre-scheduled, before you receive your shortlist
  • Have candidates meet with multiple stakeholders on the same day, rather than in separate interviews spaced out over several days
  • Pre-prepare contracts and offer letters
  • Make a verbal offer pending references on-the-spot or within hours of the final interview

Mistake #2

You don’t have a clear idea of what you NEED

In an ideal world, your perfect candidate would tick all the boxes. But given the current talent scarcity, a superstar candidate is still a superstar candidate even if they only tick four out of five essential criteria on your list. We’re not suggesting you compromise on the important things, but we do believe that some form of concession is necessary. When you know exactly what you need, forgoing criteria that isn’t so necessary is not such a big deal and it’s a compromise you are completely comfortable with. Let’s unpack that idea…

When drawing up your job brief, think about candidate attributes in terms of non-negotiable attributes and qualities that would be nice-to-have. This approach will force you to be highly selective and to focus more on the specifics of the role and the skills you really need. Often, we find that employers are more than happy to compromise on selecting candidates with a particular work history or skill set, knowing that their superstar’s great attitude and work ethic will reward the business tenfold.

Quick tips to identify your superstar:

  • Avoid vague and ambiguous job briefs – specificity will help you, your recruiter and candidates
  • Know exactly what you need before you start recruiting – changing your mind halfway through is a time waster you can’t afford
  • Proven ability to do the job is more important than often arbitrarily chosen experience requirements or years of experience
  • Invest in training for superstar candidates that need a little assistance getting up to speed

Mistake # 3

Unconscious bias is getting in your way

Bias hiring refers to screening or interviewing with a particular frame of reference. You may unwittingly discriminate against certain candidates in favour of people who share your background, social class, ethnicity, age or gender.

Less commonly discussed is experience bias, another form of bias that occurs when a you have had an experience with someone from a particular role, company or industry and you are about to interview someone with the same attribute. The negative feelings from your first experience transfer to the new candidate, impacting your opinion of them before they have even stepped into the interview room. Conversely, you could have had a positive experience with someone with a particular attribute and when meeting someone new with this attribute you transfer those positive feelings to them, even if they are not suitably qualified for the role.

The key to overcoming hiring bias is to know your triggers and be aware of them when screening, interviewing and selecting. Accepting candidates regardless of any of those characteristics means you have a larger pool of talent to draw from, improving your chances of recruiting the best person for the job.

Quick tips to overcome bias:

  • Be aware of your biases! It’s easier said than done but a quick check is all it takes to reconsider your assumptions
  • Standardise your process – it’s difficult to make meaningful comparisons if the process is constantly changing
  • Hiring teams should collaborate only after they have taken the time to form their own opinion based off the facts
  • Don’t let past setbacks or bumps in the process get you down… the right candidate is just waiting to be found!

Mistake #4

Your interview experience leaves a little to be desired

Far too often, we see companies with a great brand, team and role fail to impress a candidate because the interview experience wasn’t as great as it could have been. Sure, there are times when employers and candidates just don’t click, but we’re talking about the times when you leave the candidate waiting for ages before you see them, the times when you stop mid-interview to take a call or respond to an email, or the times when you aren’t quite present because other things happening in the business are weighing on your mind.

We totally get it… you’re busy and interviewing is just another thing you have to squeeze into an already jam-packed day. Little distractions or failing to commit yourself wholly to the interview is totally understandable… but it’s also unacceptable. Candidates who experience a poor first interview rarely decide to engage further in the interview process. And when you consider that the interview experience and connecting with staff can often be the determining factor for candidates considering equally great opportunities, failing to offer the best interview experience possible is a mistake you really can’t afford to make.

Quick tips to ensure a great interview experience:

  • Turn off your phone and request to not be interrupted unless it’s urgent
  • Take a minute before the interview to prepare and refocus
  • Allow ample time before and after the interview so you’re not late or in a rush to leave
  • Be present! This will help build rapport so the candidate can relax, be themselves and answer your questions with ease
  • Prepare your line of questioning to ensure you ask everything you need and demonstrate that thought has gone into the selection process
  • Smile! It will help you and the person you are interviewing to relax

Mistake #5

Failing to sell the role or company

In a talent scarce market, candidates are savvy, blessed with multiple job options and will quickly look elsewhere if they fail to understand the benefits of a new role or company. As such, it is imperative to ascertain individual motivators throughout the interview and highlight relevant points organically and strategically.

For example, Millennials or Gen Y applicants usually value and seek out different benefits, working conditions and financial rewards compared to Baby Boomers or Gen X. Alternatively, some candidates are less concerned with compensation benefits and might be more interested in gym and health benefits and work-life balance. In short, don’t be afraid to be different things for different people! This approach is going to help you secure your superstar.

Quick tips to win over your superstar:

  • Create a cheat sheet of benefits for reference in the interview
  • Know your company inside-out so you can speak to anything from profit-share schemes to environmental initiatives at request
  • Ask behavioural questions to uncover candidate attitudes and preferences
  • Look to your candidate’s hobbies and interests for any clues as to candidate motivators


In conclusion

The cost of a bad hire is real and when you factor in the impact on your team, customers and brand on top of the more obvious financial costs, it’s a recruitment mistake you can’t afford to make. Add to this the current talent shortage in Australia and subsequent difficulty of backfilling a role makes the cost of a bad hire even harder to bare. Fortunately, ensuring your next hire is the right one is as simple as following our proven strategies. Embracing change is all that’s required.



For further information or assistance with your recruitment, please do not hesitate to get in touch with our team.

Call (02) 9002 0222 or fill out the form below