Comment: Counting the true cost of a bad hire

We've all been there. A senior staff member leaves and you need to fill the gap quickly. Photo / Getty Images

COMMENT: We've all been there. A long-term or senior staff member has left the company at short notice and your team is already stretched thin.

You need someone to fill the gap fast but rushing the hiring process will only create the perfect storm and leave you with the regret of a bad hire.

Research from Harvard Business School found a bad hire can counter the achievements of two of your superstar employees.

However, the real difference is greater when you consider the total cost of the hire.

Global recruitment agency Robert Half also found 44 per cent of Chief Financial Officers thought the wrong hire impacted morale.

To calculate the total cost of a bad candidate you need to consider missed business opportunities, the cost of delays of developing or implementing company strategies, the need to repair relationships with clients, and the effect on work culture such as team productivity.

At an executive or board level, the wrong hire can also result in external reputational damage to the company as it questions the competency of the CEO or Board's ability to make good decisions.

A poor hire usually signals a flaw in the hiring process rather than a fault in the individual. But there are a few easy steps an organisation can make to avoid a bad hire.

Pre-screening: Most of the time, a company ends up with the wrong person because they have not put the groundwork in to screen candidates properly.

Research from the organisational analysis group Brendon Hall, found only five per cent of organisations fully evaluate applicants. This is why companies typically engage a recruitment agency as it can be time-consuming.

Recruitment experts can assist with sorting through people who seem great candidates, from those who will be great hires.

Rather than focusing on the general competencies, behaviours and skills of people, they seek out applicants who have the skill set to perform on the job.

But how can we tighten up the screening process so a wrong candidate doesn't slip through the cracks?

During the interview: Take off the rose-tinted glasses. Many candidates walk in full of charisma and say what you want to hear.

Ask hard questions. Keep in mind some applicants have practised their interview skills.
Throw them into a hypothetical scenario, you want to see how they react to the unexpected.

Ask them to provide examples of situations where they had to display specific skills.

Reference checking: Reference checks can be priceless. It's obvious candidates will pick references to make them shine, but you'll be surprised to hear what referees have to say.

Asking questions about how the candidate interacts with others or their working style is a great insight into how they operate.

Take notes on your candidates' answers during the interview, specifically about any past work scenarios, and bring these up with their referee — red flags may arise if that information clashes.

Power of your network: When my team and I are down to the last couple of candidates, we will have a discussion about the applicants.

I like to ask others who have interacted with the candidates during the interview process for their thoughts. Were they punctual, polite and easy to deal with? Were there any difficulties trying to schedule an interview?

Taking the time to put the right processes in place and asking the tough questions will definitely save you future headaches. Don't let charisma and smooth talking fool you, it could very well be your next bad hire in disguise.

- Leanne Crozier is a director at Decipher Group, a management, executive and governance recruitment and strategic human resources consultancy.