The High Cost of a Bad Hire and How to Get It Right the First Time

high cost of bad hire

No two ways about it, making a bad hire is expensive. Estimates vary, but they are all high. For example, the U.S. Department of Labor estimates the cost at one-third of an employee’s annual salary. Other sources put the price a lot higher – as much as five times a person’s annual salary.

First off, you have the cost of the loss of productivity from a job that has remained vacant. If you choose to go through the hiring process a second time, there is the time and cost to pay employees to create a job description, to advertise the job, to sort through applications, to interview people, and finally, to onboard and orient the new hire.

How to Get It Right

Here are a few tips to make sure you get a winner the first time around.

1. Make an Accurate Job Description

Before posting a job ad, you need to know exactly what skills, knowledge and experience the person needs to have. You may have to do an analysis of the job duties to determine these things. Then you need to make sure that the job advertisement accurately describes these skills and knowledge.

Everyone involved in the hiring process should be on the same page here, so you can sort out the best candidates more quickly and efficiently.

2. Make a recruiting plan

Decide how you will go about recruiting for the position. Are you going to focus on social media, or job boards, or referrals from employees, or all of the above? You should also set up a timeline for the length of time you expect the process to take.

Review applications with an eye toward the job description

Those resumes that show skills and knowledge that most align with the job description should be the ones you focus on.

3. Standardize the interviewing process

Develop a list of questions for candidates before you begin interviewing. They should be designed specifically to elicit information about the requisite skills and knowledge needed for the job. You should ask every candidate the same questions and take detailed notes so that you can compare answers. Create a timeline for the interviewing process and stick to it. The time frame for the process is important. The longer it drags on, the greater the chances of losing top candidates.

4. Check credentials and references

Don’t skip this. It is estimated that 40 percent of job applicants lie on their resumes. Checking references can also give you crucial information about the character and performance of job candidates.

Get Hiring Right The First Time

If your company is looking for qualified, reliable insurance professionals, contact Insurance Relief today. We are one of the best in the business, winning a Best of Staffing award for our accomplishments. At Insurance Relief, we thoroughly evaluate each person so that you get only the best. Give Insurance Relief a call today!