Every company, regardless of its size, industry or sector, depends on its employees to achieve its objectives, which means maintaining a productive workforce and hiring skilled talent that adds value to the team. With this in mind, making a bad hire can have serious implications, as the time and expense taken to recruit and onboard a new employee can feel like wasted time and effort when it doesn’t work out.
But with talent shortage across all parts of the economy, employers risk poor recruitment decisions and hiring regret by rushing the hiring process and settling for candidates whose skills do not match the role requirements.
Why you should avoid bad hires
Ineffective hiring practices impact an organisation’s bottom line. Recruiting and training employees costs money. The time needed to replace an employee reduces overall productivity. Even if a less-than-satisfactory employee stays with your organisation, coaching, correcting, and retraining drain resources and morale.
Bad-fit hires have an impact in four specific areas: Productivity, Retention, Performance, and Culture. Bad hires produce lower calibre work than high performers and delay company goals. They’re also more likely to leave or cause other employees to leave. An underperformer can add weight and dysfunction to a team by not delivering his or her share of productivity or in misaligned communication skills.
Why bad hires happen
Hiring decisions are often made in less than ideal circumstances, such as when the position must be filled right away to keep up with productivity demands or when a recruiting team is after incentives as the main priority, or when a company’s available role descriptions are ambiguous for applicants and managers interpreting them.
Bad hires can also happen when employers are unable to take the time required to plan a process, assess candidates and do their due diligence, which leads to rushed decisions and making the wrong compromises.
To get to the heart of why you’re making bad hiring decisions and change the pattern, you’ll need to put your hiring process under the microscope and spend effort refining it. In doing so, you could transform a huge liability into one of your biggest competitive strengths.
Clearly define the role
One of the most straight forward areas to consider is the job description and person specification. Being clear about what the role and organisation needs before you start engaging with candidates can help to retain focus when you are evaluating applicants.
How are you sourcing candidates?
Examine your hiring process. Take a close look at what’s happening from when you first begin sourcing new job candidates all the way to onboarding your newly selected employees.
Are you finding candidates from outside the organisation as opposed to promoting someone internally? More studies are showing greater retention rates and productivity when new positions are filled from within. Some companies spend a lot of effort trying to acquire talent by hiring outside candidates with stellar resumes to fill open positions thinking they’ll save on the costs to develop existing employees. But the costs can become tenfold by way of lower retention rates and low morale. Opening up vacant positions to your existing employees could be a link to a longer employee lifespan across all positions and hire ROI.
Standardise the interview process
Conversational improvised interviews might seem like a good idea since this type of engagement puts both the interviewer and the candidate at ease, but research shows that structured interviews are more accurate than unstructured ones. Get a clearer sense of how the applicant would perform in the role compared with other applicants by creating an equal evaluation playing field for each candidate. Save the organic conversation for another part of the evaluation process.
Use a script or set questions whereby applicants are asked the same interview questions, which all center around specific core competencies. This helps keep the interview on track and provides consistency for candidates to be compared fairly. Select questions that assess conflict management to get an idea of how your candidates would handle frustrated customers and challenging team environments. How a person performs under pressure is a key differentiator when all other skills appear to be equal.
Get a second opinion
Have a few people in your company interview candidates that make it beyond the first round, even if it’s another employee in the same department. Your employees are going to be working with your new hire every day. You want to make sure the candidate you select fits within your team dynamics.
Train your recruiters
Train your interviewers. For many people, interviewing well does not come naturally. Most interviewers have a tendency to respond well to energetic and engaging candidates, or candidates that have similar communication styles to their own. Train your interviewers (and yourself, if you’re the one interviewing) to become self-aware of how their communication style can be interpreted and to be considerate of issues such as unconscious bias. Teach interviewers to communicate in a way that encourages each candidate to feel comfortable to respond with authenticity.. Then you can be more confident that applicants are providing accurate feedback for you to asses no matter who conducts the interview.
You have a duty to the rest of the team
It’s also worth bearing in mind that if you’ve noticed something is wrong, then it’s likely that the rest of the team have as well. You have a duty to be an attentive and proactive leader – the impact of a bad hire has the potential to be really damaging to team morale. There is nothing more frustrating for the rest of the team than to see averageness or under-performance allowed to go unchallenged.
Just remember that while the way you behave in this situation will shape your team’s understanding of you as a person, no one is expecting you to be Superman. Once it’s done, explain your reasoning (if appropriate), be open to questions, share any learnings and then move on.
What to do if you realise you’ve hired the wrong person?
Sometimes it happens that a candidate who had the right credentials, seemed to fly through the interview process, and had lovely references turns out to be an unexpected problem after hiring. If you’ve been in this situation, you’ve had to face the dilemma of whether it’s worse to be stuck with an employee who can’t handle the work and is damaging to the team, or to go public with the admission that you’ve made a significant mistake. Usually in these situations it’s less costly to make a change, and the sooner you make it, the better. Although coping with the impact of a bad hire will never be easy, following these steps will help you recover and move on with the least possible damage to all parties.
Probation periods are important. They serve as an extended interview; an opportunity to see how a new employee fits within your company culture so you can catch any mismatch before it’s too late.
The two most pressing questions I have of everyBut those two questions are almost impossible to answer off the back a couple of hours of interviews. A probation period gives you time to find out if the new hire delivers what is needed or if they fit the company culture. When thinking about probation periods, consider:
- How long is too long? Typically 3 months works well.
- Once you’ve got your time frame set, book in regular catch-ups during that period with the team member to review their performance as part of the employee onboarding process. Not passing your probation period should never be a surprise.
To act on your concerns, you will need to start to have conversations with the new hire. Rather than hoping for the best, or trying to deter a confrontation, leveling with the new hire about your dissatisfaction and their performance issues can open the way to joint problem solving. By sharing your concerns and asking for their input, you may be able to discover workable alternatives, or at least understand how bad the situation truly is. Keep in mind that the new employee may recognise the same problems that you do and be grateful for the opportunity to clear the air and work on a solution together.
Try to repair the situation with focused feedback or reassignment if appropriate. But watch out for the escalation of commitment — many of us resist “giving up” on a tough situation. But if you’re giving the person lots of feedback, and you don’t see both significant personal effort almost immediately and actual improvements over the next three to six months, at some point you need to prepare to cut your losses.
You may also look to extend the probation period to allow the employee to act on the feedback.
If you are not satisfied with progress, identify both the current and the future expense of keeping the bad hire. In some situations, the negative impact on other team members or the business makes it impractical to look for other internal opportunities or to invest in ongoing development.
In situations like these, the costs usually include reduced productivity or increased opportunity costs, employee disengagement and possible turnover, and increased interdepartmental conflict. Some clear indicators are missed deadlines or a decline in work quality. A less obvious sign is extra pre- and post-meeting meetings — often an attempt by colleagues to compensate for or work around an underperformer’s struggles. Compare those impacts with the cost of replacement and onboarding for a new candidate.
Often you won’t recognise how much negative impact the bad hire has until you remove them.
If the relationship can’t be salvaged, look for every opportunity to make the transition and departure as smooth and graceful as possible. Start by considering whether you can negotiate a mutually beneficial plan. An honest conversation can give the unsuccessful hire more sense of personal control and also give you the leeway to work publicly to support the team’s activities and find a replacement.
Offering severance and outplacement services will demonstrate to both the unsuccessful employee and their colleagues that you’re acting in good faith. While it’s true that most companies only provide severance payments or outplacement services in situations where an employee has provided long and faithful service, when organisations take responsibility for the mistake of a bad hire, it helps everyone move on more quickly. The exception to this would be if the employee misrepresented their skills or has ethical or behavioral problems.
It’s painful for all parties when you make the wrong hire, so learn what you can about what went wrong to avoid repeating the situation, particularly because it will be crucial that the replacement works out well. If you move deliberately but quickly to handle the problem, the new hire is more likely to still have some job opportunities in the pipeline, or to be able to return to their last position, and will be grateful for the chance to salvage their career — and it’s more likely that you’ll still have a batch of candidates to consider.
Turning hiring mistakes into a better recruitment process
The emotional and financial cost of a bad hire can be pretty significant, so it’s natural to want to move on as quickly as possible. Don’t do that. There’s one more thing you have to do…. the post-game analysis.
Everyone agrees that you should “learn from your mistakes”, but that’s something of an empty platitude. You don’t learn from vague generalities – you learn from uncovering exactly what went wrong.
First of all, break down the recruitment process into its individual components:
- The job description posted on job boards
- The interview process
- Any skill assessment/tech test
- The onboarding process
- The firing process
Bring together your leadership team and discuss any issues or concerns you have with each of these stages. Build out any learning curves you can draw from it, and take action to ensure that those hiring mistakes don’t happen again. The biggest single benefit you can take from this negative experience is improving your hiring process, so that next time you get the right candidate.
DavidsonMorris’ HR specialists support employers with guidance on effective recruitment practices, managing the probation period and performance management. Contact us for best practice guidance.
Last updated: 18 July 2022