The cost of a bad hire

11 May 2016

The cost of a bad hire: Close to three quarters of New Zealand HR Managers have hired an employee who didn’t meet expectations

• 72% of New Zealand HR managers have hired a new employee who failed to meet expectations.

• 49% cite lost productivity as the greatest impact of a bad hire.

• See Robert Half’s checklist to minimise the risk of a wrong recruitment decision.

Auckland, 11 May, 2016 – Almost three quarters (72%) of New Zealand HR Managers have hired an employee who did not meet expectations, according to the latest independent research from recruitment specialist Robert Half.

The results of a bad hire for a company can be damaging with almost half (49%) of those surveyed naming a loss of productivity as the greatest impact, 30% citing lower staff morale and 20% quoting a monetary cost.

Megan Alexander, General Manager at Robert Half New Zealand said: “According to our independent survey, up to 5% of employee turnover in New Zealand is the result of poor hiring decisions. These can have very damaging effects on a business. The implications of a bad hire can go beyond the monetary element, affecting corporate culture and the overall performance of a workplace.”

“Companies are looking to grow and increase profit. Consequently, every hire should demonstrate measurable results towards the company’s development and strategic goals, making the search for the right talent a priority for HR directors.”

“In today’s market, businesses are time-poor and everyone is competing for skilled talent, especially when the wrong hire can cost a business time, money, and damage its corporate brand.”

Hiring the wrong candidate for a role can incur costs for a company including the employee’s salary that did not reflect performance or output, training costs, impacted productivity of the employee, colleagues and management, potential loss of revenue and the ultimate cost to re-recruit for the role.

“The earlier the wrong candidate is identified, the more likely appropriate measures can be taken. It might seem like a good idea to remove the employee from the role, however this should be considered as the last resort in order to keep costs and losses already incurred as low as possible. Often the employee can be offered additional support, more time can be invested in the on-boarding process or there may be an opportunity to assign a new or different role,” said Megan Alexander.

Which one of the following, in your opinion, is the single greatest impact of a bad hiring decision?

Source: independent survey commissioned by Robert Half among 100 New Zealand HR managers

With the war for top talent still present in today’s market, it is vital for companies to adopt an efficient recruitment process.

Megan Alexander added: “In a market where competition for top talent is high, it is important for companies to put in place efficient hiring processes. Even though recruiting mistakes cannot always be avoided, companies can minimise the risk and overall costs of a bad hire by reviewing and evolving their recruiting processes, and making sure hiring methods reflect recent market changes. Companies should also work closely with their HR department and a specialised recruiter to establish a well-developed recruitment strategy.”

Robert Half has developed a checklist to assist companies in minimising the risk of a bad hiring decision:

© Scoop Media