Madison had interviewed a few local candidates for a new client renewals role, but all of them seemed to miss the mark. One of them had strong technical skills, but his brusque communication style didn’t sit well with her. Another hit it off with both Madison and her executive assistant but had little experience with renewals. But her small team was overtaxed and needed someone weeks ago. Am I being too picky? she wondered. I don’t want to make a rash decision, but I have to do something; otherwise, we won’t be able to handle the business we’ve taken on.
Making the wrong hire can seriously affect a company’s long-term plans, derailing success. In this post, we’ll talk about the major repercussions of a bad hire — and how to correct course. By using smart recruitment strategies, you’ll both find the right people and reduce your hiring time substantially.
Read on to learn more about how a bad hire can impact your business — and how to avoid hiring the wrong person.
Impacts of a Bad Hire
What is the average cost of a bad hiring decision? Making the wrong hire can cost 30% of their first-year salary, according to the U.S. Department of Labor. But when considering all of these consequences, the costs can be far steeper:
- Additional recruiting expenses and time
- Training and onboarding costs and time spent
- Salary wasted on someone who’s just not contributing at a high level
- Lowered quality of work
- Lost opportunities for productivity and growth
You and your other staff might invest substantial time and energy in a new hire, without getting much of a return. When considering the true value of your time, the cost of a bad hire can escalate fast. And for managerial roles, the average cost of a bad hiring decision can climb even higher. For some roles, hiring a new person can cost three to four times the position’s salary.
But lowered productivity and lost opportunities for growth are the biggest costs of a bad hire. You can’t put an exact price tag on this, but it can be astronomical. With the right people in place, your team culture can thrive, innovation can flourish, and you can achieve goals that once seemed impossible. If even one team member is holding you back, it can have a detrimental effect on engagement, morale, and creativity. Their peers will grow frustrated and motivation will suffer; they might even start burning out because they have to constantly pick up the slack.
For these reasons, it’s better not to hire anyone than to make the wrong choice. But fortunately, those aren’t your only two options, as we’ll discuss in a moment.
Reasons Why Bad Hires Happen
In the hiring process, companies often prioritize the wrong attributes — especially if they’re not experienced in hiring. When a candidate’s technical skills impress them, they might fail to consider cultural fit and personality.
Second, small businesses often don’t hire until they have a dire need for help. They’re overtaxed and overwhelmed. They don’t have the mental energy to carefully plan and structure the process. Stressed and distracted, they prioritize speed above finding the right fit.
Third, small business leaders might not be used to spotting red flags that imply a candidate might be a poor fit. If a candidate doesn’t seem knowledgeable about their company, or doesn’t show up with questions for them, for instance, those things might not give them pause. Meanwhile, an experienced recruiter would think, “This person is sure acting interested in the job, but they clearly haven’t done their homework, which shows a lack of passion for the role.”
Due to common interviewing mistakes like these, founders are prone to making the wrong choice. But avoiding these pitfalls can substantially increase their ability to scale.
Why a Good Hire Is a Game-Changer
Hiring the right person will elevate your culture and enhance teamwork in your organization. It’s not just about ensuring that tasks get done well — it’s about building an atmosphere where camaraderie and creativity can thrive.
When you hire the right person, it catalyzes a virtuous cycle — a positive feedback loop in which good things compound over time. Team relationships grow stronger, engagement increases, and your team moves closer to its big-picture goals.
In personal lines insurance, our clients who hire a skilled virtual assistant bolster new business production by $100K–$250K annually, on average. Their client response time drops by 50%, with the VA handling countless customer service requests. For commercial lines, we see business rise by $200–$500K annually and quoting response time improve by 40–60%. Meanwhile, stress and burnout decreases sharply for other employees, since they no longer have to carry an overwhelming taskload.
So, how to avoid making a bad hire? Let’s dive into that next.
Avoiding Bad Hires — and Making Good Ones
Take these steps to start finding, and hiring, the right candidates for your business.
- Broaden your search. If you’re just looking at local talent, you’re missing out on a lot of highly skilled people. Choosing a virtual employee can give you access to specialized skills and knowledge.
- Forecast your hiring needs months in advance. Don’t wait until a critical moment to start, which can cut the planning process short. Consider your plans to scale your operations, then look at which roles and skills will be needed to make that happen.
- Remember that past behavior predicts future performance. In interviews, ask specific questions about how they’ve handled challenges in the past.
- Strive to overcome hidden biases. If you’ve been hiring people because they remind you of yourself, it’s time to think outside of the box. Likewise, beware of false predictors of success — someone’s appearance or handshake doesn’t actually indicate how well they’ll perform the job. And be careful of relying too heavily on AI, which can have its own algorithmic biases, as the Society for Human Resource Management says.
- Work on your employer branding. You’ll attract the right candidates when you show them what you have to offer. Make sure your job description expresses your culture and values, along with the opportunities for professional development that the role will offer.
- Hire for cultural fit, not just technical skills. Look for people who can add to your culture, bringing a different approach or perspective, even if they don’t match your current culture exactly.
If you aren’t sure how to avoid hiring the wrong person, don’t despair. As your recruiting partner, ia Blueprint can help you excel in each of these areas. We know how to dodge common hiring pitfalls and select a candidate who will be an invaluable addition to your team.
By partnering with a recruiting firm, Madison broadened her access to qualified talent. Meanwhile, she freed up her own time to lead the business. Within a few weeks, the recruiter had found exactly the right person for the role — someone who fit well with the team and brought the skill set they direly needed. Training the new staff member took minimal time, and soon, their team was skillfully handling a robust volume of business. Better yet, they weren’t working overtime anymore, so they all enjoyed a healthy work-life balance. And their motivation soared, leading them to achieve increasingly more ambitious targets as time went on.
Ready to make the right hire? ia Blueprint can help you find the best person for your team, with minimal time and effort on your part. We do all the legwork to match you with the ideal candidate. That’s why our clients enjoy a 90% retention rate, building long-term relationships with the people we help them hire. You’ll not only gain a staff member with the perfect skill set; you’ll also build a strong foundation that will allow you to scale.