How to avoid hiring the wrong employee

Nowadays, recruitment processes, headhunting services and career portals are incredibly sophisticated and specialized. With a global talent pool readily available and many candidates willing to relocate or work remotely, hiring the best talent has never been easier. Still, things can and do go wrong. And the emotional and financial cost to a company of making a bad hiring decision can be significant.

But what exactly is a “bad hire”? In broad terms, it’s someone who doesn’t have the right skills or whose attitude doesn’t fit with the company’s values. Among these parameters, there are dozens of nuances. Maybe they’re a worthy candidate with stellar technical skills, but their soft skills are underdeveloped. Or maybe they are fully aligned with the company’s mission but lack the autonomy to execute it.

What impact does hiring the wrong employee have on your business?

1. Financial burden and cost

When a manager comes to the alarming conclusion that they have hired the wrong person, the negative impact of this decision can be large and impactful. The actual cost of hiring the wrong person varies depending on national labor laws and the type of position.

According to the US Department of Labor, the average cost of a bad hiring decision is at least 30% of a person’s first-year earnings. Employer brand guru Jorgen Sundberg, author of The Undercover Recruiter, goes even further — estimating that it costs $240,000 to hire, then fire, a bad employee. This scenario happens more often than you think. Leadership HQ concluded that 46% of new hires prove to be a bad fit within the first 18 months, and in 89% of these cases the employee’s attitude is not in line with the company’s culture and not, as is commonly thought, lacking. Technical skills.

2. Impact on reputation

Social media gives everyone access to any business. Job portals and communities like Glassdoor, Kununu, and CareerBuilder, past and present, allow employees to provide feedback about a given company. They can outline interview processes, assess company culture and leadership teams, and even offer tips on how to stand out for an open position.

However, sometimes these reviews can be one-sided. For example, they may not give the full picture as to why their interview or recruitment didn’t work out as expected. This can ultimately reduce the experience to a one-star rating from their perspective only, which can damage a company’s reputation as a fair and honest place to work and the potential to attract top talent in the future.

3. Impact of crushing on employee morale

Losing a key member (or any member) of a team can have a significant impact on the well-being and morale of the rest of the team.

Employees who cover what you need to fill may take on an increased workload during the time it takes to hire someone new and onboard them. Not to mention additional stress if a new employee exhibits poor performance and does not relieve that workload. Add to that the time-consuming process of finding a replacement and you can see why hiring the wrong employee can have a long-term negative impact on workplace balance and productivity.

Meeting room team

How to Avoid the Cost of Hiring the Wrong Employee

Most managers can recognize a bad hire fairly quickly through their own observations or being alerted by a team member. What is more difficult is understanding why It happened. How can an unsuitable candidate squeeze through the talent acquisition pipeline? And what can be done to avoid it? To answer these questions, we caught up with Hugh Slater, TravelPark’s Chief Operations Officer, to help you strategize. the right guy. Here is what he said:

4 tips for hiring the right people from Huw Slater, COO of TravelPerk

At TravelPerk, we have a unique workplace culture. The foundation of our company is a strong community, where each member shares a vision to create outstanding experiences and services for our customers. Together, we work efficiently to achieve that goal.

Our community craftsmanship didn’t happen by accident, but rather through a systematic, human-centered approach to recruiting and onboarding our employees. Our HR managers do an incredible job of playing ‘cupid’ and strategically sourcing the right talent as our business grows. It’s not about ‘chemistry’ – although that helps a lot! We follow some basic rules and processes to prevent the emotional and financial cost of hiring the wrong person. Here’s how you can apply the same approach to finding the right fit and reducing employee turnover:

1. Make sure the job description is accurate and up to date

Writing an accurate and engaging job description is the foundation of finding the right candidate. It sets your bottom line and outlines the key responsibilities and powers a potential new colleague will have.

  • Set the bar high, but keep expectations reasonable
  • Define non-negotiable skills (and test them at the interview stage)
  • Go easy on ‘nice to haves’ as job seekers are often discouraged if they don’t accept them.
  • Be clear about special conditions that may be incompatible, such as travel requirements and remote working
  • Keep your job description bias-free and make sure your language is as inclusive as possible. Certain words are more likely to appeal or intimidate certain demographics, so always be aware and critical of the language you use

2. Check to make sure a potential candidate believes in your vision and fits your culture

When it comes to hiring the right people for your team, making sure they believe in your vision is key. If they don’t believe in your “why,” no matter how qualified they are, they’ll struggle from day one and likely churn within months. Your hiring manager and everyone involved in the hiring process (from conducting interviews to evaluating jobs) need to feel confident that this person is willing to do what it takes to help your company win.

Company culture in the context of hiring means assessing whether the candidate is compatible with both your company’s values ​​and way of working. They need to bring out the best in the environment they work in – and it’s unreasonable to expect that the candidate and your culture will fit together. It’s the same when looking at values. Candidates either fit your criteria, or they don’t. It’s that simple. If you’re struggling to find this in a potential candidate, consider reversing the structure.

Ask yourself – have there been any red flags so far that indicate this person has acted in a way that doesn’t align with your values? Is there anything to indicate that the way they operate is not compatible with how your company operates?

Let me explain with an example from our own company. TravelPerk aims to connect people in real life in an enjoyable and sustainable way. We look for people who both share this vision and are aligned with the way we try to reach it. Here’s what we’re looking for:

  1. Autonomy – We set direction and expect people to use their skills to achieve company goals. This is especially important in the post-pandemic era, as our management structures become more hybrid and location-independent.
  2. communication And cooperation – Even if the task at hand is done alone, we expect the person to inform others of developments. We need people to work with velocity (the right combination of speed and focus) without compromising quality.

As you conduct the interview, assess the candidate’s alignment with your values ​​and work style:

  • Asking questions revolving around key concepts such as ownership, diversity and work-life balance
  • Ensuring that a senior employee communicates with a different team member to maintain consistency in company values, as well as objectivity
  • Taking the conversation toward examples of past experiences that can show how the candidate acted in a specific situation reflects your values

3. Don’t forget to keep a scorecard!

According to The ‘K’ approach to recruitment, which we follow at Travelpark, creating a scorecard is the most accurate way to clearly define the perfect candidate and various skills for the job. The scorecard should include concepts such as:

  • Mission – Measure candidates’ specific understanding of the role and their alignment with company values
  • Eligibility- Test difficult skills with simulated roles and situations
  • result – Be clear to the candidate about what the goals are within the given time frame and ask them how they will achieve those goals

This last point is linked to another important factor – growth potential. Sustained hiring requires factoring in growth potential at the interview stage. You need to make sure that the people you hire have the ability and willingness to learn and grow with you. As your company scales, so should your people. The person you decide to hire needs to show the potential to be self-motivated enough not only to keep up with the pace of your company, but to be an integral part of keeping that engine running.

What’s more, the nature of the role a person is hired for is likely to change as your organization grows. This is a natural part of a scaling company. For example, let’s say your company hired a young accountant named George 5 years ago when you were only present in one market. As you scaled, George’s role changed to manage the entity across 5 different markets. Of course, the essence of what George does is the same – he is an accountant. But his role naturally evolved with the company. Whether you are a large or small business, this is an unavoidable fact. The people you hire have to adapt.

4. Always debrief and review the data you have collected

Between interview questions, background checks, assessment projects, and cultural fit interviews, you can actually gather a lot of information. That’s why you need to create time for everyone involved in the process to come together and discuss feedback and scorecards.

Perhaps a candidate has scored 100% or perhaps 80%. While it’s easy to make a decision based on face value and a perfect or near-perfect score, you need to create context. To help with this, at TravelPerk we like to aggregate the results into a simple graph like the one below.

Assuming a good cultural fit is established during the interview, the first graph illustrates how to make decisions based on a candidate’s skills and growth potential. Candidates who fall below the intercept or show slow growth potential should be discarded.

I position the intercept according to the context of the role. Given the proven high performance of the team the candidate joins, do they really have to nail everything from day one, or is some ramp-up time acceptable? If so, the intercept can be placed at a lower level. If the candidate has to hit the ground running and their first results are critical, it should be placed high.

The second graph holds the key to making a short list or even a final decision. This is based on where their profile hits the bottleneck combined with their growth potential. In this case the axis is the skill level, the further to the left it is, the lower the level. Successful candidates will only receive a yes or a strong yes if they have scaled the intercept and their growth potential shows a steep enough curve.

And finally…

Sometimes it takes a good amount of time to find the best candidate, and it can put a lot of pressure on you and your team. At worst, it can prompt the hiring manager to make a bad hiring decision, which starts a damaging situation and higher hiring costs.

Despite the enticing prospect of relieving workload for your team, don’t lower your expectations. Look for options that will lead to similar results and provide some flexibility until you find the truly perfect candidate.

It is important to never compromise your recruitment process – they will represent your guiding compass in building the right team. Hiring the right people is an integral step in nurturing your company culture and building effective teams that will help you achieve and even exceed your goals.

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