Hiring is one of the most crucial decisions that managers make especially for a growing business. However, there are instances when new hires are not a good fit for the organization. When this happens, the company loses money and man-hours, and productivity suffers as well.
According to a survey, almost three-quarters of firms that had employed the wrong people reported an average of P741,364 ($14,900) in wasted money. But beyond these astonishing figures lies the true cost of a bad hire.
Spotting the telltale signs of a bad hire may be harder with remote workers, as you cannot keep a physical eye on them. Worse, it is harder to rehabilitate their attitude or build up their skills using online video conferencing. This post will discuss the consequences of a bad remote hire and how it impacts the company.
What is a bad hire?
A bad hire happens when a new employee fails to deliver quality work or does not demonstrate the skills they claim to have. Aside from performance issues, new employees are considered as bad hires if they can’t get along with the team or have a negative attitude, don’t show up for work consistently, or are often missing in action.
According to a survey, organizations that had hired the wrong persons experienced less productivity (37%) and had to deal with compromised quality of work (31%). In addition, 53% of the respondents said the hire exhibited a bad attitude.
What are the effects of a bad hire?
Bringing in the wrong person for the job can be problematic in many ways. Here are the consequences of a bad hire:
- Increased recruitment cost
Hiring new employees already requires a substantial amount of money. The average cost per hire ranges between P174,713 ($3,500) and P249,590 ($5,000). These expenses increase as you go up the ladder or as the role gets more specialized.
If a bad hire leaves or must be let go, the money spent on that person goes to waste. And once you begin the process of hiring a replacement, you’ll be incurring new costs. Whether it’s the lost money you spent on recruiting the wrong person or the extra funds you will need to find a substitute, hiring is undoubtedly costly.
- Lost productivity
Lost productivity is the biggest problem with a bad hire. When an employee cannot do their job effectively, the company loses profit. This can also cause you to face slowdowns in reaching your production goals. You may miss deadlines, and you may have to face unsatisfied clients. Should they engage in negative word-of-mouth, you may have to deal with damage to your reputation (more on this later).
Likewise, when a new employee struggles, other team members have to step in and pick up their slack, limiting their productivity. The result is a ripple effect across the team.
- Lower team morale
Remote workers do not have to be physically present in your team’s vicinity to affect the organization’s morale. With the nature of today’s workforce being more focused on cooperation and communication, your in-house workers will surely have a lot of exposure to your remote workers who should be treated as an extension of your team.
With that said, a bad remote hire can hurt the team. As the saying goes, one bad apple can spoil the bunch. If there is one undedicated employee in the organization, that person can end up bringing down the entire work environment while damaging the company’s bottom line. Conversely, when all of the members work together and focus on the same goals, the group will be more productive and able to get things done.
- Potential damage to your reputation
A disgruntled employee fired for not being productive may end up writing a bad review about your company. As a result, potential candidates initially interested in your firm may develop negative feelings about your organization, causing them to rethink about proceeding with the application. This scenario could harm your business reputation, not to mention ruin your employer brand.
- Potential lawsuits
This doesn’t happen often, but if you have to let go of an employee because they are disrupting your business progress, you can potentially face lawsuits. As a result, you may end up paying costly legal fees. Additionally, a bad hire who is untrustworthy enough to possibly engage in criminal activity could drag your company into a lengthy legal battle, costing you a hefty sum of financial resources.
How to deal with a bad hire
Sometimes, no matter how well you think you know a candidate, you still end up hiring the wrong person. Here’s how to professionally deal with a bad remote hire:
- Determine the root cause of the problem
When dealing with a bad hire, you must dig deeper to discover why the employee isn’t effectively performing. Is it a gap in skills? Did the worker misrepresent their expertise or lack thereof? Once you determine the source of the problem, you’ll have clarity on whether the issue can be fixed or if termination is the way to go.
- Find out if retraining is an option
If the new employee lacks soft skills or is not a good team player, letting them go may be a logical move as soft skills are harder to change and take a longer time to improve. However, if the issue has something to do with job-related skills, this can be resolved by training them. It’s important that the recruit recognizes their limitations and is willing to overcome them. At the same time, you also need to cut them some slack if you failed to verify their suitability for the job before hiring them.
- Know when to cut loose
The first few weeks of a new job can be stressful, and that’s understandable. According to a Harvard study, it typically takes eight months for a newly hired employee to reach full productivity. With that said, don’t rush into making a decision when the new person doesn’t live up to your expectations right away. However, if you’ve given them every chance to step up their game and yet they continue to show a lack of commitment, it’s time to have the tough conversation and let them go.
- Set up better candidate screening
Admitting you’ve made a bad hire is a painful realization. However, you can always make the best of the situation. A good place to start is your interviewing and recruiting processes.
What questions are you asking the candidates? Perhaps they’re not specific enough to generate the right information. Are the interviewers sufficiently trained to do the task? Asking the right questions can help you spot potentially problematic attitudes or behaviors.
Automating your recruiting process can also help identify candidates who are better suited for the position. This works whether you’re hiring remote employees or on-site workers. In addition, it makes the screening process faster and more efficient.
A Bad Hire Can Cost Your Company Substantial Losses
Every company makes hiring mistakes. But you can always recover from a bad hire, whether they are working remotely or onsite, and learn from the experience. While your company may have lost money, you could use the lessons to make better hiring decisions moving forward.
If you’re looking for a recruitment agency in the Philippines and need help finding the right people for the job, Manila Recruitment offers top-notch HR and management services. Talk to us so we can identify the proper solution to your staffing needs.