Morale, Productivity Suffer from Bad Hires

A new survey suggests the biggest cost of a bad hire might not be financial.

The majority of chief financial officers (CFOs) surveyed were most concerned about degraded staff morale (39 percent) and a drop in productivity (34 percent), according to a study released by global staffing firm Robert Half. Monetary costs came in third (25 percent).

The survey was based on interviews with more than 2,100 CFOs.

Ninety-five percent of respondents said a poor hiring decision at least somewhat impacts the morale of the team, with more than one-third (35 percent) saying morale is greatly affected.

“A bad hiring decision can often cause a negative ripple effect through the organization,” said Greg Scileppi, president of international staffing operations at Robert Half.

“Hiring a bad fit or someone who lacks the skills needed to perform well has the potential to leave good employees with the burden of damage control, whether it be extra work or redoing work that wasn’t completed correctly the first time,” he said. “The added pressure on top performers could put employers at risk of losing them, too.”

There are a number of reasons why someone may not be a good fit for a job, from a lack of requisite skills to a personality mismatch, said Paul McDonald, senior executive director for Robert Half. “Interviews and reference checks are designed to ensure a successful hire, but these methods are not fail-safe, particularly if employers are not thorough in their efforts,” he said.

Other findings from the survey include:

• Supervisors spend, on average, 17 percent of their time managing poorly performing employees.
• Sixty percent of hiring managers report that bad hires don’t get along with co-workers.
• Forty-one percent of hiring managers estimate the cost of a bad hire in the thousands of dollars.
• It takes five weeks, on average, to fill a staff-level position and 7.5 weeks to fill a management position.

Making Bad Hires

Anyone working in the recruitment function for any length of time has made bad hires. The reason why?

“The process used in finding and selecting people is an inexact science at best,” said Ronald C. Pilenzo, SPHR, president & CEO of The Global HR Consultancy, based in Hobe Sound, Fla. We still do not have a foolproof system of selecting people for jobs, added Pilenzo, also the former president of the Society for Human Resource Management. “We have tried and still use a variety of methods ranging from an interview alone, interviews preceded by tests, reference checks, psychological assessments and more. The bottom line is that in the end, after all screening methods have been considered or applied, an individual judgment must be exercised on one finalist for each job.”

So why are hiring mistakes made? One issue is the lack of trust between HR and hiring managers, Pilenzo said. “The problem is that most hiring managers are not very good at interviewing and not trained in the selection process. Bad hires also occur when the hiring manager goes against the recommendations of the HR department,” he said.

Another issue is ignoring or misreading what has been learnt or observed about candidates. “Few applicants outright lie about their background and experience but most bend the truth by expanding their background, job experience, titles and education,” Pilenzo said. Background checks become very important. But the best way to get at the truth is by being able to ask the right questions, he said. “One way to assess a candidate’s resume is to have job applicants draw an organization chart and define how they fit into the chart, where their boss and the function is positioned, and how the work they do is processed and evaluated. In short, how does the work of a candidate, their department, a service or a product contribute to the organization?”

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy