The Costs of Poor Hiring

My original post for the month of October was "How Much Does a Bad Hire Cost?". Thinking back, I should have changed that title to "The Costs of Poor Hiring" because that's really the root of a bad hire. When you have a poor recruitment process, you get bad hires. In my opinion, the cost associated with this doesn't get talked about enough.

Let's take a $200K Sales Director for example. Every minute that role sits idle, you are losing money. The Sales team that this Director will manage is not performing the way you want it to. Strategies are not being developed, deals are being lost, opportunities are not being gained. This only gets compounded when you take months to hire this person, hire the wrong person and then need to re-hire. Could the cost of that bad hire actually be in the $1 Million range? Quite possibly. What if you hired the wrong Marketing leader and then needed to re-hire? What if you hired the wrong Product leader and then needed to re-hire? Look at those job descriptions and ask yourself the cost of those responsibilities not being fulfilled. It might surprised you.

There is so much that goes into "great hiring" that you could write a novel on it. For now, let's focus on all of the elements that lead to a bad hire and ultimately large costs to the organization.

1. Bad postings - again, not job descriptions, these are postings. That 5 star candidate you want to hire, they haven't applied because the posting isn't attractive and even worse, the posting isn't representative of the role. That's a cost. That 5 star candidate you've sourced? They aren't interested now either. That's a cost too.
2. Poor sourcing tactics - you're only using LinkedIn, you aren't sending sequences that include sending emails, and you aren't making phone calls, you don't have a strong network, and you aren't sending videos. You are missing out on the 5 star candidates. That's a cost.
3. Poor interview process - we could go on forever here. If you have an interview process that actually doesn't do a great job assessing the candidate, you aren't going to hire the right candidate, that 5 star candidate and that's a cost. Furthermore, you actually found that 5 star candidate but now they've dropped out because your interview process is so poor. That's a cost.
4. Poor Careers page/culture - this does nothing to help attract the 5 star candidate. Let's say you don't have employees engaged in hiring and posting about culture or a careers page that is really poor and doesn't talk about culture. That's a major turn off for candidates. That 5 star candidate now no longer wants to talk to you. That's a cost.
5. Poor candidate experience - you can do everything right and get the 5 star candidate into the hiring process but if you give them a poor experience, you will lose them. Not prepping candidates properly, not calling them to keep them updated, not having the interview team engaged with the candidate, these all lead to a poor experience. That candidate you want so badly is likely happily employed or fielding multiple offers. If your candidate experience is poor, they won't join you and that's a cost.

There's more but I will stop there, I think I made my point. Think about all of the ways you can lose those 5 star candidates. Now think about the costs. You often can't accomplish this on your own. You need support from tools, systems, your internal team and external firms as well. They all have a cost associated with them but those costs are extremely minimal when you compare them to the cost of poor hiring.