Executive Hiring: what’s the price of a bad hire? Let's do the math!

No matter what the industry: hiring a manager or executive always involves high expectations for the company. But also significant financial and time investments.

In many cases, the search for the ideal candidate for a specific vacancy stretches over a long time; this search also involves several members of the corporate team and an untold investment of time.?

And this is the good news. The bad one is that, despite all efforts, the hiring process may? end up in disappointment. The newly hired may:?

• turn out to be less suitable for the job than he or she seemed during the recruitment?
• bring up personal issues that could make it harder to fit him or her into the team
• upset the existing balance, leading to conflict or problematic situations.

For this reason, the costs of making a bad choice can be considerable.?

How to estimate them?

Determining the costs of a bad hire

Here's a short list that can help figure out the costs of an unsuccessful hire.

Expenses of the Recruitment Process

Selecting a manager involves expenses, especially when outsourcing to a company specialized in recruiting. If the candidate turns out to be unsuitable, the company may have to reopen the position and repeat the process.?

Delay in Hiring

Long vacancies may cause delays in kicking off activities and projects, negatively affecting all company dynamics and resulting in long-term economic damages.

Time Invested in Selection

The time invested by the selection team in reading CVs, attending interviews, and sharing their impressions comes at a cost in terms of time spent on alternative tasks.

Induction Time

The induction of a new candidate requires an orientation phase, involving staff diverted from other activities. If the new hire proves inadequate, the training would then need to be repeated.

Paperwork Costs?

The costs associated with the administrative tasks involved in hiring can be quite significant.

Last but not least, poor hiring can result in lost revenues if the manager fails to ensure successful performance.?

These accurately measurable costs are only part of the damage. The mistakes of an unfitting manager may harm the company, leading to a loss of customers and legal risks. Furthermore, it may require the intervention of other management figures, increasing stress and negatively affecting the internal organization.?

Have you already had to deal with a bad hire? How much has it affected your organization?