Successful businesses value their time, money, and effort. A bad hiring decision will greatly diminish all three of those assets, and not just in the way you might expect.
Sixty-six percent of employers in the U.S. reported making a bad hire, according to a 2013 study. Twenty seven percent of U.S. employers said that a single bad hire cost their business more than $50,000. Additionally, 36 percent of employers in the U.S. reported lost productivity due to a bad hire while 32 percent reported a negative impact on employee morale.
The obvious financial costs of a bad hire are the costs associated with hiring someone new, such as the cost of advertising the position, screening potential employees, and retraining employees. If you factor in in poorer overall performance and potential legal issues, one bad hire can really set back a company’s goals.
When you make a bad hiring decision, you also lose a lot of time. As we all know, time is money— so a bad hire results in a plethora of financial costs, both tangible and intangible.
A 2011 New York Times article confirmed the hidden costs of a bad hiring decision.
“The problem is that you are not going to get a bill for your hiring mistakes that would help you reflect on the true costs,” said Times reporter Jay Goltz. “Instead, the costs will be hidden in an unemployment rate that goes up for the next three years, in wasted time that could have gone into more productive things, and in customers who get bad product or service during this period. You have hit the trifecta of wasted money.”
To avoid this “unwanted trifecta,” employers should act diligently when it comes to their hiring processes, including interviewing, decision-making, and of course, background screening.
A thorough background screen can help your company avoid the detrimental costs of a bad hire (background checks can also help you avoid negligent hiring lawsuits). Background screening can confirm that a person is who he or she says, determine if he or she has any damaging history, and verify information provided by the applicant.
Background checks are an indispensable part of any good hiring process. Superior employees, better performance, and increased productivity for your company are within your reach when you partner with the experienced and accredited team at XG Consultants Group.