74% employers have made bad (costly) hires: study

Sad fired businessman taking away his belongings from the financial district

A new study from US company CareerBuilder has given us a glimpse into the lives of employers in industries very similar to our own here in Australia, and it’s a tad confronting to see how often employers get it wrong.

According to the new survey, conducted by Harris Poll among 2,257 hiring and human resource managers and 3,697 workers, making the wrong hire isn’t just inconvenient, but it could cost your agency a hell of a lot too.

The survey showed companies lost an average of $14,900 (almost AU$20,000) on every bad hire in the last year, and it’s a common mistake — nearly three in four employers (74 per cent) say they’ve hired the wrong person for a position.

“It’s important to note that there’s a ripple affect with bad hires. Disengagement is contagious — poor performers lower the bar for other workers on their teams, and their bad habits spread throughout the organisation,” said Rosemary Haefner, Chief Human Resources officer at CareerBuilder.

“The best thing hiring managers can do is put in the time and effort on the front end to make sure they have the best available pool of applicants for every job opening. And, just as importantly, have good procedures in place for evaluating candidates.”

When asked how a bad hire affected their business in the last year, employers cited less productivity (37 per cent), lost time to recruit and train another worker (32 per cent) and compromised quality of work (31 per cent).

How do you spot a bad hire?

So how do you know if you’ve hired the wrong person? When asked what made them think they had made the wrong decision, employers who have made a bad hire said:

While the candidate didn’t have all the needed skills, thought they could learn quickly: 35 per cent
Candidate lied about his/her qualifications: 33 per cent
Took a chance on a nice person: 32 per cent
Pressured to fill the role quickly: 30 per cent
Had a hard time finding qualified candidates: 29 per cent
Focused on skills and not attitude: 29 per cent
Ignored some of the warning signs: 25 per cent
Lacked adequate tools to find the right person: 10 per cent
Didn’t do a complete background check: 10 per cent
Didn’t work close enough with HR: 7 per cent

Overall, this is how employers categorise someone as a bad hire:

The worker didn’t produce the proper quality of work: 54 per cent
The worker had a negative attitude: 53 per cent
The worker didn’t work well with other workers: 50 per cent
The worker had immediate attendance problems: 46 per cent
The worker’s skills did not match what they claimed to be able to do when hired: 45 per cent

Workers have regrets, too

Employers aren’t the only ones making regretful decisions. Two in three workers (66 per cent) say they have accepted a job and later realised it was a bad fit, and while half of these workers (50 per cent) have quit within six months, more than a third (37 per cent) have stuck it out.

Workers who said they had taken a job only to realise it’s a bad fit said they noticed their mistake based on toxic work culture (46 per cent), boss’ management style (40 per cent), job didn’t match what was described in the job listing and interviews (37 per cent), and a lack of clear expectations around the role (33 per cent).

Don’t let the good ones go

While the cost of hiring the wrong person can be high, the cost of letting a good worker go is even higher.

According to employers, the average cost of losing a good hire was $29,600 this year. And while 75 per cent of workers say they’re loyal to their current employer, much less (54 per cent) say they feel their company is loyal to them.

On top of that, nearly a third (31 per cent) say they are likely to change jobs in the next year.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

Latest comments

Diva Denise says:
December 17, 2017 at 3:32 pm
I know for sure this to be true, because I haven’t been hired as of yet. I just went on an interview where I had everything they were asking of. Background in finance, a go-to person, on-board new employees, experience in Concur, calendar management, and can get along well with others. I explained that I have experience in all that they were looking for and gave extensive examples of my experience aND what I’d done in the past.. They told the Agency that they will continue looking at other candidates. What’s THAT about?
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sting says:
December 11, 2017 at 2:58 pm
….. employers can easily eliminate the bad ones from the good ones by warning the applicants, they cannot use their phones during work times….
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Agent Anon says:
December 11, 2017 at 1:49 pm
Too true! Add to the list “Employer allowed employee to get too comfortable”. This management faux pas cost me a pretty penny when my (ex) employee rebelled to me putting my foot down regarding inappropriate behaviour and resulted in a Fairwork trial.
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