Why Hiring Fast Can Lead to the Costly Mistake of a Bad Hire

When you accelerate the hiring process, whether you’re hiring entry-level workers or directors, you risk making a costly mistake.

Most companies drag out the hiring process. In fact, the average time to hire – from interview to offer – takes just over six weeks to be exact.

Why the glacial pace of hiring? Experts attribute it to the growing cost of a bad hire. In fact, a study of hiring managers found that 57 percent believe a bad hire is more costly than an open position. It’s no surprise that company leadership will often leave positions open for months as they wait endlessly for the perfect candidate to appear.

On the other hand, some companies accelerate how they recruit talent. To keep the process moving quickly, hiring managers skip reference checks and schedule back-to-back interviews in the interest of filling a position as soon as possible.

Why take the fast lane on hiring? Usually, it’s because a position needs to be filled urgently. However, this urgency adds to the cost of a bad hire.

So, what are the perils of hiring quickly? Here are some starting points:

Fast hires may quit right away. After putting effort and time into training your new hire, they can walk out the door. That can leave your business short-staffed and scrambling at a busy time. In fact, the Harvard Business Review reveals that 80 percent of employee turnover may be due to bad hiring decisions.

Skipping a reference check can be risky. It’s estimated that 53 percent of applicants put inaccurate information on their resumes and job applications. A reference check can prevent you from hiring someone who’s a fraud. References can also reveal lies and embellished resumes.

A bad hire can hurt morale and productivity. An accelerated hiring process doesn’t leave enough time to accurately determine whether a candidate truly fits your company and has the work ethic and motivation you need. Left unchecked, a bad hire can be a bad addition to a team that will impact your company’s morale and productivity.

The True Price of a Rushed Decision: Quantifying the Cost of a Bad Hire

The financial implications of a subpar recruit extend far beyond the inconvenience of needing to restart the search. When a company rushes its hiring process, it often skips the due diligence required to make a sound, strategic decision.

This total cost of a bad hire includes wasted wages and benefits paid until the employee is dismissed or leaves, severance, and the expenses associated with a renewed recruitment effort such as advertising fees, screening time, and interviewing hours. Moreover, the productivity lost during the initial training and the subsequent period until a replacement is found further compounds the true cost of a bad hire.

Why Speed Over Precision is a Common Hiring Mistake

In scaling businesses, the immediate pressure to ease increasing workload demands often becomes the priority that overshadows the need for a comprehensive selection process. This immediate need often leads to one of the most common hiring mistakes.

When leadership teams are consumed by operations, they usually lack the time to properly define new roles, leading to vague expectations for the new employee. This lack of role clarity increases the cost of a bad hire.

That’s why companies facing a severe talent shortage or a need for immediate but flexible staffing can benefit from partnering with a temp staffing agency.

If you’re in need of an overhaul of your long-term talent strategy, you could look specifically into Recruitment Process Outsourcing, which allows you to outsource some or all of your recruiting needs and streamline your hiring process.

Long-Term Cost of a Bad Hire: Beyond the Initial Misstep

Bringing an unsuitable individual into an established team creates organizational friction that erodes morale. Existing employees who must cover for a hire’s lack of skills leads to burnout and disengagement. This results in increased turnover, which drains resources, forces the costly cycle of recruiting to restart, and dramatically raises the overall cost of a bad hire.

To safeguard the team, ensure the new hire is a good cultural fit; technical skills can be taught, but values alignment is essential for long-term success.

Strategizing for Sustainable Growth

A smarter hiring approach must be anchored in a clear business strategy that defines the company's goals and vision. This strategy determines the organization’s design, specifying if you require operational staff for execution or strategic hires for long-term growth initiatives.

The investment made in a strategic hire can be supported by successful onboarding. A robust onboarding process is essential for providing role clarity and clear expectations, which are vital for a new employee to take ownership and contribute effectively.

This deliberate, structured approach is the most effective way to avoid the significant cost of a bad hire and ensure that a growing team is aligned with the company’s vision.

The Strategic Choice: Turning to Experts to Avoid the Costly Mistake

Hiring quickly is a risky endeavor: It can lead to more turnover, lost time, and wasted training resources. Getting the right people into your company can be challenging and time-consuming, but it’s not an impossible task when you have the right partner.

If you’re looking for help with the search for talent and the hiring process, turn to Nesco Resource. 

We are the staffing partner your organization needs, providing tailored support that ensures you have the right people in place when you need them without sacrificing quality. When you partner with Nesco, a trusted industry leader, we can help ensure that your next hire is the right one.

Frequently Asked Questions

What is the average cost of a bad hire?

The financial drain of a poor hire is substantial. The total cost of a bad hire is estimated at up to 30% of that person's first-year salary – accounting for lost recruitment fees, wasted training, severance, and lost productivity.

What are some of the consequences of a bad hire?

The consequences of a poor hiring can affect both the bottom line and internal dynamics. Key negative impacts include high employee turnover, team disruption, lower morale, and the potential erosion of company culture. Furthermore, vague role definitions resulting from rushed hiring leads to lost productivity and confusion among the team.