Recent estimates put the cost of replacing a bad hire at up to five times the annual salary. At the executive level, that brings significant risk. By the time you realize a bad hire has been made, often it’s too late. The resulting loss of customers, employees and damage to your brand can make or break a successful business.
So, why not take the time to be strategic about your approach and thoughtful about your hiring decisions?
- Define the Role – Before putting word out that you are hiring, understand what it is you are looking for. Do you really need to replicate the person that was in the role before? Is this a new role to your organization? How will you market it? What technical and soft skills are you looking for? What business strategies will this person execute? Or will they be required to develop the strategy? Taking some additional time up front to consider your requirements will help guide your decisions through the search process.
- Manage Referrals – It’s tempting to assume that those who are referred to us are “right” by virtue of their having been referred by a trusted source. Have you considered why the person was referred? Perhaps they are very good at networking? Are they qualified to do the job? Do they have a demonstrated record of success? Sure, they have a reputation for getting things done. But has it been earned? It’s easy to get caught up in the hype. But it’s better to qualify referred applicants in the same way as you do others. Ask the trusted source for specific information about the referral.
- Conduct Assessments – Candidates that interview well typically have common qualities – they look polished, they’re articulate, and they’re likeable. So, we hire the person we like, and boom! They’re a disaster on the job. This is where an assessment can be useful. While not a perfect decision-making tool, assessments can provide further insight into an individual (stress behaviours, values, etc.). Assessments can provide you with a laundry list of items for further investigation before making a decision.
At the end of the day, making a bad hiring decision is not completely avoidable. However, adopting a more strategic approach can mitigate some of the risk.