How much do bad hires cost your Finance department?

You know all about the costs associated with hiring new blood in the Finance department, but the real cash drain takes place when you hire the wrong person.

In fact, it costs employers an additional $14,900 for every bad hire made last year.

That’s the new estimate from the folks at CareerBuilder.

Even more troubling: The fact that nearly three in four managers (74%) say they’ve hired the wrong man or woman for the job.

Now add the snowball effect: A bad hire’s impact spreads to entire teams – the performance bar gets lowered, bad habits become contagious, etc.

The price is too steep for any company.

Which means that even if your company plans to add a single person to the payroll this year, you want to tighten your hiring processes to ensure those expensive missteps aren’t happening. Here’s help.

Where things go off the rails

Some Monday morning quarterbacking from your peers who’ve already made hiring mistakes can help you avoid a similar fate. Check out the list of reasons the managers surveyed felt the wrong person got the job:

• While the candidate didn’t have all the needed skills, they thought they could learn quickly (35%)
• The candidate lied about his/her qualifications (33%)
• They took a chance on a nice person (32%)
• They felt pressured to fill the role quickly (30%)
• They had a hard time finding qualified candidates (29%)
• They focused on skills rather than attitude (29%)
• They ignored some of the warning signs (25%)
• They lacked adequate tools to find the right person (10%)
• They didn’t do a complete background check (10%), and
• They failed to work close enough with HR (7%).

Looking at this list, you can spot certain patterns that can be corrected so fewer mistakes get made.

Bad hires seem to boil down to issues on three main fronts:

1. They don’t do their due diligence

Resume lies, incomplete background checks, underutilization of HR – all of these shortcuts can saddle you with a bum hire.

Not only background checks but reference checks can help spot any inconsistencies or downright lies that may be lurking. And remember, your company must obtain permission from the candidate with a stand-alone release form for a background check.

2. Assumptions get made

You know the old expression about when you assume …

Assuming that someone can pick up skills on the job or that if they’re skills-proficient that their attitude doesn’t matter can quickly come back to bite you.

Urge all hiring managers to look at both hard and soft skills – as well as your corporate culture – when evaluating candidates.

3. They lack the resources

Whether it’s the time or the tools, hiring managers who feel ill-equipped to make the right call often make the wrong one.

Recall that $14,900 figure ­– an extra few days to conduct an additional interview or the cost of a background check pales in comparison to how much you stand to lose if the wrong person gets the job.

Info: For more on the CareerBuilder survey, go to press.careerbuilder.com/2017-12-07-Nearly-Three-in-Four-Employers-Affected-by-a-Bad-Hire-According-to-a-Recent-CareerBuilder-Survey