When work piles up, it’s tempting to find somebody—anybody—to bring on board. But many times bringing on the wrong person is worse than going shorthanded. Employers can reduce the risk, however, but it takes patience—a quality an overworked employer may have trouble mustering.
Monster Worldwide, Inc. in May announced results of a survey showing that a whopping 89 percent of small-business owners said they believe that hiring the wrong person puts a company at risk. Fifty-one percent called the wrong hire a major risk. Those surveyed cited a negative impact on the company’s reputation and decreased productivity as the top reasons a bad hire puts a company in jeopardy.
Monster’s survey found that 82 percent of the small-business owners surveyed consider talent their greatest asset, but 89 percent say hiring that talent is time consuming, and 70 percent consider it expensive to find the right candidate.
“We’ve heard loud and clear that small-business owners struggle to find the right person for the job, and as a result have made the wrong hiring decision on more than one occasion,” Meredith Hanrahan, senior vice president of small business solutions at Monster, said of the survey findings.
The survey found that, on average, small-business owners spend $1,872 to hire a new employee and up to four months searching for the right candidate. When hiring, 78 percent of those surveyed said they are looking for a strong skill set for their industry, and 77 percent said they’re looking for past job experience. Fifty-two percent said they were looking for “grit.”
Reducing the risk
So how can employers looking for the right skills, experience, and even grit make all the time and money spent on hiring pay off? How can they reduce the risks of making a bad hire?
“The biggest risk employers face in the hiring process is getting someone who cannot do what they say they can do,” Mike Haberman, a consultant with Omega HR Solutions, Inc. in Marietta, Georgia, says. “Without a proper vetting process, they run the risk of hiring someone who has the potential for harming their business.”
Haberman has suggestions for employers looking to mitigate their risks.
- Background checks can help. Haberman urges spending the money to have a good background check done. But he reminds employers that Equal Employment Opportunity Commission guidance says not to automatically reject someone for a prior felony. Such criminal history should be job-related, recent, and relevant to the work being performed.
- Improve interviewing. “Most employers decide quickly whether they like someone and then spend the interview selling to the candidate they like,” Haberman says. “Use behavioral interviewing methods to truly discover what the person has to offer in relation to the company and the job.”
- Understand needs. A current, accurate job description is necessary as well as a clear understanding of “what it takes in your company to ‘fit.’” That ‘fit’ includes a person’s work habits, personal habits, methods of interacting with others, etc., Haberman says.
- Refrain from “warm body hiring.” “Hire slow but with intent,” Haberman says. “Often it is better to let a position remain unfilled than it is to make a bad hire.”
Getting the process right
Too often employers do a cursory job of screening resumes and applications, Haberman says. Also, many don’t do background checks or drug screens. When employers don’t understand how to effectively screen candidates and conduct solid interviews, they don’t end up with the person they expected.
Employers often say referrals from current valued employees help them find the right people, but referrals alone may not be the best strategy, Haberman says.
“Employee referrals can be an effective way to get new employees, but it also limits the candidate pool,” Haberman says. “Relying solely on employee referrals can actually lead to charges of discrimination. The more diverse your employee population the better if you are using referrals. I think an effective vetting process is the most effective way to prevent problems.”
When a new hire isn’t working out, employers often struggle in deciding what to do. Is it better to let the new hire go and start fresh, or is it worth the effort to try to train the new employee to be what the company needs?
“I am a big advocate of the adage, ‘hire slow, fire fast,’” Haberman says. “If the person turns out to be incompetent, then you did a poor job of hiring in the first place. If the person is shy on a needed skill set and you knew that, then certainly spend some time training them. But if they don’t have it, don’t look like they are going to get it, then get rid of them. Obviously if you make a major mistake, the sooner you get rid of the person, the more time, trouble, and money you will save.”