The Cost of a Bad Hire: How to Actually Do Something About it

Aug 10, 2010
This article is part of a series called Opinion.

John Sullivan wrote about the cost of a bad hire. Reading through the list, I thought it was extremely comprehensive … someone must have done their homework.

Sure, we should plan ahead, forecast hiring trends, and develop candidate pools. This is just good business sense. But, assuming hiring managers and staffing folks are doing the best they can, that is not enough. If we do not abandon old ways of thinking and adopt new tools, articles like this will continue into the future. Let me begin by restating a few obvious facts:

  • Interviews range from highly structured to ROTFL. Although they get better with structure, interviews are still tests.
  • Job requirements are almost always taken from an old position description. Questions are delivered orally and answers are delivered orally. Scores are almost always based on personal opinion.
  • In the end, interviewers usually compare candidates with each other instead of to the job.
  • No one intentionally hires someone who cannot do what was expected.
  • People promoted based on performance as individual contributors seldom become good managers.
  • A poor hiring program leads to a shallow promotion pool.

If sports franchises used organizational hiring practices to hire players, they would hire golfers, send them to soccer workshops, manage them as if they were fly fishermen, and reward them based on their ability to play badminton.

We can cite more facts, but the obvious question is not whether or not we should do a better job hiring and measuring candidates, but how can we start doing it?

Think Outside the Box

There is an old training problem where people are asked to connect 16 dots arranged 4X4. They are told to use only four straight lines and to keep the pencil on the paper at all times. The task is impossible without going outside the box; so is fixing the low-performer problem. Going outside the box with employment means: 1) doing a better job defining how a job is to be done; 2) using tests that measure “hows”; and, 3) following up on specifics. And, guess what? The good part is that’s what the Feds want you to do anyway!

Clear the Competency Cobwebs

Start by tossing-out junk competency definitions. Unless the old job is exactly like the new one, the only competencies that reliably can be used to bridge skills from one job to the next are technical knowledge, cognitive abilities, planning skills, behaviors, and motivations. I’ll leave physical skills for another article. In short, you need to know if the employee is smart enough to solve problems in the new job, knows the right things, can effectively plan and organize work, has the right interpersonal skills, and wants to do what’s required. It’s really so basic that some people have trouble understanding it.

You see, asking about results is the part that gets our attention. Asking “what have you done” is much easier than asking “how did you do it?” And, asking “how did you do it?” is easier than knowing if the candidate is telling you the truth. And so it goes. Even while our human nature keeps telling us how important it is to get to know the candidate, our job responsibility is to get to know whether the person has the skills to do the job. I know I don’t have to cite examples. We all have an abundance of them.

Start by understanding how a job should be accomplished. That is the secret of what you are looking for. And, while you are at it, ask a few people who actually do the job. You would be surprised at what you can learn.

Master Your Tools

Interviews are quick, flexible, cheap … and inaccurate. If they are the only tools you use, abandon any idea that you can improve hiring quality. It will save a lot of frustration. Of course, adding structure to your questions without adding job analyses data or standardized scoring may make you sound more professional, but not knowing what to probe for or how to evaluate it will still fall short of your goals. Get to know as much as you can about hard-to-fake tests such as simulations and ability-type tests. If you don’t know how to use them, learn.

Avoid the Junk

I really feel sorry for someone who seriously attempts to navigate today’s test market. It is filled with so much junk and misleading information that it is almost impossible to make a well-informed decision. In general, avoid any test that claims it is approved by the EEOC, does not have adverse impact, states it can “help” you make the right hiring decision, has special occupational norms, and so forth. These are red flags. Even if you don’t get sued for hiring discrimination, you won’t be so lucky defending a wrongful termination charge or an internal discrimination challenge. Of course, there are all those bad-employee expenses that John Sullivan cited in his article.

Playing the Odds

Every hire is a gamble, and no system is perfect. Your only choice includes whether to continue using non-predictive interview techniques or learn better processes that screen out a greater percentage of unskilled employees. This is called validation. Nothing in the organization’s arsenal delivers the same ROI as a good hiring system. Just imagine instead of having a typical organization staffed with 20% top producers, 20% bottom, and the rest in the middle, what it would be like having 70-80% top producers.

Of course, you could always continue complaining about the high cost of low performance.

This article is part of a series called Opinion.
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