Hired the wrong person? Here are the costs and how to avoid them

The costs of hiring the wrong person can linger beyond their time of employment.

Is your new hire underperforming? Are your current employees feeling disgruntled or uneasy? Perhaps you’re beginning to see signs that you’ve hired the wrong person.

If you have hired the wrong person, you’re not alone. Hiring the wrong person is common, although, definitely unfavourable. The costs of hiring the wrong person can set your business back at least 30% of the new hire’s annual salary. On top of that, indirect costs can linger way beyond the new hire’s time of employment.

Here are the costs of hiring the wrong person and what to do next.

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The costs of hiring the wrong person

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Rehiring costs

Besides the costs initially involved in hiring this person, you’ll end up forking out more time and resources to hire someone else to fill this unsuitable candidate’s position. This includes:

• Job ad costs
• Time used to assess CVs
• Time used to interview applicants
• Onboarding costs

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Impacts on client/customer and stakeholder relations

Your customers and key stakeholders have expectations about the products and services they receive from your business. Therefore, your employees must uphold certain standards in the work they produce. If your new hire is underperforming or lacks engagement, your customers will receive less than desirable products or services from your business. Negative experiences are more easily recalled by customers and more likely to be spread by word-of-mouth than their positive experiences. In other words, your brand equity is at stake.

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Burnout of existing employees

To make up for the new hire’s underperformance, existing employees may work harder to compensate in order to meet team KPIs. Over a long period of time, this will burnout your employees and establish resentment towards the new hire. Both of which lead to higher absenteeism, higher turnover, and lower productivity.

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Lost productivity

An underperforming employee poses to lower the bar for current employees. Your current employees may see the new employee get away with subpar performance and believe that it is also acceptable for them to deliver work of the same standard.

Also, for every new hire, different people in the business need to set aside time to onboard and run inductions to help the new hire settle in. In addition to that, someone needs to train the new employee. This means your current employees will have less time to complete tasks they were initially assigned to do.

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Lost training investment

While training can improve employer and employee relations, if the new hire is unfitted for the position, training is a waste of time for everyone. If you hire another person, your current employees will need to spend more time running the same training again.

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Lost manager’s time

When fitting a new employee into the team, managers spend a great deal of time coordinating, planning, and communicating to ensure things run smoothly. They also spend time training and getting to know the new hire to understand what managerial style works best. This is time wasted if the new hire isn’t right for the job.

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Damage to workplace culture

Resentment towards the new employee can damage workplace culture. Employees may begin to speak poorly of the new hire and create a cycle of negativity.

Low engagement from the new employee may influence current employees to also be less engaged. This will lower your business’s overall productivity.

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What to do if you’ve hired the wrong employee

Schedule time to talk to the new hire about your concerns

Give the new hire a chance to understand your concerns before jumping to the common resolution of letting them go. Be direct about your concerns and try to find solutions together. Give the new hire at least a few months to show progress and put a clear training schedule in place.

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Consider other departments that may benefit from the new hire

Sometimes, the new hire may be unsuitable simply because the role is not right for them. If you believe the person is a great culture fit but possibly unfit for the role, consider other parts of the business that may suit the new hire better and may benefit from having someone like them join their team.

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Look at the pros and cons of keeping the new employee

Ensure you are making rational decisions by weighing up the pros and cons. What value has this employee added to your team and business? What has become harder or easier since their start? At the end of the day, your decision to keep or let the employee go will be well-informed.

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Let the new hire go

Letting the new hire go should not be your first option. Terminating someone irrationally could open an unfair dismissal case. However, acting too slowly will only increase the damage caused by the new employee. Consider the points we’ve mentioned above before terminating employment.

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Go back to the start of the hiring process with new insights

Sometimes, the worst experiences are the best learning curves. What did you learn from hiring this employee that will lower your chances of making the same mistake? Could you have reached out to different networks? Did you need someone who had more technical skills? Did you find that the new role was actually unsuitable for the team?

You may reconsider unsuccessful applicants. If you had trouble choosing between two candidates at the end of the previous process, you now have the chance to revisit and reassess their suitability.

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How to avoid hiring the wrong person

Common mistakes that lead to hiring the wrong employee include:

• Hiring in a rush
• Not checking references
• Not assessing the candidate’s skills thoroughly
• Relying too much on job boards

To avoid hiring the wrong person, check out our  guide for writing attractive job descriptions  and  improving your selection process .

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If you’d rather save yourself the headache of hiring a potentially unsuitable employee, fill in the form on this page and let us find the right fit for you.