The Cost of a Bad Hiring Decision

Hiring Managers!  Do you know all the costs associated with making a bad, biased, or rushed hiring decision?  There’s more to this than the obvious.  Instead of reading about it, here’s an opportunity to hear me tell you as I take a break from a bike ride.  Yep, I bike at lunchtime.  A lot.

Link:  https://youtu.be/JH57fjWyQW0

Why Use a Recruiter: Part I – The Cost of a Bad Hire

Whether internal or external, recruiters bring value to a difficult process of finding the best talent for an open position in a company.  Granted, if a role has countless, very qualified candidates at the door, random luck will suffice.  However, for many roles, careful screening of potential candidates is required to ensure the best fit for the job is hired. Taking shortcuts can lead to settling for the best of what may be a “B-list” of candidates.  Sometimes, employers think the candidates who apply for their open position on a job board are the best possible candidates.  A good recruiter can prove this wrong time and time again.  Sometimes the best candidates are not even looking for a change (until it is presented to them).

One of the obvious problems associated with hiring a “less-than-optimal” employee is the risk of an eventual mismatch and having to let go of the employee in the first 90 to 180 days (by the way, good recruiters replace their hired candidates if this is determined early on).  There are many costs related to a bad hiring decision–many companies have unique situations that contribute even more to the wasted time and money.  Zappos CEO Tony Hsieh once estimated bad hires had cost the company “well over $100 million.” In general, the U.S. Department of Labor estimates the price of a bad hire to be at least 30% of the employee’s annual salary. 

The more influential the role, the bigger the cost might be.  What about hiring a new Sales and Marketing Director?  During the hiring process, the company is losing potential revenue.  Once hired, the new Director must get up to speed, learn the products and approach, start down the road of getting productivity within the team, and then finally start to concretely contribute to the bottom line (hopefully).  If things don’t work out, and the company has to start all over again, imagine how much money has been lost in unrealized revenue.  This doesn’t even include the other employees’ time in training the new-hire, setting up benefits and payroll, and other tangible activities.

Taking this a step further, how does firing employees impact the rest of the team.  Employees start to wonder if they are next, or if they’ll ever have a boss or peer that will be around longer than 90 days.  This assumes the “bad apple” has not rubbed off on others, perhaps telling stories about how messed up the company is compared to other places they have worked.  This can lead to a downward spiral, snowball effect wrapped into one, along with some serious morale issues.  This is just the internal effects.  A bad hire can also sour relationships between the company and its customers (potentially leading to more lost revenue, legal issues, or even worse, a negatively impacted reputation in the marketplace).

Good companies tend to give poor performers a chance to rebound.  After all, maybe some of the problem is due to the company’s training practices or just bad timing.  Performance reviews and coaching requires time and energy beyond the normal training.  Time that could be spent working on the regular day-to-day issues.  Worst case, these leaders have to deal with micromanaging and potentially, disciplinary actions.  If this pattern of bad hiring decisions continues, the decision-maker’s reputation may quickly become tarnished, too.

Other non-recoverable, tangible costs include relocation allowances, referral bonuses, unemployment insurance withholding, and sign-on bonuses.  A huge, non-tangible cost includes a newer concept, “Employer Branding.”  Actually, the idea is not new–the term is.  People have checked into company’s reputations long before there was Glass Door.  Simply by asking their network, potential candidates can see if an employer is worth the trouble before even applying for a position (or saying yes to a recruiter’s request to interview).  Once a company’s reputation is blemished in this area, it can be very hard to attract good talent for a long time.  Then the likelihood of hiring B-list candidates becomes even higher, and the whole cycle starts again.  A little scary, actually.  Rate of turnover or average tenure are among the more popular questions recruiters are asked.  People want a good salary, but they want stability even more (along with opportunity for growth). 

The cost of a bad hire has so many aspects, it is hard to get an accurate measure of its impact.  And again, it does depend on the role and span of responsibility.  However, much of what’s been discussed effect all companies when they do not hire the best candidate.  The more the process is focused on quality, the more likely the best will be hired.  Often times, a third-party can be the difference.  Someone who will put in the time to present a short list of great candidates and guard against hiring those who only claim to be a good fit.  A good recruiter also can take some of the subjectivity out of the process–their reputation is on the line every time they present a candidate.  They don’t want to fail.  A really good recruiter can also help with the interviewing and selection process the company is using.  This focus on quality can help a company avoid the cost of a bad hire, but also allow their hiring decisions to pay dividends for a long time.

Job Interview Techniques

I know there are hundreds of articles on job interviewing (and likely lots of overlap), but here’s one more that compiles some of my thoughts on interview prep and types of questions you’ll be asked with other expert advice on controlling your interview.  Within the article there are lots of links to other aspects that might interest you.

Article: Smart Executive Job Interview Techniques from the Experts

Virtually Reality

When social media reputation was becoming a component of our professional image, I wrote an article to advise job seekers to monitor and manage their social media behaviors.  Recently, Job-Hunt.org asked me to update this article to address how hiring companies currently view this “aspect of your character.”  The simple truth is social media reputation is here to stay, and companies can use it in their hiring decisions–if they follow some simple guidelines.  Take a look at this article to get the bigger picture.

Article:  How Your Social Media Reputation Impacts Hiring Decisions

New Year’s Resolutions and the Job Search, Part II

A few years ago, I wrote an article for job-hunt.org about New Year’s Resolutions as they pertain to a Job Search. It has become an annual tradition to share it on Social Media every January as the content is still relevant.  This year, a colleague of mine, Jacob Share, took this article a step (or two) forward.  Please have a look at both articles if you’re entering 2018 with sights on a new job!

My original article:  New Year’s Resolutions for Job Seekers

Jacob’s article:  Awesome New Year’s Resolutions Ideas for Job Seekers

Staying Focused Throughout Your Job Search

There is no doubt that finding a new job is hard most of the time.  There are going to be ups and downs and moments when you’re not sure you will ever find the right position.  The key is to remain positive and analyze your process continuously to look for opportunities to refine your approach.  My latest article for job-hunt.org also addresses how to rationally think about the challenges facing you during this important stage in your career.

Article:  Staying On Track and Optimistic in Your Job Search

Managing Career Change

The majority of the working population alter their career path at least once in their professional life.  It could be minor and within their own employer’s walls.  Or, it could be a life-changing event, like leaving consulting to become a high school literature teacher.  Typically, it’s a little tougher to get buy-in from potential employers that you can adequately handle a new role utilizing new skills (as compared to the competition who may have had that role before).  My latest article for job-hunt.org discusses many aspects of managing this leap.

Article:  How to Transition to a New Career

Non-Standard Answers to Standard Questions, Part II

In an article I wrote for Job-Hunt.org back in 2015, I covered a lot of ground on how to answer some of the standard interview questions.  The editor recently asked me to add more material to that article, and now we’ve covered even more ground on some serious questions.  For your convenience, I’m sharing the new material for this article below (use the provided link above to see original material, too).  As always, feel free to comment or add your own experiences.

How did you find this job?

You may have found the opportunity through research on ideal jobs where you can make the most impact and hope to grow professionally. I would also hope you looked for companies that you feel meet your standards for corporate culture, investment in employees, successful business model (or perhaps giving back to community), and any other aspects you feel are important to you. Make sure you can go into a little detail on what you found in your research.

The “job” may have found you instead. In that case, you can say you were contacted by HR or a recruiter who felt you were a good fit. But don’t leave it there. You should still mention you did your homework and verified that this is right for you—as a potential contributor to the company’s success, and as a good match for what you’re looking for in an employer.

Why do you want this job?

There should be a heartfelt answer on this one. Your gut should be giving you the answer. Although, if it is about money, location, work schedule, benefits, and other factors not tied to actual role, you may want to think a little more about your answer. All those reasons are not important to the hiring manager. They want to hear that this job is exactly what you’ve been thinking about as a next step in your career. Of course, the follow-up question they’ll ask is: How so? Be prepared to answer that with your rationale for how this job meets your professional needs and how you can contribute at your highest potential while in this role. People want to feel like their work means something. There is nothing wrong with sharing that feeling in a thoughtful way.

Why do you want to leave your current job?

This can be a deal-breaker question. Obviously, if you say you hate your current boss or company, the interviewer will naturally believe you will hate them eventually. If you say, the compensation or role is below your standards, they will again assume the worst.

Although these may be legitimate reasons to leave a job, there must be other reasons, too. Your current company or department may have become unstable (hopefully the interviewer’s company is very stable). Your current employer may not be able to offer you any professional growth (the interviewer’s should be able to do this). Do you see a pattern here? Highlight a reason that the hiring manager cannot be concerned about.

Of course, if you have an issue that is very important to you that could be a deal-breaker (like company culture), you can mention it. Just be prepared for them to take one extreme or the other. For example, maybe you only want to work for companies that buy from vendors in your home country. The hiring manager will let you know if their company does this. And if they don’t, I guess the interview is over.

Why did you quit your last job?

This is a tough one. Typically, one should not quit a job until they have another. Life doesn’t always allow that to happen. Did you quit because you couldn’t spend enough time looking for your next job? Perhaps the company you worked for was close to shutting down and you didn’t want to waste valuable time waiting for the last day of operation.

Certainly, there are common reasons that are understood as necessity: had to move to a new location for various reasons; family or health reasons; unbearable work conditions (careful here, as already discussed).

The key to answering this question is to keep it short and don’t feel the need to expand to include a lot of details.

Why were you fired?

This is another danger zone. This is not the time for defending yourself with a long story about you being the victim. If you made a mistake, you are going to have to try and minimize the severity of the situation. An argument with a boss could be described as a difference in opinion. Not following orders because your moral compass told you not to could be described as “taking the high road.” Just be careful not to cast blame on others. Consider including a “silver lining.” Did you learn a lot from the experience and now possess knowledge that will mitigate the chances of this happening again?

If you were part of a layoff, this is different from being fired. It was likely a financial decision and you were part of a group that was targeted as part of budget cuts. Layoffs are typically not personal—they are just business. Hiring managers know this (and likely have been involved in one at some point in their career).

Explain your gap in employment

I’ve dedicated a whole article to this topic. The bottom line is you should make sure to paint a picture that you were productive, improving yourself, helping family, or something constructive. Hiring managers don’t want to hear that you felt it was time for a “long-awaited break from the rat-race.” Or time to recharge your batteries. The first thought that will pop into their heads: When is your next break coming? Probably in the middle of a big project we’re working on.

Do you have any questions?

My simple advice is: yes, you better have questions. When I hired people to work on my teams in the past, I expected interviewees to have questions. This is a chance to “interview the interviewer.” In essence, to learn about the company, the role, the corporate culture, the manager’s leadership style, and a host of other important things. Candidates who are genuinely interested in the opportunity, ask these types of questions. Those who don’t ask questions give the impression they’re “just kicking the tires” or not really too concerned about getting the job.

When given the floor to ask questions, you should realize the interview is not over yet. Good candidates know this is another time to shine. It is imperative that you ask questions that do three things:

1. Show you did a little research about the company.
2. Mention something else (related, but interesting) about you.
3. Will have an interesting answer or prompt a good discussion.

After you have had a chance to ask your questions, you will want to validate that you are an ideal candidate for the job. To do this, you should probe into the minds of the interviewers and see if there are any concerns they have about you. The key question to do this can be along the lines of:

“After discussing this job, I feel as if I would be a perfect fit for it. I’m curious to know if there is anything I said or DID NOT say that would make you believe otherwise.”

The answer you get to this question may open the door to mentioning something you did not get to talk about during the interview or clarify any potential misconception over something that was covered. You may not get a chance to address shortcomings in a follow-up interview—it is imperative to understand what was missing from the discussion while still in the interview.

The "Pre-Interview": Informational Interviews

Most know the value of professional networking.  Whether you need a new job now or later, continually building your network with decision-makers and leaders can only help your career in the long run.  I’ve talked with countless colleagues, friends, and job seekers who have told me stories about finding a job (or a job finding them) through a contact they connected with months to years ago.

One of the key ways to establish a strong network and learn about career opportunities (present and future) is to have face-to-face meetings with hiring managers, company owners, or well-connected professionals.  There is a bit of etiquette and approach to doing this.  My latest article for Job-Hunt.org walks you through the process.

Article:  The Hidden Value of Informational Interviews

Job Search in 2017

As has become tradition on my blog, I’m sharing a great annual collection of job search articles put together by a colleague.  From interviews, to resumes, to LinkedIn profiles, to personal branding.  Take a look at these if you’re going to be searching for a new job in 2017.

Article:  The Top Job Search Articles of 2016