What are the consequences of Bad Hires?
September 9, 2021
Recruitment is one of the most important tasks for companies as the company’s success will be influenced by the people working there. However, sometimes the wrong person for a job is hired, which can bring a lot of far reaching consequences for the business. Here are four of the most common consequences:
One of the main consequences of bad hires is the loss of productivity that the company will experience. If the person that was hired can’t do the job effectively and the output is not satisfactory, it can make the business suffer. A bad hire will not just influence a single employee’s performance but especially over a longer period of time, the company may experience an impact on results and performance of the entire team. Furthermore, all the time and resources that were spend on on-boarding and training the new hire will also impact the productivity of existing employees and managers, as they be less productive and efficient with their own tasks in these times as well, especially if they need to take over tasks from the bad hire that are not in their job description.
As a consequence of lost productivity, it comes natural that it will have financial effects for a company as well. First of all, the company will pay salary for an employee who doesn’t perform well. Also, a lot of money will be invested in the hiring process (e.g. cost of recruiters) as well as the training of the employee that ended up being a bad hire. Furthermore, depending on the contract, the company may have to spend a lot of money on both severance pay if they decide to let the employee go and the cost of finding a new hire.
If an employee turns out to be a bad hire and doesn’t perform to the expectations of the company, it can also have an effect on the rest of the team. The existing employees may feel dissatisfied or become less motivated if they have to rely on a team member who doesn’t contribute to the team sufficiently. This can bring the morale of the employees down and cause tension or conflict. If employees get dissatisfied, they might even leave the company and the company will lose talent, knowledge and skills.
If a company has a reputation of high employee turnover, bad hiring decisions or an unpopular company culture, it will have a bad outcome for how society looks at the company. Potential candidates often research a company before applying and if the reputation of the company is damaged, the company will naturally lose top talent candidates. It could also have an effect on trying to find investors, business partners, customers or other stakeholders, which could damage the company in the long-term. Once the trust with these stakeholders is broken, it can take years to rebuild.
Bad hires will have several consequences to companies and they might not show from the start but rather have an effect on the long-term. Therefore, it is crucial that companies always continuously work towards taking the best hiring decisions before bad hires happen.