Why 95% of Companies Make Bad Hires

by Suzanna Colberg May 11, 2016
May 11, 2016

Why 95%25 of Companies are Making Hiring Mistakes


It’s no secret that an unrefined hiring process can cost an organization thousands, or even millions of dollars annually. Additionally, as much as 80% of employee turnover stems from bad hiring decisions, according to the Harvard Business Review.


The good news is if you’ve made some hiring missteps in the past few months, you’re not alone.


According to a Brandon-Hall research brief commissioned by Glassdoor, a staggering 95 percent of employers surveyed admitted to making hiring mistakes by recruiting the wrong people each year.


The researchers of the study highlighted that while many organizations have precise figures regarding the expenses associated with hiring a new employee, few that were surveyed (30 percent) were clear about the cost of a bad hire once they crossed the threshold.


According to the survey, bad hires produce less quality work than high performers and delay company goals. Additionally, bad hires are more likely to make an early exit, or cause other employees to leave. Team dynamics also take a hit when certain individuals aren’t performing; according to the study, poor performers who stay affect performance and engagement levels of their peers as well.


5 Talent Selection Process Errors that Lead to Bad Hires

In terms of recruiting top talent, there are as many strategies as there are businesses looking for quality hires. As competition expands on a global scale, many recruiters are left scrambling to fill vacant positions to meet the demands of organizations without a solid pre-employment selection process.


However, the lack of a consistent strategy can poke holes in your hiring process, leading to an influx of less-than-ideal employees. The survey highlighted five common areas for missteps in the hiring process (and how to fix them).


The Interview Process Isn’t Standardized


When it comes to hiring the wrong employee, missteps begin with the interview process. In fact, 69 percent of companies surveyed felt the interview process had the biggest impact on the quality of hire. Not only that, but companies lacking a consistent pre-employment selection process are five times more likely to make a bad hire.


Lack of a standardized interview process can lead to hiring mistakes.


Eliminating the cost of a bad hire requires a standardized interview process and recruiting approach. Your recruiting team needs the right set of tools to evaluate candidates. According to the study, 60 percent of organizations that leverage best practice guidelines for conducting interviews have an optimized recruitment strategy that aligns with business objectives. Just 10 percent of companies surveyed without specific interview guidelines could say the same thing.


The Employer Brand is Weak


In today’s talent pool, candidates are going to be seeking a company they feel good about working for. From your company’s social media posts to the language you use in your job postings, candidates will be using all this information to determine whether or not your organization is one they want to work for.


Employer brand, as defined by the study, is a measure of the viability of a company’s employee value proposition.


Paying close attention to the management, perception, and communication of your company’s brand is critical in establishing and maintaining a positive image. Even candidates who aren’t hired should be treated as well as those who are. The survey found companies that invest in building and managing a positive reputation increase their odds of avoiding bad hires by 300%.


The Candidate Experience Isn’t Optimized or Mobile-Friendly


In today’s recruitment climate, candidates not only expect companies to treat them like their customers, they expect the pre-hiring process to be quick, easy, and therefore having the option to complete as much of the pre-hiring process via mobile is a must-have.


The Candidate Experience isn't Optimized or Mobile-Friendly


Only seven percent of organizations surveyed used social media in recruitment efforts, and well over half (58 percent) of organizations surveyed did not utilize mobile for talent acquisition.


Companies who optimized every point of interaction between the business and the candidates stated an increase of 70% in their overall quality of hire, and there are several methods you can use to measure your candidate experience once you have taken the time to create one unique to your organization.


Not Enough is Being Investing in the Onboarding Process


Once a candidate is hired, the onboarding process has a large impact on whether or not he or she decides to remain with the company, the survey found.


Companies that fail to implement a consistent onboarding process and socialize new hires in the company culture experience poorer performance, retention, and engagement.


When it comes to hiring, it takes more than a few introductions to co-workers and a to-do list to properly onboarding an employee. Providing new hires with guidance in the form of mentorship, social programs designed to help new hires network in the organization, and advanced technological learning tools can all impact a high-potential hire’s decision to stay after the one-year or even the 90-day mark.


There’s a Lack of Data in the Pre-Employment Selection Process


Just 5 percent of organizations surveyed evaluated candidates during the sourcing/screening process.


As the recruiting and hiring processes become more complex, organizations need qualitative data to make informed decisions regarding talent. Half of the respondents stated they assessed candidates after onboarding, while 32 percent said they evaluated applicants during the interview process.


The researchers’ recommendations? Assess early and often.


The skills, abilities, and motivations of applicants are diverse. An organization’s ability to understand and adjust to the peaks and troughs of the hiring environment and hiring process decreases the likelihood of making poor hiring decisions. The qualitative data from pre-employment assessments provide an objective look at applicants and have a greater impact on your quality of hire than interviews, employer brand, and onboarding.


Talent selection tools can help provide information to determine whether or not a candidate demonstrates skills, abilities, and motivations that align with company culture. Essentially, assessments aid in determining whether a candidate is, ultimately, a quality hire.


 


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