Your business is doing well — your customer base is booming, your product’s popularity is soaring, and the world is your oyster … except your company can’t keep up.
If you are in high-growth mode, you’re going to need more people. At the same time, the competition for talent has never been fiercer. That means incredible pressure for companies today to hire as many people as they can, as quickly as they can to lock prospects down before anyone else snaps them up.
Don’t make that mistake. We all know, theoretically, that making a bad hire sets companies back. Simply put, a bad hire (someone who lacks the skills or drive to get the job done, or is not a fit with your culture) won’t move you forward and in fact may move you backwards. But most companies have no idea the impact of a single bad hire has on their business. Believe it or not, data shows that the average cost of a bad hire is up to five times that person’s annual salary!
That’s a pretty sobering statistic, but in the midst of a company growth spurt when the pressure’s on, it’s easy to default to making the first hire instead of the right one. You may think, “So what if we make a few bad hires? — we’ll take care of it later.” The problem with that approach is that bad hires almost never end up having zero impact — they have negative impact instead.
The Real Cost of Bad Hires
Most mangers think that if they hire quickly and fill a role, then they’ve plugged a hole. People think, “Someone’s better than no one, and even if they turn out to be a bad hire we’ll just replace them.”
In reality this plays out as follows:
- It takes you six months to truly figure out that the person is a bad hire.
- You start some type of formal process to coach or manage that person and improve his or her performance, which goes on for another three months.
- Finally you fire the person and start the process of replacing them. That probably takes another three months.
- You’ve wasted a whole year.
But that’s not all. Throughout the process, you as a manager had to spend your precious time coaching and managing someone who was having zero impact on your business, when you could have spent your time helping and coaching some of the young superstars on your team instead.
Sometimes it gets even worse; if the hire had massive performance or fit challenges, the best people on your team had to compensate for those, which means you’ve compromised your best people and their work.
And just when you thought it couldn’t get worse, there are also situations in which a manager hires too fast and brings in a few bad hires in one go. In these instances, I’ve seen top performers leave companies because they don’t want to work with mediocre talent. Now, that can literally kill your company.
Avoiding Bad Hires
Consider that fact that the average job interview lasts 40 minutes, and a recent survey from SHRM found that 53 percent of resumes are inaccurate. So with 40 minutes of conversation and a single sheet of (possibly compromised) paper, you’re making a decision that could cost (or make) yourcompany hundreds of thousands of dollars. Think about that for a minute.
Not only are interviews not a great way to assess someone, but hiring managers often make major vetting mistakes during them. Managers have a tendency to focus on a candidate’s weaknesses and great candidates get rejected all the time because of one weakness –when in fact they might be major assets to the company in spite of it.
The truth is that interviews are not a great way to assess people. Hiring managers make major vetting mistakes when they interview candidates all the time. They have a tendency to focus on a candidate’s weaknesses, and great candidates get rejected because of one (often irrelevant or unimportant) weakness — when in fact they might be major assets to the company in spite of it .
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5 Ways to Hire Like It’s 2021
Consider the following case: A VP of sales is looking for a new account manager. She interviews a candidate and rejects him because he has not sold a product in this company’s target market. What the VP of sales missed is that the candidate had a proven history of selling into different markets, showing that his major strength is his ability to learn, adapt, and sell in different situations.
What hiring managers ought to do: when they start the process looking to fill a role, make a list of the strengths they absolutely need (don’t make it a laundry list — just the essentials) and then a list of the weaknesses you are willing to tolerate. Understand that everyone has weaknesses so you just need to be clear about what you are willing to live with.
Hiring for Growth
If you want to grow successfully, you’re going to have to hire deliberately. That means really putting thought into the talent you bring on. “Does the job” isn’t good enough. With the technology available today, we can get more information about candidates than was ever possible before — data about their past roles, samples of their work, snapshots of their character — and we can reach people we’d never have had access to 10 years ago.
Companies have no excuse for failing to invest in their hiring. It is the single most determinate factor of their ultimate business success (or lack thereof). This means investing in hiring processes, interview training, and strong collaboration between all team members involved in the hiring process. It means doing your homework outside of the interview process. Today, the Internet allows us to learn so much about a person before you even meet them.
You need to invest in tools and resources to make sure you are finding, engaging, and ultimately hiring the people you really want working for you, not just waiting around for whoever happens to fall into your lap.
By locking in the right talent early, you can create a rock solid foundation for future success. If you want to grow a strong company, you’ve got to hire amazing people.
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