Bad Hiring Comes Home to Roost

Bad Hiring Comes Home to Roost

Your poor judgment, and that of the leaders you helped foster, may have greater consequences than your own embarrassment. According to the results of a study released last month by Right Management (www.right.com), a Philadelphia-based career transition and organizational consulting firm, bad hiring and promotion decisions come with a significant aftermath.

The survey of 444 organizations throughout North America showed that lower employee morale and decreased productivity are the biggest consequences of these less-than-stellar choices. Sixty-eight percent of survey respondents cited employee morale as a result of these decisions; 66 percent said decreased employee productivity was a consequence; 54 percent linked shoddy hiring and promotion choices to lost customers and market share; and 51 percent said not hiring and promoting properly means higher training costs. And, that’s not the only cost.

Human resources gurus, trainers and organizational leaders who don’t think carefully before making their next appointment could cost their companies money in other areas as well—especially when direct reports decide to hit the road. Forty-four percent of leaders, for instance, said bad hiring decisions result in higher recruitment costs, and 40 percent cited higher severance costs. And the costs related to those lost employees keep on adding up.

Recruitment, training, severance and lost productivity may add up to two times the employee’s annual salary, 42 percent of those surveyed said; 26 percent said it amounted to three times the employee’s annual salary; 11 percent cited costs up to five times the employee’s annual salary; and 6 percent said it’s four times his or her salary. Fifteen percent said it’s about equal to what the employee would have made in a year—had they stayed, of course.

Source: INSIDE TRAINING