CFOs say morale and productivity are the top negative impacts of a bad hire

By Michael J. Burns, courtesy of SBAM Approved Partner ASE

The staffing firm Robert Half recently surveyed Chief Financial Officers asking them what they believe to be the single greatest negative impact of hiring the wrong person. Surprisingly, only 25% of CFOs named “monetary cost to the business” as the top impact of a bad hire.  Instead, 39% named “morale” and 34% named “productivity” as the main negative consequences of a bad hire.

Still, these survey findings may not go far enough in identifying all the fallout from a bad hire or, worse, a series of bad hires. A recent real-life situation illustrates the point:

A department is handling a heavy load of project work. The staff must not only handle a large volume of work but also handle highly complex contract administration steps unique to its business. The department head, hoping to just get some extra hands, hires not one but two unqualified professionals to supplement her staff. These new professionals, though believing they were qualified to do the job because the hiring manager led them to believe it so, unsuccessfully try to pick up the work. The already overworked staff now had to fix the problems created by the newcomers while keeping up with the work at hand. Their own work began to suffer. Seeing her reputation in the company at stake, the hiring manager began to rely more and more on the existing staff to get the project work done but did not fire the new employees. Instead, she let them “drift down” to a level of work they could handle—not what needed to be done.

What happened? The overworked and qualified employees started to look for work elsewhere, some successfully so. In other words, the immediate impact of bad hiring fell on morale and productivity, but the longer term impact was even more damaging—the loss of competent employees.

Remember, when good employees quit, they typically quit their managers. The cost of a bad hire can spread to include the loss of otherwise qualified staff who in turn have to be replaced and new employees trained.

“In the current hiring environment of talent shortages, employers may feel pressured to cut corners in order to speed up the hiring process,” noted Greg Scileppi, president of Robert Half, International Staffing Operations. “Although acting with a sense of urgency is important, following a clearly defined hiring process and using the right resources can help prevent unnecessary headaches often associated with rushed decisions. Engaging experts such as human resources professionals and recruitment specialists can help substantiate the process of following through with reference checks and ensuring that candidates not only have the technical expertise needed to fulfill the role, but that they are also a cultural fit for the organization.” 

As illustrated by the story above, a bad hiring decision can cause a negative ripple effect through and organization. Employers should ensure their internal hiring process is not compromised for expediency. HR should not only provide qualified applicants but should police the hiring process to ensure the final hiring decision makes sense.