Don’t do it: 5 costly hiring mistakes employers are making
Some analysts are predicting 2015 will be a big year for hiring. That’s good news. But the bad news is some employers have glaring holes in their hiring processes.
Every organization has some turnover, concedes a recent post on The Resourceful Manager. So, to stay ahead of the turnover curve, constant hiring and recruiting is essential.
Not paying attention can cost you big, the website points out. First, there are the direct costs:
- recruiting ads
- fees paid to headhunters, professional recruiters or placement firms
- training costs for having sent the employee to job-specific training seminars, and
- severance costs when the employee is let go.
And the indirect costs:
Staff time, which is part of payroll costs. How many managers and colleagues are involved in the recruiting process from the beginning, drafting or approving the ads, reviewing resumes, interviewing candidates (either by telephone or in person), checking references, negotiating contracts concerning working conditions, salary and benefits? The staff time involved surely went well beyond the people in the HR Department, and when everything is all added up in man- or woman-hours, the figure is likely to be fairly hefty.
Productivity costs, which are hard to calculate but very real nonetheless. In business, a team of people is typically only as strong as the weakest link on the team. Even just one bad hire is likely to drag down the productivity of the whole team.
Lost opportunity costs, which are much harder to calculate, but can be vastly more significant. What lucrative sales contracts did the company lose because the employee who didn’t work out screwed up an order? If the new employee was supposed to get a marketing campaign for a new product line off the ground, how much revenue had been budgeted from that new line that did not materialize, in whole or in part? How much time did the wrong hire set you back? How long will it take you to recover?
Morale and resulting turnover costs. People like to work with other smart people who energize them and spur them on to greater heights. One member of a team who’s not pulling his or her weight can demoralize a whole team and sour the good people forced to put up with the hiring mistake on the whole company (“who hired this yo-yo in the first place?”). The resulting dent in morale on the good people you wanted to keep can easily result in unwanted turnover, with all its associated costs.
Litigation costs, which are extremely difficult to predict, but can reach deeply into a company’s coffers. Of course you know you’re terminating the employee for cause because they just couldn’t do the job. But what if they decide to concoct some illegal reason why you fired them, claiming it was because of race, ethnicity, national origin, gender, age or some other protected area. The legal fees needed just to get these kinds of cases tossed out of court can be prohibitive, which is why so many companies will simply settled a case. And if the employee’s attorney is skillful enough to actually get the case before a sympathetic jury, you could be staring down a seven-digit verdict — on top of whatever your own company lawyer is costing you.
Pitfalls you need to avoid
More than three-quarters (76%) of employers plan to grow their workforce this year, according to HireRight’s “2015 Employment Screening Benchmark Report.” That’s certainly encouraging.
But not all of the findings were as chipper as that figure.
In producing the report, the background check provider HireRight polled more than 3,000 HR, recruiting, security, and management professionals to find out what their hiring practices look like.
It found some employers are making mistakes that could hurt them down the line.
A handful of the most common mistakes:
- Failing to verify credentials. HireRight found that 50% of employers weren’t checking job candidates’ education backgrounds, and 32% weren’t checking previous employment. This is particularly concerning when you consider that 86% admitted to having caught a candidate in a lie at one time or another.
- Not re-screening after the initial hire. Just because a person was squeaky clean when you hired him or her five years ago doesn’t mean their record’s still spotless. HireRight warns that failing to spot potentially dangerous additions to an existing employee’s record could leave you open to negligent retention claims down the road.
- Failing to drug test. Changing marijuana laws are making this a more complex area, but HireRight suggests that more employers consider conducting pre-hire and ongoing drug tests in the name of preserving workplace safety and productivity, and decreasing absenteeism. Currently, 34% of employers don’t conduct any type of drug testing, the poll found.
- Conducting risky social media screenings. HireRight says 36% of respondents use social media to screen applicants, a figure which is growing. This is an area where employers need to tread carefully to make sure they’re not screening out applicants for discriminatory reasons or digging up protected information.
- Not going over the border. HireRight says 15% of respondents conduct global screening — a figure it deems too low. The firm says it’s important for companies to take their screenings global and not bypass verifying candidate’s non-U.S. work history and qualification claims.
Cite: “2015 Employment Screening and Benchmarking Report,” by HireRight.
