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March 18, 2009


What does a bad new hire cost?

After years in HR, I’ve always heard – ‘What does a bad hire cost?’ If you make a lapse in judgment, what does it mean to the bottom line? Commonly I’ve been told – two years’ salary. For instance hiring someone at 50K means you lose the 100K in pay, benefits, time and training. These are things easily measured. I’ve found the true risk is much deeper.
We all forget that this person represents our company. It is their face on our message, our values and our mission. We, like most, have worked for decades to build a brand that is well respected and admired within our community. Salesmen at our company typically hold on to their positions for years, so the public face of our company is very stable.
We hired someone who looked very promising on paper. They had all the experience, credentials and interviewed very well. After 10 months of employment we found that this one decision cost us millions in sales and the loss of a handful of our core clients. Looking back all of the signs were all there. We decided to bend the rules and forgo some of our standard testing since this candidate ‘looked so good on paper.’ A simple Myers-Briggs http://www.knowyourtype.com report would have revealed just how strict the guy was. His personality was very extreme and it offended more than it helped.
The public saw us as the company was easy to get along with. We saw a candidate that would offer structure. This snap decision created conflict with our public persona and allowed a competitor to steal our best customers. Take it from me, don’t hold back with anyone and understand each new hire represents your company to the world.

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