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Sales Wolf Blog

New Study - Idiots Continue To Make Bad Hiring Decisions

Posted by Rainmaker

Dec 14, 2012 3:00:00 PM

A recent CareerBuilder study suggests the cost of making a bad hire is high.  

Their numbers are startling - 69 percent of employers have been adversely impacted by a bad hire this year.  It is incredibly expensive to hire the wrong employee...  

  • 41 percent estimated the cost to be over $25,000.
  • 24 percent said a bad hire cost them more than $50,000.

From the CareerBuilder study...  The most common reasons a bad hire is made include:

  • Needed to fill the job quickly – 43 percent
  • Insufficient talent intelligence – 22 percent
  • Sourcing techniques need to be adjusted per open position – 13 percent
  • Fewer recruiters due to the recession has made it difficult to go through applications – 10 percent
  • Didn’t check references - 9 percent
  • Lack of strong employment brand – 8 percent

The number one reason a bad hire is made is because they "needed to fill the job quickly..."  Managers often push hard for the quick hire... The result of rushing is a bad hiring decision.

Look at the list again.  Notice what did not make the list?  "Failed to use a valid pre-employment personality profile" was not on the list - nor was "Failed to use a structured interview process".  From my experience, companies that fail to use a structured interview process in combination with a pre-employment personality profile - consistently make many more hiring mistakes.Dunce cap

Hiring talent that does not fit the job creates mediocrity.

When will companies get it?  The current strategy of using unstructured interviews without pre-employment personality profiles is allowing too many low performers to get on the bus.  

Remember the definition of insanity by Albert Einstein...  

"Doing the same thing over and over again and expecting different results."

From my experience there are four contributing problems:

  1. Managers often do not know better.
  2. HR managers who should know better but do not know better.  
  3. The C-suite trusts HR but should be verifying.

Managers usually do not know what they need to know.  Managers often make the hiring decision without HR assistance and they often screw it up royally.  The problem is managers typically do not know enough to be dangerous when it comes to hiring the best possible talent.  Managers do what they always have done prior or what they have seen others do - rush the hiring decision and hire based on gut instincts.

Managers need a "get it" HR professional to keep them out of trouble.  The problem is there are not very many "get it" HR professionals. 

HR managers come in two kinds...  "Get its" and "idiots".  And there is no "gray area" in between.  

If your HR manager is naturally curious, never satisfied with the status quo and always looking for a better way - you have a "get it".  "Idiot" HR managers do not evolve their hiring practices, they rely on their "gut intuition" and use an unstructured interview process.  

The worst "idiot" HR managers rely completely on their "gut" to "read" talent and they use an unstructured interview.

Whether you have a "get it" or an "idiot" HR professional; the C-suite should be involved, aware and needs to push HR to improve their hiring practices on a continuous basis.

The C-suite trusts HR but should be verifying.  HR has often saved the C-suite from some nasty employee issues.  The result is HR often has a "mythical following" by the C-suite - HR can do not wrong. The result is many HR managers have free reign to use ancient hiring practices without accountability for the results - making bad hires.

What should you do?

  1. Identify the cost of the problem.  Until you sit down and actually look at what making a lousy hiring decision costs you, you will continue to hire people who do not fit the job.
  2. Replace your "idiot" HR person with a "get it".  It takes time, but there are "get it" HR professionals.  Get yourself one and you will prosper.
  3. Hold HR accountable.  Unfortunately, way too many HR managers are using antiquated hiring practices that involve the "gut".  Many HR managers do not use pre-employment personality profiles because they do not like nor understand them, they do not trust assessments, and/or it involves change from a practice they adopted 15 years ago.  
  4. Require all managers to use the revised hiring strategy. A lot of managers believe they are "special" - especially sales managers.  Everyone must follow the revised hiring strategy - or have them go work for the competition.  
  5. Be naturally curious.  There is always a better way.  Keep seeking the better way and you will find it.  

Check out the CareerBuilder study here...  

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