The Recruitment & Employment Confederation (REC), the membership body to which Regan & Dean and most reputable recruitment firms belong, has calculated the cost of making a bad hiring decision. The results are likely to shock you. 

REC’s research report, Perfect Match - Making the right hire and the cost of getting it wrong, describes a credible formula for calculating how much hard cash organisations lose when they appoint the wrong candidate into a key position. 

Using a middle manager role attracting an annual salary of £42,000 as an example, REC estimates the cost of appointing the wrong person is more than three times their annual salary, once the impact on others’ performance and motivation is taken into consideration. 

This breaks down as illustrated below. The calculation assumes the individual leaves or is dismissed within the first eight months:

© Recruitment & Employment Confederation

Clearly, the more senior the role, the more expensive the potential impact becomes. And all the time you have the wrong person in the role, you’re missing the opportunity to get the ideal person on board.

Almost all organisations are affected
If you’re thinking this only affects a handful of organisations you’d be mistaken. REC’s research with HR professionals found that an astonishing 85 per cent of them said they had worked in organisations that had made bad hiring decisions. 

So how do you make sure you’re not one of that 85%? 

5 ways to reduce the likelihood of a bad hire

1.    Hire for attitude and cultural fit as much as competence 
Most technical skills can be learned or developed, but it’s harder to change people’s attitudes and behaviours. Yet it’s often these factors that result in a new appointee leaving prematurely. 

Diversity of thought and background is, of course, essential for an organisation to thrive. But if an individual cannot work within the widely-accepted norms and culture of your business they are unlikely to do well. For both parties’ sake, it’s important to make sure there is a cultural fit.

2.    Ensure all key stakeholders are involved in the decision
It’s important that anyone who will have a significant influence on the success of the appointee is involved in the hiring decision. The last thing you want is for a key internal customer to say that if they’d had the choice they’d never have appointed the individual given the choice.

This is not always easy, especially in geographically dispersed organisations, but try to get every key contact involved in the selection process. It’s also helpful for candidates to meet a number of potential team mates so they can make an informed decision if offered the role. 

3.    Use role specific Assessment activities as part of the recruitment process
Wherever possible relevant assessment activities should be built into the recruitment process. These would, of course, need to be tailored according to the level of the candidate/role.  So, at the more junior end of the scale tasks such as copywriting, prioritisation, responding to a brief, role related activities, or giving a presentation, are all good ways of getting a more in-depth view of a candidate’s abilities and skills.  Competency-based questions, review of candidate supplied case studies, and well thought through interview questions focussed on the challenges of the role, are all activities that will help ensure a good hiring decision is made.

4.    Don’t skimp on references 
References are too often seen as a formality, whereas they should be considered an essential element in any decision. In many cases, they are the only objective evidence that a candidate is able to deliver what they promise.

At Regan & Dean we dig even deeper into references if we, or our clients, have any areas of concern. Although some referees are reluctant to go into detail in a written reference these days, an informal chat can be very enlightening. 

5.    Consider the time between offer and start date – and beyond
Some employers breathe a sigh of relief when their ideal candidate accepts an offer and move on to the next item on the to do list. Big mistake! 

This period is a dangerous and critical time when the candidate is likely to receive tempting counter offers from their current employer. If they’ve been actively job seeking they may even continue to attend interviews to see what their options are. 

It’s important to keep in touch with news, updates and perhaps invitations to key events to build up their connection and loyalty to your team. A good recruitment firm will do a lot of this for you, making sure the individual feels positive, supported and excited about starting the new role. 

At Regan & Dean we continue this support into the probation period, helping our candidates make a success of their first few months as they settle into the role. It’s something we find both candidates and clients appreciate. 

We’re so confident in the support we offer candidates and clients, that we offer a rebate scheme if an appointment does not work out for whatever reason. It’s rarely, if ever, that we use it but it provides clients with that extra confidence. 

If you’d value an approach that maximises the chance of a hire that works, backed by a clear rebate scheme, please get in touch. 

The Recruitment & Employment Confederation (REC), the membership body to which Regan & Dean and most reputable recruitment firms belong, has calculated the cost of making a bad hiring decision. The results are likely to shock you. 

REC’s research report, Perfect Match - Making the right hire and the cost of getting it wrong, describes a credible formula for calculating how much hard cash organisations lose when they appoint the wrong candidate into a key position. 

Using a middle manager role attracting an annual salary of £42,000 as an example, REC estimates the cost of appointing the wrong person is more than three times their annual salary, once the impact on others’ performance and motivation is taken into consideration. 

This breaks down as illustrated below. The calculation assumes the individual leaves or is dismissed within the first eight months:

© Recruitment & Employment Confederation

Clearly, the more senior the role, the more expensive the potential impact becomes. And all the time you have the wrong person in the role, you’re missing the opportunity to get the ideal person on board.

Almost all organisations are affected
If you’re thinking this only affects a handful of organisations you’d be mistaken. REC’s research with HR professionals found that an astonishing 85 per cent of them said they had worked in organisations that had made bad hiring decisions. 

So how do you make sure you’re not one of that 85%? 

5 ways to reduce the likelihood of a bad hire

1.    Hire for attitude and cultural fit as much as competence 
Most technical skills can be learned or developed, but it’s harder to change people’s attitudes and behaviours. Yet it’s often these factors that result in a new appointee leaving prematurely. 

Diversity of thought and background is, of course, essential for an organisation to thrive. But if an individual cannot work within the widely-accepted norms and culture of your business they are unlikely to do well. For both parties’ sake, it’s important to make sure there is a cultural fit.

2.    Ensure all key stakeholders are involved in the decision
It’s important that anyone who will have a significant influence on the success of the appointee is involved in the hiring decision. The last thing you want is for a key internal customer to say that if they’d had the choice they’d never have appointed the individual given the choice.

This is not always easy, especially in geographically dispersed organisations, but try to get every key contact involved in the selection process. It’s also helpful for candidates to meet a number of potential team mates so they can make an informed decision if offered the role. 

3.    Use role specific Assessment activities as part of the recruitment process
Wherever possible relevant assessment activities should be built into the recruitment process. These would, of course, need to be tailored according to the level of the candidate/role.  So, at the more junior end of the scale tasks such as copywriting, prioritisation, responding to a brief, role related activities, or giving a presentation, are all good ways of getting a more in-depth view of a candidate’s abilities and skills.  Competency-based questions, review of candidate supplied case studies, and well thought through interview questions focussed on the challenges of the role, are all activities that will help ensure a good hiring decision is made.

4.    Don’t skimp on references 
References are too often seen as a formality, whereas they should be considered an essential element in any decision. In many cases, they are the only objective evidence that a candidate is able to deliver what they promise.

At Regan & Dean we dig even deeper into references if we, or our clients, have any areas of concern. Although some referees are reluctant to go into detail in a written reference these days, an informal chat can be very enlightening. 

5.    Consider the time between offer and start date – and beyond
Some employers breathe a sigh of relief when their ideal candidate accepts an offer and move on to the next item on the to do list. Big mistake! 

This period is a dangerous and critical time when the candidate is likely to receive tempting counter offers from their current employer. If they’ve been actively job seeking they may even continue to attend interviews to see what their options are. 

It’s important to keep in touch with news, updates and perhaps invitations to key events to build up their connection and loyalty to your team. A good recruitment firm will do a lot of this for you, making sure the individual feels positive, supported and excited about starting the new role. 

At Regan & Dean we continue this support into the probation period, helping our candidates make a success of their first few months as they settle into the role. It’s something we find both candidates and clients appreciate. 

We’re so confident in the support we offer candidates and clients, that we offer a rebate scheme if an appointment does not work out for whatever reason. It’s rarely, if ever, that we use it but it provides clients with that extra confidence. 

If you’d value an approach that maximises the chance of a hire that works, backed by a clear rebate scheme, please get in touch.