Thursday, August 6, 2009

The Cost of Mis-hiring

The cost of hiring could be the most frequently discussed issue in human resource consulting, attempting to place time and monetary figures on internal resources versus external recruiting costs.  With out a quality control process in candidate selection, it can be even costlier.  An issue that is seldom addressed is the cost of a mis-hire.  C-level leadership can agree that, not only attracting and hiring top quality candidates is crucial to strategic business goals, but retaining that talent is as critical and can be the greatest challenge in a hiring decision, however, less quantifiable.  Sometimes too personal or painful to study, the cost of mis-hires is often avoided, even in executive management turnover it can be viewed as a cost of doing business.

The number of hours per year wasted (for you and others) because a C player was hired rather than an A player:

0 - 25 hours 2%
26 - 99 hours 18%
100 - 199 hours 27%
200 - 399 hours 25%
More than 400 hours 28%
Total 100%

Five hundred seven people responded. Since the median response was at the high end of the 100-199 hours wasted category, it seems that the average mis-hire can cause us to waste at least 150 hours.  (

Today’s larger pool of candidates only tempts the situation further. Leadership and search committees can agree on the core competencies of a position, but when it comes time to place a value on the resources necessary to complete a search, there can be conjecture; an organization’s size can dictate expediency.  With economic factors leading to greater active candidates, both in access and drive, quality control in the candidate selection process is of the highest importance.

Employing a solid quality control process in candidate selection will reduce mis-hires.  Through chronological interviewing and reference checks, employers can eliminate many of the costly hiring mistakes that lead to turnover and candidate search re-starts, bring competency, culture and candidate together in accord.

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