It’s all too easy to make a bad hiring decision. A candidate may seem perfect on paper and impress during the interview, but once they start the job, it can be a different story. Unfortunately, making the wrong choice when hiring a new employee can impact your finances significantly. By using the tips in this guide, you can reduce the risk of hiring the wrong person.

How Much Does a Bad Hire Cost?

Research by CareerBuilder shows that the average cost of hiring the wrong employee is $17,000. In a study from Northwestern University in Chicago, statistics show that a bad hire can cost a business $15,000 on average. These costs can increase significantly for higher-level positions.

These expenses are linked to onboarding and training, lost productivity, workflow disruption, and employee turnover. The costs aren’t just about salaries but also include the time and effort it takes your team to manage the aftermath of a bad hire and find a suitable replacement.

Read on to learn more about the steps you can take to avoid a bad hire.

How to Avoid Bad Hires

Traditional hiring methods typically involve candidates applying based on a vague job description, followed by several interviews before candidate selection. However, what seems like the right fit can quickly turn into a hiring error. Ben Sealey, CEO of Talent Right, suggests that reducing subjectivity in the hiring process is the solution:

A recent study from CareerBuilder found that nearly 60 percent of bad hires occur because the employee couldn’t produce the level of work required by the employer. Understanding the required skills from the beginning is crucial to avoiding a hiring disaster. Ben Sealey offers the following advice for those rethinking their hiring process to focus on demonstrable abilities and objective measurements of candidates.

1. Develop and Articulate Two Sets of Skills: Prerequisite and Trained

Prerequisite skills are those a candidate should demonstrate during the interview. These are essential for the job, and new employees will not be trained in them. They can range from general skills, like prior newsroom experience, to specific skills, like expertise in an audio engineering software program. Trained skills are those that will be learned on the job, where some prior proficiency is desirable but not necessarily required.

2. Reduce the Chatter in Interviews

Focus interviews on asking candidates to demonstrate their prerequisite skills rather than asking open-ended questions that provide little insight. For example, “What experience do you have coding in this language?” is more informative than “What do you do when conflicts arise at work?” Once the skills have been demonstrated, you can ask additional questions, but there’s no point in asking them to someone who cannot demonstrate the ability to do the work.

3. Make Subjective Soft Skills Objective

Qualities like “cultural fit” and “team player” are somewhat subjective; every company defines “team player” slightly differently. Ben Sealey recommends breaking these soft skills down into their components. Clearly define what you look for in a team player or in a cultural fit, make these qualities concrete, and then assess whether these traits are present in your candidate. Ask interview questions that help you identify these components in your candidates.

4. Narrow the List with Job Requirements

Having candidates narrow down your list for you is key. Clearly post the job’s requirements, such as “willing to work weekends” or “willing to travel.” Another good option, if applicable, is “willing to work nights.” Potential candidates who are unwilling to meet these requirements will not proceed to the interview stage, saving you time and money and reducing the risk of making a wrong hire.

5. Figure Out What Went Wrong Last Time

Chances are you’ve made a bad hire before. The mistakes you made then can inform your current selection process. If the bad hire lacked key skills for success, ask objective questions about those aspects of the job. If the bad hire worked too slowly to meet your output needs, ask all your candidates how long certain key tasks take them. Compare your candidates based on these criteria to find a good new hire.

6. Ask for References and Be Sure to Contact Them

A job candidate can impress you with their skills in an interview but fail to perform once they join your team. Avoid this disaster by checking references. These checks can reveal the truth behind a candidate’s story. References will often provide candid feedback, knowing you won’t share their comments with the candidate.

7. Don’t Rush Your Hiring Process   

Being deliberate when filling an open position is a great way to avoid the cost of a bad hire. Your team might be stretched thin with one fewer employee, but a bad hire won’t solve that problem. While a quick hire may temporarily alleviate some pressure, it can ultimately put you back at square one. Take your time and avoid a costly bad hire.

8. Be Subjective Only If You’re Stuck

Ben Sealey advises that at this point you should have all the information you need to decide. If two candidates are tied after you’ve assessed their skills, coachability, soft skills, and job requirements, subjectivity can still play a role:

Improve Recruiting and Hiring Processes to Avoid Bad Hires

If you’re concerned about hiring the wrong person, start by examining your recruiting and hiring processes. If there is too much subjectivity in your current process, revise it to include more objective measures of what a successful candidate looks like. This approach gives hiring managers the tools they need to find the right people without making subjective judgments. Taking these steps can save you significant time, money, and frustration.