This Is What You Get When You Ignore 'Quality Of Hire' On average, a new hire costs a company $4,000. The cost is far higher when the employee doesn't work out.
By Andre Lavoie Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
It's your worst nightmare as an employer: You find a candidate who checks every box on your employee wish list. You hire him (or her). And then he or she ends up being a terrible employee.
Related: What You Need to Do to Hire and Retain Top Performers
Bad hires are costly. A 2015 report from Bersin by Deloitte found that, on average, a new hire costs approximately $4,000. And that doesn't even include the negative impact on sales, team morale, customer service and productivity that poor hiring choices have on organizations.
That's why it's time -- given today's emphasis on data -- to start measuring and analyzing "quality of hire." The hiring process isn't perfect, and there's no way to improve it unless we incorporate metrics to track the factors that differentiate a good from a bad hire.
Here are three (fictional) scenarios illustrating types of bad hires who -- unless we start using quality-of-hire metrics to analyze our hiring process -- will continue to receive job offers.
1. Disappointed Dianne
To be honest, Dianne seems a little overqualified for the position, but she's so excited about the company and its mission that she seems like the perfect candidate.
Then, after about a month on the job, she changes; that fire is gone. Turns out that the position and the company aren't what she was expecting.
How quality of hire metrics fixes the problem: Clearly, in the case of Disappointed Dianne, there has been a disconnect between how she envisioned the job she applied for, and reality. Maybe the problem was an outdated job description or unclear employer branding, but for some reason the employee and the employer are not on the same page.
She's not alone. A 2014 Bamboo survey of more than 1,000 employees found that 26 percent of respondents who had left a job soon after being hired did so because the job turned out to be different from what they expected.
Possible solutions: During and after the onboarding process, be sure to check in with new employees to assess how things are going. Ask if things are what they imagined they'd be. If there are discrepancies, identify where and why there is confusion. This will eliminate surprises for future new hires and the organization.
2. Bare-minimum Bobby
Bare-minimum Bobby has been with the company for a while now. However, he's not showing signs of improvement. He's not under-performing exactly, but his work is uninspired. And while no one in the office has anything bad to say about Bobby, he hasn't integrated with the team.
Bare-minimum Bobby isn't a terrible employee, but he feels no long-term loyalty to the company.
How quality of hire metrics fixes the problem: Probably the biggest issue with Bobby is that he's not a great cultural fit. A 2014 TinyPulse survey of more than 200,000 employees found that peers were the number one reason these people went above and beyond in their respective offices. So, hiring an employee who doesn't fit in with the team can leave him or her feeling unmotivated.
Possible solutions: It's important for all hiring managers to know what their company culture is and how to recognize a good fit. If poor hires are continually not working out for that reason, take the time to reevaluate the company's cultural-fit criteria.
Related: 7 Interview Questions That Determine Emotional Intelligence
3. Misleading Molly
During the interview process, Misleading Molly has all the right answers. She's clearly done her homework on the open position and the organization. So, she gets the job. Then she starts working, and it becomes evident that she's exaggerated her skills as well as her enthusiasm for the company's mission statement.
Everything she does requires a lot of time, support from coworkers and multiple revisions. Molly, it turns out, is negatively impacting the team's productivity.
How quality of hire metrics fixes the problem: Although Misleading Molly's resume and past experience made her seem like a good skills fit, her actual performance proves she isn't. Now, the company is left with a hard choice: Invest more time and training in Molly in the hopes that she'll catch up, or let her go and head back to the hiring drawing board.
Possible solutions: Embellishments and even lies are common during the hiring process. It's up to the company to ensure that hiring managers can recognize them, in order to keep from hiring unqualified candidates. Look for patterns in who hires whom and how those employees turn out. It might even be necessary to incorporate a skills assessment during the interview process, to get an accurate idea of each candidate's qualifications.
The hiring process isn't about gambling on whether or not a new employee will work out. By measuring and tracking quality of hire, employers can clearly see what they are doing well and where they need to improve. Incorporating these metrics into the onboarding and performance-review process allows organizations to fine tune their recruiting and hiring process.
What other types of bad hires could be avoided using quality of hire metrics? Share in the comments below!
Related: To Avoid Hiring a Toxic Employee, Look for These 6 Qualities (Infographic)
