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The Costs of a Bad Hire

The Costs of a Bad Hire

The Costs of a Bad Hire

Your company loses more than time, money, and effort by recruiting, interviewing, orienting, and training people who shouldn't have been hired in the first place. You must also deal with all the other havoc that the "wrong" employee can create: the business you may lose when that employee interacts with customers, the costs you incur when you have to repeat procedures that were handled ineptly, and the pressures on other employees who must pick up the slack created by underperformers. And consider the expense and the hassle that arise when you have to cut your losses and dismiss an employee who shouldn't have been hired in the first place. In the long run, it's more difficult for the manager and team to accommodate a poor performer than it is to invest in recruiting quality candidates.

The biggest mistake you can make when you're in the market for new employees is to assume that you can rely on the same tried-and-true methods that you've been using for years. What's different today is, well, everything.

Consider the following factors:

A lot more is at stake today than in the past. Gone are the days when you could minimize the consequences of a bad hiring decision by "finding a place" for that newly hired person who isn't working out in the new job. The pace and pressure in today's workplace are too great. Everybody has to contribute. And to "contribute" means more than simply doing one's own job. It means having a measurable impact on a company's ability to compete. It means maintaining high quality standards, keeping customers happy, and keeping costs under control.

The qualifications for jobs that used to be considered "routine" have begun to escalate. With fewer layers of management in place in most companies, today's line employees must do their jobs with less supervision than in the past, and not every employee can flourish in this kind of environment.
Technology is having a huge impact as well. Because just about every task in business has to be done faster than ever, companies of every size are relying on technological advances to streamline day-to-day operating procedures. And few companies can afford to have employees who can't adjust to the new pace and growing demands.

Hiring: Think "Strategy"

Recruiting and hiring good employees is arguably the most critical of all the areas you're responsible for overseeing in your company. After all, if you're not hiring the right people to begin with, your ability to succeed in nearly everything else you do in your staffing practices will be greatly compromised. Hiring is no longer a simple matter of filling job openings. More than ever, successful hiring is a multidimensional process. It is rooted, above all, in your ability to understand your company's strategic needs. When you're helping other people in the company make a hiring decision (something you're going to be doing a lot of if you're the only person handling human resources in the company), you're probably going to have to change the way people view the hiring process.? You have to get them to see that in today's workplace, the idea isn't simply to find the "best person" for any given "job." The big challenge today is for you and the hiring managers in your organization to step back and take a long-term view of your specific business needs, and then determine the right combination of resources to help you meet those needs. In effect, you approach staffing from a proactive rather than a reactive perspective.

Building Competency Models

Whether you decide that internal promotions, full-time new hires, part-time workers, temporary project professionals, or a carefully thought-out combination of these roles will best meet your business needs, before you can seek out these individuals, you need to determine what qualities you want them to have. Many firms today are using a process called competency modeling to help target the characteristics that distinguish top performers. Companies can then use this information in the hiring process to seek and evaluate prospective employees.
Closely related to - and supportive of - the basic concept of strategic staffing, competency modeling is an increasingly important way to assess your true talent needs. Although this term may sound complicated, the concept itself is actually quite simple and understanding it has very useful implications for you. Competency modeling is merely a matter of determining, as accurately as you can, what particular mix of skills, attributes, and attitudes produce superior performance in those operational functions that have the most bearing on your company's competitive strength. This strategic recipe becomes the basis not only of your hiring decisions but also of your training and development strategies.
Suppose, for example, that your company is in the business of selling home security systems. One way that you market your service is to solicit potential customers by phone. The basic job of a telemarketer, of course, is to generate leads by calling people on the phone. Some telemarketers, however, are clearly much better at this task than others. They're better at engaging the interest of the people they call. They don't allow repeated rejections to wear down their spirits. In other words, they possess certain attributes that contribute to superior performance in this job. And these attributes (as opposed to the actual tasks of the job) are the basis of the competency model.? You can apply the concept of competency modeling to virtually any function in your company. The basic objective is always the same: To determine as precisely as you can what combination of skills and attributes are required to excel at that function. You may not always find the perfect match between the skills and attributes that dominate your competency model for a given function and the skills and attributes of the candidates you're considering for that job. But at least you have a frame of reference from which to work. You can now identify with greater precision any skill deficits - gaps between the requirements of the job and the qualifications of the candidate. And you can frequently close these gaps (assuming that they're not exceptionally wide) through training and coaching. Some consulting companies specialize in helping businesses develop competency models for key functions or positions. But you don't necessarily need an outside consultant to gain more insight into the types of skills and attributes that form the basis of your hiring criteria. The following suggestions can help you gain insights on your own:

  • Interview your own "top" performers:  Assuming that you have a group of people who perform the same job - and assuming that one or two of those people are clearly the "stars" of the group - sitting down with your key people to determine what makes them so successful at what they do is certainly worth your time.
  • Try to answer the following questions:
    What special skills, if any, do these star performers possess that the others don't?
    What type of personality traits do they share?
    What common attitudes and values do they bring to their jobs?
    A competency-model consultant would ask these very questions, so don't be shy as you're attempting to find the answers to these same questions. And don't worry about offending anyone or invading anyone's "space" either. Most are likely to find the fact that you're singling them out as exemplary performers quite flattering.

Talk to your customers

One of the best - and easiest - ways to find out which employees in your company can provide the basis for your competency modeling is to talk to people with whom your staff interact on a regular basis: your customers. Find out which employees your customers enjoy dealing with the most, and, more important, what those employees do to routinely win the affection of these customers.
 

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