While every company strives to find suitable candidates with a success-driven attitude, doing so continues to be a haunting challenge. Although finding the right match is possible, making the wrong call from time to time is more than likely to happen. Those wrong calls are known as “mis-hires”.
In other words, a mis-hire occurs when we select an applicant we deem suitable, and over time, we (or they!) realise they aren’t as good of a fit as anticipated. The reasons could be anything – lack of skills, a bad cultural fit, or a personality miss-match. However, the final result is always the same – termination of a contract. While one would like to think that such occurrences are rare, it couldn’t be farther from the truth.
How many hires are failed?
The first three months of a job are the most important (hence, they’re usually a trial period). They mark a new beginning of an employee finding out how well they fit on the position and within the company overall. Nobody expects it to be the beginning of the end, though.
However, as research shows, 28% of new hires quit within those first 90 days of employment. The findings of a McKinsey report further amplify the point. In the survey of 5,774 people of working age from countries such as the U.S., Australia, or Canada, 40% said they were “somewhat likely” to quit in the next three to six months – and six out of ten would do so even without having another job lined up.
The numbers look similarly grim in Europe. As of December 2021, 33% of recruitment attempts in Denmark were unsuccessful – the highest number since 2007. In Belgium, overall, slightly over 30% of permanent contracts are terminated – although within the first year – either by the employer or employee.
While turnover at a healthy rate can be beneficial (after all, there’s no point keeping an employee who fails to perform or doesn’t want to stay), tracking your mis-hire rate is of the essence. Yet, as estimated by Dr John Sullivan, fewer than 10% of corporate functions measure that rate systematically. If you believe that failed hires don’t affect your bottom line, let’s take a closer look at some numbers.
Money down the drain
According to the Recruitment & Employment Confederation (REC) report, while 85% of the surveyed HR decision-makers admit to having made a bad hire, 33% also believe that such mistakes don’t cost their business anything.
In reality, those costs are estimated at around 30% of the employee’s yearly salary. Based on the CareerBuilder research, three-quarters of companies reported an average loss of $14,900 per bad hire in the year prior.
The costs include not only remuneration but also training and inevitable double-recruitment. Let alone the expenses caused by a potential “turnover contagion”, i.e. other employees quitting if they start seeing you as a sinking ship.
However, money is not the only thing you’re losing. In a study by Robert Half International, 34% of CFOs explained that mis-hires impact overall productivity.
Productivity drops alongside your money
Falling in a trap of mis-hires has more pitfalls than monetary expenses. In a Harris Poll study, managers revealed their observations about the influence poor hires have on company performance.
Over three in ten of the interviewed stated that performance levels in their companies dropped, and 31% of them noticed a negative influence on staff morale. That aligns with the numbers provided by naturalhr and their breakdown of productivity loss in various countries:
- USA: 36%
- Italy: 31%
- UK: 23%
- Germany: 25%
The explanation for that can be fairly simple. Sometimes it’s you who realises your hire was the wrong call. Other times, employees themselves feel when they aren’t in the right place and in the right position, which affects their motivation. Perhaps even before you notice it. ThriveMap highlights this occurrence in their survey.
Workers who thought themselves the right fit for the job and the company’s culture rated their productivity at 7.2 out of ten. While those who felt they were a poor fit rated their productivity at 5.2, two points lower.
Minimise the chances
You may have seen the famous quote by Red Adair, “If you think it’s expensive to hire a professional, wait until you hire an amateur”. While it’s nearly inevitable that it does happen, we say – minimise the chances. Act beforehand to assure your mis-hires never reach the percentages above.
1. Improve retention with effective onboarding
First impressions matter, and you only have a short time to make a meaningful impact on new hires. Hence why it’s so important for companies to offer a well-structured onboarding process from day one. Yet, according to a Gallup survey, 88% of employees think that their employers don’t do a “great” job when onboarding new workers.
A well-executed onboarding not only guides your new hires in terms of tasks they’re expected to perform and integrates them into your corporate culture. Following Brandon Hall Group, this also improves retention by 82%.
Conversely, those employees who have a negative onboarding experience are two times more likely to search for new opportunities in the near future. Getting the onboarding right can therefore be your difference between retaining your new hires or losing them – sometimes quicker than you’d expect. As pointed out by The Wynhurst Group, new hires who experienced a structured onboarding programme are 58% more likely to stay with the company for more than three years.
More than paperwork
Starting a job in a new place is always stressful – no matter the experience level. Your new hires are thrown into an unknown place, and to fully integrate – both with your company’s culture and the people – they need more than a list of tasks they’ll be doing. Sadly, 58% of companies admit that their onboarding focuses on paperwork and processes. Hence, no wonder that only 12% of employees think their company provides them with a great onboarding programme.
According to Madelaine Tarquinio from The Aberdeen Group, onboarding should include forms of management, task management, and socialisation in the company culture. Only combining these three elements will help you achieve optimal ROI from the onboarding process.
As she further mentions, socialisation remains one element that tends to be overlooked. 90% of best-in-class companies incorporate it into their process compared to 75% of laggards.
New hires who are most likely to stay with you are those who are happy in their workplace and sense the possibility of professional development. As stated by Sapling, workers who can say their onboarding experience was exceptional are 2.6 times more likely to be satisfied with their new workplace. In fact, 70% of them stated to have “the best possible job”. What makes onboarding exceptional, then?
Onboarding should start before your new hire walks in on day one
Your newly hired employee will think about the job long before day one, and so should you, as pointed by Josh Abbott.
Sometimes the period between signing the contract and starting the job can take weeks or even months. Hence, the worst you can do is leave your new hire hanging. Use that time to prepare them beforehand and make the transition easier. Using available tools such as one-pages, presentations, or even interactive tests is a great way.
- Introduce all the relevant policies so they don’t feel stressed about all the critical information when they need to start working.
- Present your company, what you do precisely, your vision and mission, with all the important contact information – be on the same page.
- Introduce the gist of the products or services you offer to make sure they know exactly what your brand is about.
- Clearly inform about the company culture. Do you offer lunches? When can one take a break? Do you have a dress code? Any office perks (free coffee or fruit)? Make your employees included and prepared to walk into the office.
- Introduce all the people in the company, with their titles and contact information and a few words about them.
- Always assign the guide – the person they’ll report to and can turn to in case of any questions to make your new employee feel comfortable and cared for.
Effecting onboarding should be like taking someone’s hand and walking them through the most stressful part of the way assisted. Let your new hires take time and assimilate with your team and culture while settling into their role. Leaving them lost to figure things out on their own will send a negative signal from the beginning and may very well be an early signal for seeing no future with you.
2. Skills matter. But what about the attitude?
In times of labour shortages, 75% of recruiters believe that the skill shortage is their greatest difficulty when recruiting. And even though almost 30% of new hires turn out failed within the first three months, the issue may be laying elsewhere.
Leadership IQ conducted a study of 5,247 hiring managers to determine why new hires failed. As it turns out, 89% of them failed not because they lacked technical skills but rather the lack of “candidate fit”. That is, they didn’t possess the right soft skills such as coachability, emotional intelligence, temperament, and motivation needed to fit with their new colleagues, bosses, or the company altogether.
Technical skills can be developed through training, but one’s attitude cannot. As said by Mark Murphy, CEO of Leadership IQ, attitude is the top predictor of a new hire’s success (or failure), as it’s more difficult to evaluate than skills. The observation seems to be further strengthened by the fact that 56% of HR executives surveyed in the mentioned study said that 50% or fewer of their employees had the right attitudes.
Create a profile of the person you’d want in your team
Just like creating personas of your target audience, create a persona of who your ideal employee should be like. Or, as Jay Hyman from Forbes calls it – picture the perfect DNA match.
Aside from looking for someone with specific technical skills, create a profile of personality traits you consider desirable for the position. Look at your top performers who embody everything you want your company to be. Analyse the qualities they have as well as what drives them to success.
Are they good at communication? Possess high emotional intelligence (one of the most important soft skills to seek in 2022)? Or maybe they always take the initiative and inspire others? Pinpoint five qualities they all share and use them as a starting blueprint when evaluating your next hire. Spoiler alert – you may need to adjust your interviewing style to do so.
Behavioural questions – A.K.A get the answers you need to hear, not those you want
One of the issues with most interviews nowadays is how predictable they’ve become. It takes a quick Google search to find many videos and blog posts about “the most commonly asked interview questions”.
Everyone wants to do their best when trying to land a job; hence they prepare beforehand. What happens, in turn, is that many interview scenarios end up scripted and superficial. A candidate simply says what you want to hear, but are the answers really what you need to hear?
Instead of asking vague questions or – even worse – the questions that could be answered by reading a resumé, opt for behavioural questions that provide real insight into one’s attitude.
Steer clear from any “yes” or “no” questions. Instead, opt for those calling for descriptive answers. For instance, if you want to know if your candidate can work well under pressure, ask about a time they found themselves in a stressful situation and how they dealt with it. That will give you intel into what they consider “pressure” to begin with and what decisions they made, and what strategies they found suitable.
Predict, not assume
Interviews in general, however, pose another issue. As stated by the previously mentioned Dr Sullivan, as much as 75% of hiring decisions involve a gut feeling rather than hard data. Hence, to test how well a candidate hits your created DNA profile, you may want to opt for methods that predict future job performance more accurately – such as GMA (general mental ability) tests.
GMAs make use of questions assessing an applicant’s abilities to learn quickly, reason, think logically, and even test an individual’s potential to cope with job-related challenges. Moreover, they prove to be one of the best ways of predicting one’s future job performance – especially when combined with work samples.
It’s vital to remember that, as proved by the data, sometimes hard skills are not enough to assure a good hire. Being an excellent performer takes more than merely having the skills to do one’s tasks. More emphasis needs to be put on evaluating if your candidate will integrate well with your organisation as a person.
3. False expectations – make sure your candidate knows what they’re saying “yes” to
It turns out that many of your new hires end up being mis-hires before they even step into the office. And the reason for it may not even be that they can’t imagine integrating well with your organisation, but they simply had a different vision of what the job was.
According to the study quoted by Psychology Today, 43% of employees state that they quit their jobs shortly after being hired because their role wasn’t what they had been led to believe it would be.
Whether your job description isn’t accurate, or you fail to present the day-to-day tasks accurately – some of the new hires will feel fooled or disappointed and will likely walk away, affecting your turnover.
Creating an accurate job description and openly presenting the day-to-day tasks in the first place is of the essence. However, what works even better is using the previously mentioned work samples.
Don’t talk about the job; show it. Provide your candidates with an example of their tasks (i.e., a work sample), so they can get a taste of what they’ll be really doing. This way, you’ll minimise any possible misconceptions about the job they may have and their likelihood of turning into a mis-hire once the job starts.
Avoiding mis-hires caused by potential false expectations is what employers could and should avoid. Luckily, it can be done with an honest and open recruitment process making use of the methods mentioned. Be on the same page from the get-go to avoid parting ways way too soon.
Don’t let your business be a machine with loose cogs
A hire that doesn’t work out, in the end, is a loose cog in a highly efficient machine you want your business to be. Not only does it drain your money, but it also affects all the other parts of the organisation around it – your other employees.
Investing time, money, and other efforts into selecting and training a new hire are not something you want to see go to waste; regardless of whether it’s within a week, month, or longer. Luckily, there are ways of improving your hiring process to minimise the chances of seeing your employees walk away. Remember that to capture the right talents, you need to know whom you want and how to fulfil their needs.