The Unexpectedly High Cost of a Bad Hire
linkedin.com
linkedin.com
I think this dramatically understates the cost. What's the cost when 3 people quit because you hired a PM that threw them under the bus in front of a client? What's the cost when 2 women quit because they were sexually harassed? What's the cost when an employee defrauds a client?
The cost of a hiring mistake is not a fraction of a years compensation, it's many multiples of a years compensation. This is one reason many places let slightly sub-par people stay.
I now value ethics above all else in working relationships. Two ways I perhaps can quickly determine ethics: Watch how they interact with people in low status positions (food servers, gas attendants) versus how they interact with you. Also ask them about how they determine morality - if they give you a blank stare then perhaps take that into consideration.
When did someone who runs off co-workers or gets the company in legal trouble become the "average" bad hire? In fact, when did this become a common occurrence for recently-hired people? Everyone I know of in 11 years or professional experience who fits this category were long-time employees of the company before these issues arose.
Even the "average" bad hire costs a lot more than what the article suggests. $15K for a $50K job seems very low. What's the value of the "average" bad hire turning a client reference into an angry client? Or having them hire someone very bad for one of their positions? Or undermining company morale?
There's a middle that is fairly tight in ability, and they perform good or bad largely dependent on the circumstances system (including management) that they're put in. The upside and downside surprises can go very far on both sides of the mean. Which means slightly bad hires tend to be products of a bad system, which is what should be fixed. But very bad hires can do an inordinate amount of damage even relative to their small probability. P(x) * Value(x) comes out to a very large negative #. (Similarly P(x) * Value(x) comes out to a very high absolute # for the great hires)
Now what's the probability of a truly awful hire? Depends on how well you hire. I suspect it's somewhere between 1% and 10% based on the organization. Same on the upside.
Now then, we get into solutions and suddenly things start getting fluffy. "... find an expert in the candidate’s specific field and get some advice on the best questions to ask." Fluff. This is opinion piggybacking on fact.
There's a huge body of research that could tell you how to hire better people. If you've read any of it, you'll know that unstructured interviews are not the way to go! You're essentially testing a person's ability to perform in an interview rather than their ability to do the job.
I'm continually shocked that businesses who rely on their employees for every penny of revenue have no idea how to hire the best employees. Everyone thinks they have some sort of sixth sense gut feeling that can guide them to the right people. Some of the research in this field is very good, and it could be better if business owners and managers paid it any mind.
I mentioned specifically the oft-used unstructured interview. Here are some links for that point:
>Meta-analysis: " structured interviews produced mean validity coefficients twice as high as unstructured interviews" http://onlinelibrary.wiley.com/doi/10.1111/j.2044-8325.1988....
>Meta-analysis: All interview validity estimated at .19, but structured interviews estimated at .39: http://onlinelibrary.wiley.com/doi/10.1111/j.2044-8325.1989....
Outside of boring journals and texts that you might not have access to, we can always just Google Scholar for things like "employment selection instrument": http://scholar.google.com/scholar?q=employment+selection+ins...
Highly recommended. Covers some subsets of structured interviewing as well as effective techniques for the rest of the hiring process.
>So if you’re hiring for an IT role, find and talk to an IT person about what makes a good team member.
Not sure why that's relevant. People can be good team members without really thinking about what makes a good team member (and vice versa).
>Savvy HR departments are already looking through candidates’ Facebook and LinkedIn profiles. I recommend going as far as checking a candidate’s Twitter feed to gain insight.
That's illegal in most of Europe. It's pretty dangerous to check somebody's personal social media feeds. The interviewer will probably be affected by the candidates politicial or ideological positions (possibly subconsciously).
>People tend to be the most alert and thoughtful during this initial stage of the job application process.
And some people submit a lot of job applications and don't have time to pay perfect attention during that process (even if they are alert and thoughtful on the job).
Or
Does it mean an entry level dev/intern who is just learning the ropes and might commit a few mistakes out of genuine incompetence/inexperience rather than malice.
I see most hiring managers, HRs and what have you intimidate potential entry-level interviewees that if they weren't upto and in some cases over the company standard they'd end up costing the company a lot.
Generally speaking though, in places I've worked, simply being not up to snuff is not in and of itself evidence of a bad hire.
If you're not competent, cannot learn quickly, or are unwilling to train and learn, then you may be a bad hire.
The "entry level dev/intern" really depends on a lot of factors. If it is truly and entry level position, then you should expect mistakes to be committed and you should be paying them less and have some infrastructure to handle the mistakes and training. If they learn, they get more pay. If they cannot learn, then they get canned. You're taking a chance when you advertise that position and should price the job accordingly.
I'm curious what about the tweet thing turned this guy off.
None of these things have anything to do with capability to do a job.
Sure, bad hires can be costly, but this article's advice is terrible and the author comes across as a crazed tyrant.
I love a beer in my time, and I would be happy to enjoy a beer with my coworkers in our time, but I find it hard to believe that somebody who shows up drunk to an interview (even a phone interview) is a "good hire".
I guess it's good to know that Hootsuite considers consuming alcohol during non-working hours - while attending a conference intended to improve one's social media skills - to be a firing offense. They should probably include that in their job ads to make sure "bad" candidates don't apply.
On the other hand, if you're looking to work at an employer that doesn't mind how much alcohol is in your bloodstream while at the office, it might be a good way to filter out places you don't want to work at.
Either don't schedule a phone interview after an event where you will be drinking, or don't drink at the event. That doesn't seem so hard.
>Either don't schedule a phone interview
Perhaps he didn't have the option.
>or don't drink at the event.
As others have said, networking opportunities may have presented themselves. Who are you to judge his situation with absolutely no information? Judge him on how well he conducted the phone interview. That's all that matters at this stage.
What I see are people who are obsessed with irrelevant information when it comes to hiring. Its modern-day tea-leave-reading and it has no place in what should be a rational business decision.
To some extent I'm playing devil's advocate, but you did ask for possible circumstances. I suppose in the employer's shoes I'd pretend I hadn't read the Twitter post and go ahead and carry out the interview. If he aces it, great. If he muffs it, I wouldn't make allowances for him being drunk, because he would have demonstrated showing up drunk was lousy judgment on his part.
The tweet wasn't "I got so drunk last night, yo!" it's "I'm going into this thing drunk".
Ehh. I like to keep my personal life separate from my professional life. The way I conduct myself with friends is not how I interact with coworkers.
An employer who insists Facebook and Twitter are among the best indicators of compatibility around the office should probably review how well they actually work with others.
This article seems to promote risk aversion (and HR consulting services) without providing usable insight.
Although the goal is to maximize such hires, due to the broken(both ways) nature of the hiring process, the company ends up hiring many employees who turn out to be average, and some even go on to become the subject of this article- mediocre.
More importantly, following this line of thinking, the cost incurred due to a manager causing the top talents to leave the company is much more(esp. compounded cost), than the cost of hiring a bad employee.
"How do you find your “cream of the cream”? What are your unique or tried-and-tested hiring strategies?"
Am I the only one who was thinking "How do you expect to hire the “cream of the cream” if you only pay $50K a year?"