Avoid Mis-Hiring: Top 5 Tips for a More Effective People Strategy

Want to make sure your next hire is the right one? Check out these five tips for a more effective people strategy!

A man loses his job, packing up his desk due to a mis-hire.

A staggering 95% of companies admit to making bad hires every year and the costs associated with this can be huge. The U.S. Department of Labor reported that the price of a bad hire is at least 30% of that employee’s first-year salary. The cost of recruiting, hiring and onboarding a new employee has also been estimated to be as high as $240,000.

Along with the direct costs of recruiting and training a mishire, and then recruiting and training their replacement, there are other indirect costs associated with mishiring that can arguably cost the company far more. A ‘bad hire’ can also lower morale and engagement within the company, either because they are disengaged or because they are unwilling or unable to complete their tasks meaning that other members of the team feel they have to work harder to pick up the slack.

There will also be costs associated with a loss of productivity, either because the bad hire is not capable of performing at the level needed or not willing to. This productivity decline may spread to other members of the organization, or it may result in others working harder to compensate for the loss which, at unsustainable levels, will eventually lead to burnout.

So clearly given the above, mishiring is something that all organizations should be aiming to avoid, but what steps can organizations actually take?

1: Standardize your interviewing process

Photo by Cytonn Photography / Unsplash

Evidence suggests that companies without a standardized interviewing process are up to five times more likely to mishire than those that have one. Implementing a standardized interviewing process ensures that those involved in the hiring process have all of the tools they need to recruit the best candidates. Having structured interview questions and assessment criteria that are consistent across all candidates applying for a specific role also means that it is easy to compare candidate performance and ensure that the highest performing candidate is selected.

Having a standardized interviewing process also provides all candidates with the same opportunity to demonstrate their skills and experience. You may wish to create a bank of questions interviewers can choose from with certain questions, such as those relating to the company’s core values and behaviours, being standard across all roles. Alternatively, ensure that your hiring managers are confident writing role-specific behavioural and situational questions during interviews. These will give you good insight into how a candidate behaves and whether they will be a cultural fit.

2: Train your managers in hiring skills

Teamwork makes the dream work.
Photo by Dylan Gillis / Unsplash

It’s not enough to just create a hiring or interviewing process, you need to ensure that all of your hiring managers are equipped with the skills they need to recruit effectively. Make sure that all hiring managers are trained on the interviewing process as well as key skills such as how to write an exciting and accurate job description and person specification, as well as soft skills such as communication and guiding a conversation.

Hiring managers should also receive regular unconscious bias training to ensure that diversity and inclusion are being considered at all stages of the hiring process.

3: Skills based recruitment

Am I Good Enough?
Photo by Hello I'm Nik / Unsplash

Try to focus on skills during the recruitment process where possible, rather than formal qualifications or degrees. This can not only widen your talent pool in a tight labor market, but can also help build a more diverse, inclusive workforce.

As part of this, consider implementing a short task into your hiring process, especially for any technical roles. This task should be something that the chosen candidate will be doing in their day-to-day role, and not just a task for the sake of it. Adding a short reflection into the task or into the interview following the task will also give you an opportunity to gain insight into how the candidate works and how they approach things.

4: Learn from your current employees

together now
Photo by John Schnobrich / Unsplash

Your current employees are one of your biggest assets. Use the knowledge from within your current team in your hiring process as they have valuable insight into the company culture and the role dimensions, skills and tasks. This may involve having employees already in the role setting and scoring the tasks as part of the skills based recruitment.

You can also utilise your employee’s external networks by considering building a referral scheme into your hiring strategy. This will incentivise the existing talent in your company to refer people they know will be a good cultural fit for the company for any future vacancies. However, be wary to only use this technique in conjunction with other recruitment methods to ensure that you are still getting a diverse pool of applicants.

5: Onboard effectively and set clear expectations from the off

Photo by Clayton Cardinalli / Unsplash

Ultimately, new hires will always be set-up to fail if there is not an effective onboarding process in place and clear expectations are not set. Research by Glassdoor also found that organizations with a strong onboarding process improved new hire retention by 82 percent and productivity by over 70 percent. With up to 20% of staff turnover effectively occurring within the first 45 days of employment, a standardized onboarding process is essential.

At Virti, we use our own platform to onboard all new employees and track their progress and performance. This has enabled us to reduce the ramp time for new employees from 3 months to just 3-weeks!

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Early in the onboarding process clear expectations should also be set to ensure that all new hires understand what they need to do to succeed. This may be working with them to set KPIs, targets, goals, or however your company measures performance - at Virti we developed our own VOS2 which helps all employees understand their vision, values, objectives, obstacles, strategies, and specific metrics and how these fit into the overall company mission. Regular reviews and 1:1s will help new hires understand if they are on track and will mean any obstacles are dealt with early.

Every organization will no-doubt mishire at some point, however by investing in strong recruitment and onboarding processes you can reduce the likelihood of this!

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