How Much is a Bad Hire Costing You?

The Real Cost of a Bad Hire

When a business owner comes to us with complaints about the performance of a team member, it’s usually a linear thought process: “I have these items on the job description; I’m paying $X per hour to get them done; and they’re not getting done.” Absolutely, that’s the immediate cost to you. And, it only scratches the surface of the real cost of a bad hire.

Mistakes Are Money

Depending on the responsibilities of this particular team member, repeated mistakes could actually be costing you out-of-your-pocket money! We ALL make mistakes; we’re human. And frankly, when we make mistakes, we have opportunities to review the process, learn from the mistakes, make adjustments, and go forward with new clarity.

However, a bad hire typically isn’t learning from those mistakes, and hence is prone to repeat them. That could mean the loss of a contract worth thousands to the company. If it happens multiple times, it’s a cost you can’t continue to carry.

Lost Productivity

When mistakes are made, time is spent to rectify the situation. Other team members are likely pulled in to correct the problem. So now you’re paying multiple people to do one job. When the bad hire repeats the mistake, the effect is multiplied. In addition, though, if fellow team members are losing confidence in that bad hire’s ability to deliver, they may hang on to items they formerly delegated and “just take care of it themselves.” So now you have multiple team members not operating at their optimal level of productivity.

Your Mental Health

Few people consider the cost, as a leader, to keeping a bad hire on the team. So let me ask you a few questions:

• Do you dread going into the office, or even avoid going in, so you don’t have to interact with this team member?
• Are you absorbed with thoughts of what to do about this team member when you’re supposed to be unplugging and enjoying your life?
• Do you find you have little patience when you’re interacting with this person?
• Are you expecting the next mistake, and therefore even looking for the person to screw up again?
• All these questions lead to the same place – you are draining your energy, exhausting your mind, and leaving less of you for the people in your life who matter most, including yourself. At what cost?

With any team member, our focus is on their continual growth and improvement, and we certainly encourage you to be in that space.

Go back and read last month’s article reviewing Are You The NEW One Minute Manager? for tips on that! If, however, you start to see the cost of keeping a particular team member is outweighing the benefit of keeping him or her, have the courage to make the tough decision and let that person go. Chances are, he or she is as miserable as you are (or more so)!

Our book, Snapshot Business Planning goes into detail on steps to take to give your team members their best possible chance to succeed, and what we call “the gift to go” if it’s clear that person is not working out.