Up to 95% of companies admitted to making a bad hire in the past year, and 74% of HR officials confessed to making a bad hire.

While companies would not like to admit it, bad hires occur often and are made by most human resources (HR) officials. 

In a Brandon Hall Group research report, it was found that 95% of companies admitted to making a bad hire in the past year, and 74% of HR officials confessed to making a bad hire. 

Another study found that 46% of all hires are considered to be failures by the time they reach the 18-month mark, and one in five hires are considered to be a bad hire.

Why do bad hires occur? 

Lack of a standardised hiring process 

Research from company-review platform Glassdoor found that a lack of standardised interviewing processes was one of the main reasons behind why companies make bad hires. 

It found that companies who fail to introduce standardised hiring practices were as much as five times more likely to experience bad hires compared to those who did. 

Pre-hiring practices, such as setting up a predetermined list of questions, allocating time to every question, and limiting biased questions from interview panels were found to lead to better hiring outcomes. 

Poor briefing of the HR department, or recruitment agency 

As many companies heavily rely on their HR department, or recruitment agencies to find and interview candidates, it is important to provide them with a clear brief of the preferred candidate. 

Companies and managers who do not spend time writing a clear job specification, with clear technical and behavioural requirements, are more likely to end up making a bad hire. 

Ensure that a brief to your HR department or recruitment agency includes the detailed job description, a good overview of the organisation or teamwork and culture, and the behavioural skills necessary in the role that might not have been mentioned in the job description.

Prioritising technical expertise over cultural fit and attitude 

Fast Company found that companies continue to make bad hires as they value technical skills over soft skills or the cultural fit and attitude of the candidate. This is especially true in organisations heavily focused on the bottom line. 

While a skilled candidate can help to complete tasks, they might place a drag on company culture, or contribute to poor motivation in teams - ultimately leading to poorer productivity. 

This may also contribute to high employee turnover in companies which will further cost companies in terms of time, and money to replace the employee. 

What is the cost of a bad hire? 

In one study, companies said they would spend as much as one-quarter of an employee’s annual salary to get rid of a bad hire and to replace them.

This is because a bad hire does not only cost companies thousands in terms of hours of productivity lost, but they also contribute to an overall negative culture within an organisation. 

Furthermore, money is wasted on bad hire costs in terms of job advertising, and it also costs money in terms of the time spent making a hire and the cost involved in upskilling a new employee. 

Companies are therefore incentivised to improve their hiring process to ensure that they will hire the best possible people and to reduce the possibility of bad hires occurring. 

How to avoid bad hires? 

Standardised interviews and clear job specifications can go a long way in helping a company to avoid making a bad hire. 

Wamly founder Francois de Wet says a quick solution to avoid making a bad hire is to introduce one-way video interview software into the hiring process.

“Wamly not only saves companies time during the recruitment process but also reduces the possibility of a bad hire by standardising the recruitment process,” De Wet says. 

Visit wamly.io/careers24 to signup for a free account or more info.