A bad hire is not a simple mistake for a company. Here's why companies make the mistake and what it costs them.
According to a new survey from Sologig.com, CareerBuilder's career site for contract workers and technology professionals, 70 percent of IT companies report having hired a tech employee who didn't work out; of these companies, 38 percent say the hire ended up costing them more than $50,000.
The survey, conducted among 179 U.S. IT employers between August 16 and September 8, 2011, bore out these results:
Why IT companies make bad hires
A rushed decision and insufficient talent intelligence were the top reasons IT employers gave for making a bad hire, but in many cases, it's hard to classify why the individual was a poor fit.
- Needed to fill the job quickly — 40 percent
- Insufficient talent intelligence (knowledge on who target talent is) — 28 percent
- Not sure; sometimes you make a mistake — 24 percent
- Sourcing techniques need to be adjusted per open position — 15 percent
Effects of a bad hire
The survey found that the price of a bad hire adds up in variety of direct and indirect ways. For example, nine percent of bad hires in the IT sector result in legal issues and ten percent result in fewer sales. The most common effects, according to employers who made a bad hire in the past year, are:
- Lost time to recruit and train another worker — 45 percent
- Less productivity — 45 percent
- Cost to recruit and train another worker — 41 percent
- Employee morale negatively affected —41 percent
- Negative impact on client relations — 29 percent
Characteristics of a bad hire
When classifying what makes someone a bad hire, IT employers reported several behavioral and productivity-related issues:
- Employee didn't work well with other employees — 67 percent
- Employee didn't produce the proper quality of work — 66 percent
- Employee had a negative attitude — 58 percent
- Employee didn't meet deadlines — 55 percent
- Customers complained about the employee — 51 percent
- Employee had immediate attendance problems — 47 percent