U.S. companies spend approximately $4,000, on average, to fill an open position, according to a recent Bersin by Deloitte brief. In the manufacturing sector, the number is even higher — $5,611. And the Society for Human Resource Management (SHRM) estimates that it can cost up to five times a bad hire’s annual salary to replace one.
Six areas to measure the costs of a hiring mismatch
In addition to the sheer cost of onboarding a new employee, the high costs of bad hires affect every area of the business, from employee morale to your company brand. Here are the six areas most cited where bad hires damage an organization:
- Higher turnover
- Lower productivity
- Lower quality of work
- Lower customer service
- More headaches for supervisors and managers
- Interpersonal issues with co-workers
Why do so many companies hire bad candidates?
So, why are there so many bad hiring decisions? In the CareerBuilder survey, 26 percent of employers said they weren’t sure why they made a bad mistake, but they cited insufficient time to properly vet candidates and a lack of sufficient talent intelligence as the top reasons. And when you consider 46% of resumes contain false information, they cannot be trusted to predict future performance. You simply need more — and better — data to hire the right candidate.
The value of prehire assessments
More than ever, companies are increasingly relying on new technology and pre-hire assessments to make educated hiring decisions. WebAssess, for example uses an industry-leading 3-step process to quickly and confidently identify the right candidate:
- Skills and ability tests will identify what a candidate knows and can do.
- Personality instruments determine if the candidate will be a good fit.
- Structured interview tools make it easy for you to conduct your final screening with questions proven to identify the strengths and weaknesses of the candidate.
To find out more about pre-hire assessments, and if you would like to see for yourself, try WebAssess for free when you visit http://trywebassess.com
About the Author
Denise Leaser is the Chief Executive Officer of GreatBizTools, author of WebAssess, the #1 on-demand pre-hire assessment tool for enterprises, small businesses and startups. Denise is a member of the Society for Human Resource Management (SHRM) and has been a practicing professional in the HR community for more than 25 years. You can reach Denise on LinkedIn or Twitter @deniseleaser