Costly Hiring Mistakes: What Companies Should Do To Avoid Them?

Volodymyr Bilyk
19 August 2020

For one reason or another, there is always a looming threat of hiring the wrong candidate for the job. No one is safe from costly hiring mistakes like that. The thing is – you need to understand why it happens to break the vicious circle and succeed. 

The company can’t afford to keep on making “wrong hires.” It means a waste of time and effort. As a result, the hiring process restarts, which means additional spending, which tends to snowball.

In our previous article, we talked about how to make recruitment cost-effective. This time, we will explain some of the costly hiring mistakes and how to avoid them.

Costly Hiring Mistakes Exposed

1 Being Too Selective / Waiting for the Perfect Candidate

Costly Hiring Mistakes - Being too selective

By default, every recruiter tries to find the best possible candidate for the company. The whole workflow design aims at that.

The problem is that sometimes recruiters are trying way too hard to find the perfect candidate for the position. There is even a term for such candidates – purple squirrels

This approach results in rejecting many potential candidates due to various “flaws” and “missing elements.” 

  • Part of the problem is position requirements. As mentioned in our cost-effective recruiting article, sometimes the requirements are too specific to attract job seekers properly. 
  • As a continuation of this issue, the screening process might be too strict to select any candidate – the recruiters disqualify the majority of candidates due to all sorts of flaws. 

The list is far and wide: not enough experience for the senior level position; the candidate overqualified; the portfolio is too small to showcase the expertise; insufficient skills/knowledge of a specific aspect of a domain; lacking soft skills or even lack of official certification.

The result is all too familiar: 

  • Hiring takes too much time;
  • The spending on closing vacant positions grows exponentially;
  • Team productivity takes a nosedive; 
  • Worst of all – the company is understaffed. 

How to stop being too selective with candidates?

You can break down the position requirements into several blocks. 

The first block covers mandatory skills and experience.

  • These requirements form a threshold for candidate selection.

Then there are competitive advantages. For example: 

  • The relevance of experience – if you are looking for a team lead and the candidate was one – that’s an obvious fit;
  • Successful cases – if you are working on sentiment analysis solution and the candidate worked on brand management product;
  • Certifications and other validation of expertise are always useful, especially when it comes to cloud engineers, project managers, or business analysts;
  • Various additional skills or cross-domain expertise fall under the “would be a plus” category and depend on its relevance to the company’s domain. 

The third block is soft skills and culture fitting.

  • This block is decisive in candidate selection due to its long-term implications.
  • If the candidate fits well enough as a specialist but doesn’t fit into the company’s culture and doesn’t share its values – chances are he’s not going stay for long. 

As for lacking skills and other flaws – if it is not related to critical skills and technologies – you can bet on upskilling and let the candidate pick-up those skills on the job. That would be an additional motivation for an employee and a showcase of growth opportunities within the company (also known as EVP, you can read more about it here).

2 Rushing the hires

Costly Hiring Mistakes - Rushing the Hires

Getting things done as fast as possible is the opposite of being too selective with candidates. Why does it happen? 

The cost-per-hire ratio is like a Damocles sword hanging over a recruiter’s heads. And it gets on the nerves because it is an illustration of everything right and wrong with the recruitment process. 

The thing is – recruitment is slow. It takes time to make decisions. The recruiter needs to follow the candidate through each stage of the talent pipeline, consider the options, gather and double-check all data. These are not split-second decisions. 

Because the more you rush things, the more uninformed decisions are. And that results in costly hiring mistakes. 

But the recruiters keep cutting corners here and there any way in hopes of keeping their costs-per-hire lower.   

There other ways of keeping a cost-effective cost-per-hire ratio without affecting the vital parts of the workflow: 

  • You can mitigate some of its aspects by automation and multi-tasking;
  • Keeping a talent pool helps with finding the right candidates faster;
  • Referral recruiting is a good workaround for finding candidates for complex and niche positions; 

With that said, it is crucial to take time for decision-making. You need to have all the pieces in place to know for sure. 

3 Stop being reactive and start being proactive

Stop doing reactive recruiting - start proactive recruiting

Reactive recruitment is one of the most common reasons for the inefficient hiring process. In a nutshell, a reactive approach means that the company fills immediate needs for talent acquisition instead of planning and anticipating workforce needs.

Here’s why reactive recruiting results in costly hiring mistakes. Imagine a scenario:

  • An employee decides to quit. The company engages in the recruiting process once the position is vacant. 
  • There is a time gap in-between losing an employee and hiring the new one – recruiters (whether in-house or recruiting agencies) need to do thorough candidate screening, interviews, probably provide some tests, and so on. 
  • In addition to that, there are productivity losses inside the company. The workflow slows down, anticipating the exit of the employee. After the new employee comes in, he spends some time onboarding and takes time to fully adapt to the workflow and start fining on all cylinders. And there is still lingering suspense on whether or not he’ll pass the probation period.

On the other hand, there is a proactive approach.

Proactive recruitment is all about the anticipation of the hiring needs. Here’s how this approach usually manifests itself: 

  • Some companies practice “always hiring” policy. This method keeps a steady flow of applications;
  • The applicants are matched with various internal criteria and kept on file for consideration if necessary; 
  • This file comes in handy upon getting a request to start recruiting for a position. It is also beneficial when the company expands, and you need to fill lots of different vacant posts.

As a result, the available talent pool is more profound. In addition to that, hiring the right candidates takes significantly less time. 

The upsides of proactive recruiting are the following:

  • There is more time to screen possible candidates, establish a connection with them, and develop a talent pool. In contrast, the hiring process takes less time because of the established foundation; 
  • The available talent pool mitigates the risks of staff shortage and productivity losses. You can hire the candidate that fits your company in terms of values, culture, skills, rather than rely on candidates available at the moment. Result: higher chances of scoring a long-term employee. 

4 Overcome the Unconscious Bias

Costly Hiring Mistakes - Overcome Hidden Bias

Believe it or not, unconscious bias is a significant factor in the decision-making process. It shapes the perspective of the person, drives his reasoning and interpretation of facts.  

In recruiting the subtle influence of unconscious bias shows itself in all sorts of discriminations of the applicants. It might relate to the applicant’s background, experience, age, gender, ethnicity, social status, “it factor” and the likes. Pretty much any attribute that gives a recruiter an excuse to have another doubt, discard an applicant, and move on. 

Part of the reason it happens is because of the recruiter’s prior experiences, preconceptions, and general societal patterns. Here’s an egregious example, there are not many female developers, so it might mean that they are generally not very good at it and thus unfit for a position. This argument is defenseless, but somehow it may contribute to passing on the applicant despite having relevant skills and experience. 

For the company, this might result in some rueful and costly hiring mistakes. And if the word gets out – also add reputational losses. In contrast – an unbiased approach provides you with a deeper talent pool, which is always a good thing.

How to overcome unconscious bias? One of the ways to keep the unconscious bias at bay is through the company’s culture. There are several elements: 

  • General stance on inclusivity and open-mindedness throughout the organization;
  • As for recruiting – you need to enforce the unbiased approach to applicants regardless of any external factor. The only thing that matters is the applicant’s skills and experience and how they fit the requirements of a particular position. 

In conclusion

As you can see, costly hiring mistakes are mostly a result of good intentions having negative consequences. In this article, we have explained how to avoid them. 

If you are having trouble with your hiring process or need help with recruiting the right talent – we can help you out.