The Story of John and Margaret, aka How Not to Hire Someone
The following is an excerpt from our updated Hire the Best training, coming soon.
John and his wife met a nice woman at church. Let’s call her Margaret. As they got to know each other, John and his wife developed a casual friendship with Margaret. They would exchange hellos, talk about their week, and share stories about their kids. They liked Margaret. She seemed sensible, funny, and rational.
John’s company had less than 20 employees. A few months after meeting Margaret, there was an opening in his business at a time when Margaret was looking for a new job. After a couple of coffee meetings, he decided to hire her.
Fast-forward a year later, and Margaret had become the most toxic member of John’s team. Good employees had quit because of her, and team members that stayed were unhappy and less productive because of her workstyle, attitude, and inconsistent work standards.
For her part, Margaret was very unhappy. In her mind, her role was undefined, she took on too much work, and she regularly worked on the weekends to keep up. She was exhausting herself for the company and for John, whom she no longer respected.
What a nightmare.
Think about all the time and money spent onboarding Margaret and training her. Consider the negative effects on other team members, and the opportunity cost of a bad hire versus a good hire. Margaret had become toxic and caused good employees to quit. Sales were lost. Customers were upset. Opportunities were missed that could have generated revenue and profits for years.
Even in such a small company, hiring Margaret may have cost John’s company a million dollars. In a larger organization the loss might have been more.
The impact of one bad hire can hurt your company financially for years.
And what about Margaret?
She felt she was working hard to help the company. She was frustrated, unhappy, and depressed. She ultimately regretted her decision to join the company.
A bad hire cuts both ways. This is a huge expense which is often overlooked.
For everyone’s sake, we need to avoid hiring the wrong person.
A Bad Hire is a Costly Decision
A Career Builder study from 2013 says 62% of U.S. employers blame bad hires for five huge expenses: Lower company productivity, negative worker morale, sales declines, strained client relationships, and even costly legal issues.
A report by the SHRM Foundation says direct replacement costs of departed employees can reach 50-60% of an employee’s annual salary. This includes accrued paid time off, overtime or contingent employee costs, plus staff time for exit interviews and administration. And this is one of the lower estimates!
In the story above, John definitely inflicted a few of these costs upon his company unnecessarily through a foolish hiring decision. Furthermore, these expenses are just the ones we can track. How many other “expenses” and losses are lurking in the shadows, unknown to business owners?
The Solution is to Follow a Better Hiring Process
John could have avoided these known and unknown expenses by simply following a better hiring process.
Some people can follow their gut, they have that unique intuition. They can tell a good candidate from a bad candidate in the blink of an eye. But these amazingly instinctive hiring managers and business owners are few and far between.
For most of us, meaning you and me, we need to follow a step-by-step process to attract, qualify, interview, and onboard great employees. It is simply the best and most proven method of hiring the best.
The next time you are hiring for an open position, remember the story of John and Margaret, and follow the right steps to hire the right candidate.
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We have been offering our Hire the Best system for years as a proven process you can follow with all the steps and tools you need to hire the right candidate. It has produced amazing results with our clients, and this year we are excited to debut a new, updated version in the coming months.
Need help with your hiring process? You don’t have to wait for the updated version of Hire the Best.
