If you've ever made a "panic hire," you know how quickly it can make a staffing problem go from bad to worse. The panic hire storyline is often very similar: An important position in your company is open and you need applicants...fast. Perhaps this empty position threatens the success of an important client project or company growth strategy. Due to pressure from your peers or boss, you feel desperate and, after a hasty interview process, you hire the first person who seems adequate. You reassure yourself that it’s better to have an okay employee in the position than to leave the position empty.
But soon, it becomes apparent that the new hire is hindering the project rather than helping it. Your adequate employee's skills may not be up to par. They may not fit with the company culture. It might take too much extra time to check their work and perform damage control. Eventually, the employee either quits or has to be let go – and you're back to square one.
It doesn't have to be this way. With the right techniques and planning, you can avoid panic-hiring the wrong person and hire swiftly and effectively instead.
The costs of the wrong hire
To avoid panic hiring, keep this mantra in mind: The wrong hire is worse than no hire.
Bad hires come with a high price. The U.S. Department of Labor estimated that a bad hire can cost companies at least 30percent of that hire's first-year earnings. Although it may not sound devastating, when you consider that cost over time and add onboarding and training costs, it's a high price to pay. As Link Humans, an employer branding agency, discovered, the cost of one bad hire could be as much as $240,000.
One research project sought to measure how "good" companies become "great" companies – great-performing companies, in this case, were those that generated cumulative stock returns exceeding general stock market by at least three times over 15 years.
The researchers discovered that leaders of great companies put people first; they focus on putting the right people in the right roles, even if the company is in a desperate” position. This way, they build a team of people who are self-motivated, believe in the company goals, and can adapt as the business grows.
Consider all the costs (financial and otherwise) of a bad hire. These can include:
- Recruitment costs
- Onboarding
- Negative impact on team performance
- A decline in team morale
- Loss of other employees
- Disruption of projects
- Lost or unhappy clients
- Weakened company brand
A bad apple can spoil the bunch; unfortunately, panic hiring makes it harder to identify the bad apple up front. That's why it’s important to set up effective hiring processes to ensure candidates are aligned with the job requirements, culture and company goals.
How to avoid making a panic hire (without leaving positions open indefinitely)
Acknowledge the talent shortage
The talent shortage is real. It's harder to find the right person for the job.
That is why it's more important than ever to be smart and creative in finding great employees. Use recruiting tools, hiring processes, and effective strategies to help locate the employees that are the best fit for the position. They're out there, but it takes more effort and more time to find them.
Facing the talent shortage head-on can help your company manage expectations about the time it will take to fill a position. You won't find the right candidate overnight, and that's okay. Take the time you need and stay true to your interview process to make the right hire.
Standardize your interview process
When a critical position is open, your routine hiring process can fall by the wayside in order to quickly fill the void. There's a chance you skip the details or slim down the hiring process because you know someone (usually a friend or acquaintance) who will fit the role. Your interview process should have a standard format that you use for all open positions, regardless of the role or the timeframe to fill it.
Unfortunately, scenarios like this often lead to a bad hire. A 2015 talent acquisition study found that organizations without a standardized interview process are five times more likely to make a bad hire than organizations with a standardized process in place. A lack of formal process doesn't allow sufficient time to ensure that the candidate fits the company and the culture, not just the role.
It doesn't matter if the seemingly perfect person walks through your door and says they can start tomorrow for a lower-than-expected salary. They need to go through the same interview process as everyone else.
Look internally
Internal hires have better performance during their first two years in a new role than external hires. It also takes internal hires much less time to acclimate to the new role in comparison to external hires. If time is of the essence for the open role, promoting an internal hire may likely be much better than hiring externally.
Build a talent bench
Imagine going through a list of qualified applicants and finding the perfect candidate for the open position, all without having to start recruiting for the position from square one. That's the magic of a "talent bench."
A talent bench is your own pool of qualified applicants who have already provided their information to your company through a previous job posting. Before actively recruiting for a recently opened position, you can first consult your talent bench and identify the skills, years of experience, and other metrics of applicable candidates. Someone you interviewed and passed on for a different position may be just the person you’re looking for to fill the next opening.
Proactively building a talent bench helps you avoid the sinking feeling of looking at an open position and thinking, "I don’t know anyone who can fit this role." Instead, it puts many qualified candidates right at your fingertips.
Look beyond experience
Open your talent pool by looking beyond experience to focus on the candidate's potential. Requiring five years of experience in a particular role, for example, might discourage great candidates who have only three years of experience – or maybe even none.
You want the right person to join the team, whether they've been working in the field for 20 years or just two. And it's important to remember that years of experience don’t necessarily guarantee that a candidate is capable of performing the job duties.
Another reason to emphasize talent over experience is that it can help you identify internal candidates that may be eager to take on a new role with more responsibility. Remember that skills can be learned, but talent can’t be taught.
The next time you need to hire for an open position and feel anxious, take a deep breath and don't panic. Revisit your hiring methods and make sure that your interview process is standardized so you can identify high-potential candidates. Build and review your personal talent bench for relevant applicants. Remember to examine all talented candidates (even if they don’t have the years of experience you’re looking for), and consider internal candidates for the position. With these best practices, you can hire swiftly – and more importantly, you can hire effectively.
Don't let panic dictate your hiring decisions. Do the right thing for your company by making sure you get the right people on board.