Research demonstrates cost of bad hire for New Zealand businesses.

Bad moves.

New independent research commissioned by specialised recruiter Robert Half shows the majority (98 per cent) of New Zealand hiring managers have hired an employee that did not meet expectations, and more than two-thirds (69 per cent) take upwards of two weeks to six months to discover that they have hired the wrong person.

According to the study of 300 hiring managers, 29 per cent typically realise within a fortnight that a new hire is not meeting expectations. The most common reasons given were a mismatch of skills (49 per cent), the candidate was unable to keep commitments (37 per cent) and underqualified candidates (35 per cent).

When asked what steps they took to address the poor hiring decision, 35 per cent of managers respectively say they terminated the employee contract or partnered with a staffing agency to secure a replacement, whilst almost half (46 per cent) developed a training program to develop the employee’s skills to the desired level. Little over one in three (34 per cent) worked with the employee on targets and checked in on their performance regularly, while 29 per cent re-started the recruitment process from scratch to secure a replacement. More than one in four (28 per cent) respectively looked for an internal vacancy the candidate would be better suited for or did not take any action and adopted a ‘wait and see’ approach to see if the employee’s performance would improve.

Hiring the wrong person for the job can significantly impact an organisation. The top three consequences of a bad hire according to New Zealand employers are increased stress on colleagues (46 per cent), increased workloads for existing team members (43 per cent) and increased stress on managers (37 per cent). Other cited negative consequences include lost productivity (32 per cent), higher recruitment costs (29 per cent) and low staff morale (27 per cent).

Megan Alexander, general manager of Robert Half New Zealand said: “The cost to a business of hiring the wrong person for the job can be high. Not only do managers have to start the recruitment process from scratch, but companies are also confronted with reduced productivity and they may also potentially miss out on business opportunities. Apart from the financial and time costs associated with a bad hire, non-financial setbacks can also include stress to existing staff from the added workload, which can cause significant disruption to a company’s workforce.

“Having an efficient recruitment process with the right checks and balances is essential to make the right hiring decision,” adds Megan. “A successful hiring manager should be able to assess crucial factors in a candidate’s profile, such as cultural fit, technical abilities, qualifications and references – helping companies hire the right candidate and avoid the costly repercussions of a bad hire.”

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