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Human Resources & Payroll

The True Cost of Underperforming Employees

An employee who can't keep up with work demands takes a heavier toll on a business than some may think, new research suggests. Global staffing firm Robert Half recently asked CFOs to estimate how much time is spent coaching underperforming employees.

An employee who can’t keep up with work demands takes a heavier toll on a business than some may think, new research suggests. Global staffing firm Robert Half recently asked CFOs to estimate how much time is spent coaching underperforming employees.

The answer: 26 percent of working hours, on average — that’s over 10 hours out of a 40-hour workweek. Finance executives also acknowledged that hiring mistakes negatively affect team morale.

View larger infographic of the effects of a poor hiring decision.

CFOs were asked, “To what extent do you think making a poor hiring decision affects the morale of your team?” Their responses:

Greatly

44%

Somewhat

47%

Not at all

9%

Total

100%

“A bad hire is tremendously expensive for a company,” said Paul McDonald, senior executive director for Robert Half. “The time and money managers spend on recruitment and training is lost, and they also have to fix underperformers’ mistakes and deal with their effects on staff morale and productivity.”

McDonald added, “A bad hire signals that your hiring process may be flawed. It could be that you are not putting sufficient weight on soft skills or are overemphasizing qualities that aren’t crucial to the role.”  

Here are four hiring best practices from Robert Half:

1.      Use a multipronged approach. Most employers post open positions on job boards and just wait to be flooded with applications. Maximize your chances of hiring a top performer by using multiple strategies:

  • Ask for employee referrals.
  • Tap your network.
  • Work with a recruiter.

2.      Hire for fit. New hires should have the technical chops to do the job well, but don’t forget to assess how various candidates may fit within your team and corporate culture.  

3.      Offer above-average compensation. Job seekers with stellar skills know what they’re worth, so pay is not the place to skimp. Consult resources like the 2018 Robert Half Salary Guides for insights on starting salaries, hiring trends, benefits and perks.

4.      Don’t skip the reference check. Nobody loves calling strangers to get information, but the reference check is still one of the best ways to ensure potential employees are who they say they are, especially since resume lies are on the rise.

More information about the costs of a bad hire can be found on the Robert Half blog.