In a perfect world, we’d all like to be able to hire the first qualified candidate who walks through the door and move on.
After all, the process of hiring and retaining employees is a necessary expenditure of time and resources already. Given the currently robust job market in the US, it can be almost painful to let an employee candidate go by unhired.
But jumping to hire a new candidate without doing a background check and then living to regret the decision is an experience no business wants to go through.
In a failed hire scenario, there is so much negative impact to your business that too many mistakes like this can run your company right into the ground.
Here are just a few of the different kinds of fallout from a failed hire, which can impact your bottom line:
📉 Decreased Productivity
When you have to intercept a negative staff situation and fire the offending candidate, this inevitably disrupts your workflow. You have lost time and expense, on top of which there may be a messy recovery process.
A criminal employee who stole from the company, embezzled, or damaged company property is going to cost you money to replace those resources.
An employee who creates a hostile environment for other employees brings your whole production chain down.
In worst-case scenarios, the timing can be disastrous if you were right in the middle of closing a big deal, or experiencing a productivity crunch with a deadline.
📉 Lost Training Costs
Hiring and orientation cost the average company about $4000 and takes about 24 days to complete the process. Training is a large part of this expense, with administrative paperwork running a close second place.
When you spend all those resources for nothing and find yourself back where you started, you might as well have set that money on fire.
📉 Negative Publicity
A bad hire scenario is even worse if the offending candidate was facing the public. We hear news stories every day of employees who were inept or even criminal while in their position, which reflects poorly on the company.
In these days of social media and increased consumer vigilance, all it takes is one bad situation caught on a customer’s phone, and your company’s name might be dragged through the mud forever.
📉 Financial Burden From Liability
In some cases, appointing a dangerous felon or known harasser to a sensitive position can expose your company to lawsuits. If the candidate harms another employee or a customer, that’s a liability you will probably have to answer for in court.
📉 Lowered Employee Retention
If you’re lucky, a negative hiring outcome won’t impact the rest of your workforce.
But it often can, even if you don’t see it on the surface. Your other staff members may feel degraded, demoralized, or victimized by the offending candidate.
Your company’s reputation matters to your employees, too, so if your hiring decisions are consistently questionable, you can drive away your best team members who don’t want to be associated with your discouraging work environment.
And this impacts your training staff most of all because having to replace an employee they just spent time training is frustrating.
📉 Difficulty Attracting Future Candidates
As with your reputation within the company, so goes your word of mouth among job hunters.
Too much turnover, all by itself, makes your company have the reputation of a “revolving door,” driving away candidates that seek better stability.
If news gets out that an incident happened because of your poor hiring practices, all of the collective fallout we’ve listed here causes future candidates to ask “Why would I want to work for this company?”
Compared to all of the above, background checks are cheap in time and resources at any price.