The Price of a Bad Decision

About half of new hires tend to be average to poor performers . . . which suggests the accuracy that goes into decision making is really no better than flipping a coin. Heads you win. Tails you lose.

There are many obvious costs to a bad decision to hire someone:

The time to create an ad,
The cost of placing an ad
The time and lost opportunity cost of screening resumes
The time and lost opportunity cost to develop a short list of candidates
To interview applicants
To screen-out unqualified people who might never use your company’s product or service because you rejected them
To check references
To make an offer to the winner
Who may turn down your offer for many different reasons

But what about the costs when a mediocre performer is on board?

Do you measure those? Can you measure those in lost time and opportunity. Do you track the performance of new hires for at least two years to see if they stay in your employment that long, review the decision making that went into the hire at the time so that you can do an assessment after the failure where the decisioning failed to identify a problem?

You see, most of us are influenced by appearance. We know that because we all learn the lesson of dressing nicely for an interview or business meeting so we know appearance impacts the hire, even when a superior candidate who may not be able to afford to get their hair cut or styled or buy a new outfit or suit is rejected. It’s why newspapers discuss wardrobe, hairstyle and speaking manner of candidates for President instead of substantive issues.

The difference between an extraordinary, good, average, poor and atrocious hire can be enormous.

To not review successes and breakdowns after a failure or triumph is a mistake too few organizations make.


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