While small and midsize firms continue to expand, the strength of their hiring process seems to be shrinking. In a Robert Half study of over 1,000 business and HR heads of SMEs, 81% admitted to making a bad hiring decision. This mistake caused them to waste about 17 weeks to rectify.
The survey, held in the United States, listed numerous costs of a bad hire, such as an estimated 45 hours being wasted on hiring and onboarding people who ultimately did not work out.
Additionally, more than half of respondents (53%) pointed out bad hiring led to increased stress levels on the team. One in five (20%) cited decreased confidence in the managers' ability to make good hiring decisions.
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Respondents (58%) claimed that they can identify a bad hire fairly quickly, i.e. less than a month - however, the real challenge lies in correcting the mistake. It took more than twice that time, 8.8 weeks, to let the person go. Before a replacement is found and put on the job, a process that can last up to almost five weeks, 68% of business push the workload down on their existing staff.
The survey also summarises ways to minimise the risks and costs of a bad hire:
Apart from a lack of dedicated HR function in some organisations as a reason behind faulty hiring processes, Paul McDonald, senior executive director at Robert Half, commented: "Multiple demands on a business owner's time also can pull attention away from recruiting and cause it to fall to the last priority."