The Cost of Bad Hires: Financial and Cultural Impacts | Tara Vossenkemper Consulting

Hiring the wrong person? You might as well light money on fire.

Let’s dive right into the cloudy, murky waters of bad hires.

Take a second and picture this with me: you’ve just welcomed your new employee, Dave, who promises to bring a fresh perspective to your team. Hooray for Dave! Everybody is super excited about him joining the team.

::cue dramatic music::

Fast forward one month, and Dave’s fresh perspective is mainly about how to ruin morale.

He’s late every day, cancels client sessions with little notice, hogs the coffee machine, and somehow manages to “forget” the documentation deadlines he was just trained on with an alarming consistency.

Your once-efficient team is now a small army of grumbling souls, and you’re left wondering if you’ve accidentally hired a walking, talking black hole.

Understanding the Financial Impact of Hiring Mistakes

Okay, so let’s continue getting straight into it and talk numbers.

Hiring the wrong person isn’t just a drain on your patience, morale, and energy; it’s a direct hit to your bottom line.

First off, consider the training costs. Onboarding a new hire can cost anywhere from $1,000 to $5,000 depending on your industry (or even more, and the estimates here are way more than the ones I’m making).

Now, consider if your new hire fizzes out within the first few months (like Dave). And what if you have four Dave’s in a year? At my estimate steep end, that’s $20k/year on people who haven’t brought anything valuable to the practice - that’s a helluva lot of money down the drain.

Then there’s the lost productivity. A bad hire doesn’t just affect their own output. They can slow down entire teams, cause missed deadlines or issues with previously-functioning-relatively-well systems and processes, and then leave you scrambling to cover their responsibilities (read: figure out where their caseload can go). Gallup even suggests that the cost of lost productivity due to a bad hire can range from 30% to 50% of their salary.

30-50% of their salary.

For any business, that’s a lot, but for a small business owner? That shit is astronomical.

How a Bad Hire Can Destroy Team Morale

Omgggg, and let’s not ever forget a out the cultural impact. Morale takes a nosedive when one person’s negative influence seeps through the team. The constant disruptions, the whispered complaints, and the overall sense of dissatisfaction can lead to increased turnover, further straining resources. Replacing a single employee is hard enough, but when you’re losing good employees because of one bad hire, the costs multiply (not to mention the impact on morale and employee engagement).

Early Warning Signs of a Bad Hire

Okay, you get it, and now you’re probs like, “great, Tara, thanks, but how do we avoid this?”

THAT is exactly the type of question I love. How can you avoid ending up with your own version of Dave? I’ll help you figure out a few red flags to watch out for:

1. Inconsistent Communication: If the candidate’s communication during the hiring process is sporadic or unclear, it’s a red flag.* If they answer half the questions in email, for example. If they don’t reply for two weeks after saying they’d like to move forward quickly with scheduling (and give no brief rationale as to why). If they have one thing written in their resume, but say something else in their phone screen, and worse still, a third thing at any other stage of the process. Bottom line? Consistency is key.
   *Please note that one red flag might just indicate something about that person that’s quirky idiosyncratic, of even ability-related, but multiple red flags is likely indicative of a bad fit.

2. Lack of Enthusiasm: If they seem disinterested or have a lackluster attitude about the role and/or practice, it’s worth questioning their commitment. If somebody can’t come up with one question about the practice or the people in it, that’s an issue. If they don’t have any idea why they decided to apply for the role or your practice, that’s a problem. If they have nothing that indicates they’re interested in your practice for some distinct reason, that’s a little iffy.

3. Defensive Responses: If they react defensively to feedback or seem unable to handle constructive criticism, they may not be a good fit for a candid, collaborative environment. To clarify, this doesn’t mean waterboard them with feedback - it just means that if you’re actively giving feedback in your interview process and the candidate doesn’t seem receptive or open to what feedback is coming their way, then you can probably know what to expect down the line.

4. Overemphasis on Past Failures: While everyone has challenges, if the candidate focuses more on past failures than their achievements, it can indicate a negative mindset. Specifically if they’re spending time putting the locus of control for all of their past failures on external circumstances and/or showing zero ownership. Of course there are instances where there are clearcut victims and clearcut perpetrators (including systems) - that isn’t typically true for every circumstance or situation.

5. Poor Job Performance Almost Immediately: This is not to be mistaken for a learning curve. This is reflective of people who are not completing simple tasks as assigned (where mistakes are allowed) even after multiple attempts at training and support.

Here’s what I can say. It is so easy to overlook these signs when you’re desperate to fill a role. It’s almost like you get tunnel vision - you’re ready to hire and you know you need that role/seat/position filled, like, yesterday. I absolutely have had my share of hiring mistakes, and I’ll tell you something right now - you better believe each one was a (painful) lesson in what happens when we let desperation cloud our judgment.

Strategies to Avoid Bad Hires in Your Practice

Alright, now onto the fun stuff. Let’s tackle how you can avoid these pitfalls:

1. Meet and Greet with Your Hiring Team: Before making an offer, have the candidate meet with your hiring team. This informal interaction can showcase how well they mesh with your existing team dynamics (or not) and for the candidate to get a feel for what it’s really like at your practice. It’s also a great way to get honest feedback from various perspectives.

2. Use Assessments: I can’t say enough about personality and temperament assessments. These things are invaluable. We all have thoughts and feelings and opinions about candidates, but we can’t always see things that don’t present. Assessments can help to quantify traits that might not be evident in interviews. By cross-referencing these assessments with what you observe in the interview process, you can spot discrepancies and avoid potential issues down the road. It’s like having a second pair of eyes to catch what might slip through the cracks.

3. Consistent (and Semi-Structured) Interviews: Stick to a consistent interview process and format, where each candidate is primarily asked the same questions. This ensures you’re evaluating all candidates on a level playing field and helps reduce bias. However, don’t take this to mean that you can’t ask additional questions beyond those ‘required’ ones. Make sure that you follow up your interview questions with candidate-specific questions, that often come as a result of hearing what the candidate has to say.

4. Reference Checks: Dig deeper than the usual references. Ask probing questions and verify the candidate’s claims (i.e., like certification proof). This step can provide insights into their past performance and potential red flags.

5. Culture Fit Over Skill Fit: Skills can be taught, but a culture fit is non-negotiable. Ensure that the candidate aligns with your company’s values, vision, and overall culture. A mismatch here will lead to long-term dissatisfaction and productivity issues. You want somebody who fits the vibe, which sounds abstract and ridiculous, but it should be actionable and operationalized.

Conclusion

Revisiting and tightening up your hiring process might seem like a daunting task, but it’s a crucial step in safeguarding your practice’s success and morale. You have to be paying closer attention to the signs of a bad hire and implementing prevention strategies so that you can save yourself time, energy, money, and the right people who are currently with you (or who will be with you in the future)!

You want to talk more about this? You know that’s what I love! You can catch me for monthly Q&As in my Practice Culture First Membership community (with hiring resources in the digital library, as part of the membership!!) or you can book a consultation with me. If you’re unsure, just schedule a free Discovery Call and we can figure out what makes the most sense for you.

I want you to build a team that’s not just highly skilled, but that actually makes your practice feel like the unique practice that I’m sure it is.

About the Author

Dr. Tara Vossenkemper is a candid (and kind) consultant who’s been in the trenches of group practice ownership for over five years. With a hearty blend of depth, irreverence, and a solid dash of humor (or so she hopes), Tara helps practice owners navigate the can-be-messy process of hiring, culture-building, vision generating, people-y issues, and all the other things that keep you up at night. When she’s not consulting, she’s probably wrangling her farm animals or homeschooling her kids—because why not add more chaos to the mix?

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