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According
to Peter Drucker, “The toughest decisions in an organization
are people decisions – hiring, firing, promotion. These
are the decisions that receive the least attention and are the
hardest to ‘unmake.’” Hiring the right people – avoiding “mis-hires” – is
crucial to any company’s survival.
What do we mean when we talk about a “mis-hire”?
A mis-hire is the wrong person in a particular job. It doesn’t mean that
the person is incompetent – in fact they may have extraordinary talents.
But they do not have the competencies required for that particular job.
One study showed that half of all employment situations result in a mis-hire.
Mis-hires can not only kill individual careers, they can send a company into
a “corporate death spiral”: Poor senior hires result in lower-level “A
Players” leaving the company; the remaining “C Players” usually
hire more poor performers, and the company slides into terminal disrepair.
A study conducted by Bradford Smart for his book, Topgrading, concluded
that with an average salary of $114,000, the average total costs associated with
a typical mis-hire was $2,709,000 – that’s right, nearly 24 times
the salary. His study considered factors such as the cost of hiring, the cost
of maintaining the person in the job, severance pay, mistakes, failures, missed
business opportunities, and the costs of disruptions due to inefficiencies, lower
productivity, impaired teamwork and lower morale.
Read further in this newsletter for articles that discuss ways to avoid mis-hiring – a
mistake your company can’t afford to make.
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