Business Owners Feel The Brunt Of Bad Hiring Choices

By Daniel Rose

There are few management decisions more critical to your company's success than who you hire. Choose wisely and your company reaps the benefits of strong leadership and greater productivity. Pick the wrong candidate, however, and you've cost yourself more than the time it takes to find a replacement to fill the void.

Experts estimate that hiring mistakes cost about one-third of the "mistake's" annual salary. For instance, replacing a manager earning $50,000 will cost a company approximately $17,000. This figure includes the loss of productivity while a replacement is found, the expense of hiring and training the replacement, plus the indirect cost of lower morale and poor service.

The problem most business owners face is how radically the interview process has changed in the last few years. It's difficult to keep up with these changes while running a business too.

Plus, for every book on the market that helps you ask the right interview questions, there are 10 books that coach the candidate on how to respond correctly to those same questions. Add on the myriad of legal landmines that can trip up the most experienced human resources professional and one wonders how anyone can feel confident that they've hired the right person.

Avoid Costly Hiring Mistakes

Bad hiring decisions are made every day. After all, it's difficult to learn everything about an applicant from an interview. Qualities such as professionalism, creativity and emotional stability are hard to spot without special training.

One of the best ways for employers to look deeper into a candidate's qualifications is through behavior-based interviewing techniques. In the past, the interviewer might have said, "Tell me five things you like most about yourself," and the response was a laundry list of how great the candidates thought they were.

With behavior-based interviewing the question would be phrased differently, such as, "Tell me about a time where you were frustrated with a situation at work, and how you handled it?" A good interviewer will take note of what is said, plus how it is said -- tone of voice, body language, avoidance of eye contact, etc.

You want to get specifics from your candidate with this question. And you want to hear a positive attitude out of the person, even if they weren't happy with the way they handled the situation. This attitude shows they learned a valuable lesson in corporate life and the action probably won't get repeated in your company.

Red flags to a question like this are denial ("I was never frustrated in my last job"); hostility towards superiors ("Ah, my boss was a jerk and wouldn't ever listen to any suggestion I had"); and flights of fancy ("I single-handedly saved my company from going under because I bucked the system"). These types of answers almost always are warning signs of behavior you may not want in your next employee.

Daniel Rose is with the AMA. Some information for this article was taken from the Padgett-Thompson seminar, "Interviewing People" which will be coming this summer to the Los Angeles area. For more information, call 1-800-460-0275 or check out (

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