I’ve never had a business leader tell me, “Ron, you know I just didn’t hang on to that underperformer long enough!“
I’m still waiting…but quite to the contrary, the story is always one of regret, of not having encouraged the underperformer’s career re-direction sooner. It continues to be my experience that once you have identified an underperformer, who does not respond to your coaching/mentoring by improving, you must quickly re-direct their career or risk negatively impacting the rest of your team and your business’s success.
Now, a Harvard Business Review Study further substantiates the need to cut loose those problem employees. The study polled several thousand managers and employees from a diverse range of U.S. companies about their responses to rudeness at work and learned that among those on the receiving end:
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38% decreased their work quality
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47% decreased their time at work
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48% decreased their work effort
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63% lost time avoiding the offender
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66% said their performance declined (WOW! What could this cost your company?)
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78% said their commitment to the organization declined
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80% lost work time worrying about the incident
The first step is to get better at not hiring underperformers. But, if a mis-hire should slip in under your radar, I would suggest that once identified, you establish a timeline to coach and mentor them which culminates in either another opportunity to continue growing and improving or results in their dismissal or resignation due to lack of improvement. But then again, maybe you will be the one!
“The only thing more expensive than education is ignorance.” Benjamin Franklin
As a business leader, when’s the last time you calculated the cost of your mis-hires? Never! Why is that? You have
metrics for nearly everything else. You are constantly calculating capital costs and ROI (return on investment) for all of your other investments. Why are you not regularly measuring, calculating and monitoring the costs associated with one of your most critical investments…that of making a decision to invest in (hire) human capital?
According to Dr. Brad Smart of Topgrading fame, every mis-hire (of someone earning a base salary of $100,000) costs your company $1.5 Million and 150 hours of other people’s time. That’s 15 times their salary and about 3 hours wasted per week over the course of a year. Even if you only believe these numbers are 25% accurate, that’s still $375,000. Not to mention the lost productivity of others, the lost opportunities and the frustration.
Start improving your hiring processes (and your bottom line) by recognizing and acting on the high cost of mis-hiring. Make your own calculations on the costs of your mis-hiring. Be sure to include initial hiring costs, compensation and benefits, training, severance, missed opportunities, team disruption, and time…not to mention stress and frustration.
You’ll probably be shocked by the true costs of your mis-hires, but I am sure this “reality check” will make you more motivated to take your time, do your due diligence and ”hire right” the first time.
