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March 2015 • www.CPAPracticeAdvisor.com 13 FEATURE In a recent Robert Half survey, 39 percent of chief fnancial ofcers said the greatest cost of a bad hire is lower morale among the remaining staf. F o l l o w i n g c l o s e l y b e h i n d w a s reduced productivity (34 percent). Only one in four respondents cited money as the most signifcant loss. Here's a closer look at how a bad hire can cost your organization, and what you can do to avoid making one. The cost of a bad hire on morale and productivity As the saying goes, "One bad apple can spoil the bunch." Tere are sev- eral reasons new employees don't work out: • Teir work habits clash with the ofce culture, which throws a wrench in the normally smooth operation of your accounting team. • They don't have all the skills you thought they had, which means assignments — preparing audit reports or fnancial statements, for example — take longer to complete and are not done as accurately as they should be. • Tey have a weak work ethic. When other employees have to scramble to pick up the slack, they feel overloaded and resentful of the new hire. Furthermore, your own produc- tiv it y goes down — and stress goes up — because you have to devote time and energ y to disciplining bad hires, correcting their mistakes and placating other team members. A separate sur vey from Robert Half found managers spend almost a f ull day each week managing underper- for mer s . Bec au se you've made a poor h i r i ng dec ision, you r ot her staf may question your judgment and leadership. How to avoid hiring "bad apples" Poor stafng decisions rarely happen by chance. Tey are usually the result of managers not investing the neces- sary time and efort into the hiring process. But due diligence is easier in theory than in practice. Also, because there's a shortage of skilled talent, it's tempting to snatch up seemingly in-demand candidates before another frm does. Although you need to act with urgency in the hiring process, if you want to avoid the high cost of a bad hire, you can't take shortcuts. Here a re some t ips for ma k ing good personnel decisions: • START WITH A SOLID JOB POSTING. Collaborate with colleagues to create a clear job description, which will drive the job ad and, later, serve as the basis for the new hire's performance review. Outline the technical skills, sof skills, education and certifcations, years of experience, and specific industr y knowledge you seek. Tink hard about which particulars are required and which are preferred. You don't want to discourage candidates who have excellent technical abilities but are not experts in your company's business intelligence sofware, for example. • PRACTICE SMART RECRUITING. In addition to posting on job boards, reach out to your staf, professional associations and local alumni organiza- tions and ask whether they know of suitable candidates. A stafng agency can further accelerate recruiting and free up your time. • OFFER ATTRACTIVE COMPENSA- TION. Consult industry resources such as the Salary Guide from Robert Half and your network contacts to benchmark compensation trends. Ten put together a highly attractive compensation package. Keep in mind, in today's hiring environment, you'll ofen need to ofer salaries that go beyond being competitive to secure the best candidates. • CHECK REFERENCES. Ask fnalists for a list of professionals who can atest to their abilities. Don't skip this step, which can shed light on applicant's employment history and suitability for the position, as well as how well they'll mesh with your frm's culture. • WORK WITH CANDIDATES ON AN INTERIM BASIS FIRST. An increas- ingly popular and cost-efective hiring strategy is the temporar y-to-hire model. Bringing in interim accountants can lessen the load on your existing staf and allow you to assess a candi- date's skills and compatibility with your team in real time. If the candidate is a good fit for the position and your company, you can extend a full-time job ofer. W hen you make a poor staffing choice, you're not the only one who pays the price; your budget, staf and new employee also sufer. Te best way to avoid the high cost of bad hires is to take the necessary steps at the front end of the hiring process. Once they join your staf, it will be much harder and more expensive to repair the damage to your organization. The Cost of a Bad Hire (It's Not Just Money) - And How to Avoid Bringing One on Board By Paul McDonald M ak i ng a bad h i re can b e ver y expensive to organizations. In fact, research suggests ( www. blissassociates.com/html/articles/ e m p l oye e _ t u r n ove r 0 1 . h t m l ) replacing an employee who doesn't work out can cost at least 150 percent of that worker's salary. Still, as expensive as that is, the fnancial hit isn't the worst part. Paul McDonald is senior executive director with Robert Half, the world's frst and largest specialized stafng frm. Over the course of his 30-year career with the company, he has spoken extensively on employment and management issues based on his work with thousands of companies and job seekers.