Hiring the right people is one of the most important aspects of growing your business. Just as a solid team can spell success, the wrong employees can also bring your business down. This is why it’s important to understand what makes a prospective employee risky--and what you can do to avoid or mitigate those costs to your company.
Types of Risky Hires
Have you ever considered what makes a new hire risky? While the hiring process can be an exciting experience, it can also set your business up for severe consequences if you don’t weigh the risks appropriately. Northwestern University cites a study that explains, “The U.S. Department of Labor’s estimate is simple – the average cost of a bad hiring decision is at least 30 percent of the individual’s first-year expected earnings. If you take an employee with an annual income of $50,000, the cost to the organization can be $15,000. Others argue the cost is actually greater.”
If you can understand the types of risks you are likely to face, your company can make more informed decisions as you pre-screen prospective employees. These are some types of risky hires:
- Hiring Negligence or EEO Violations
A hire is considered to be risky if you haven’t taken the appropriate steps to ensure that a new role will be filled without violating legal requirements or compliance rules. This could include hiring someone who creates a dangerous work environment for other employees, a hire that doesn’t have appropriate levels of clearance for the job, or having inconsistent hiring practices that set your company up for expensive lawsuits. For example, are you certain your background screening process is accurate, precise, and thorough enough to prevent hiring negligence or employment discrimination on the part of your company? If not, you are making a risky hire.
- Online Hiring
As the workforce evolves and more people work remotely, cyber fraud is also on the rise in ways that impact hiring and employment. An online hire may appear faster or more convenient, and it may also open you up to interview qualified prospective team members you wouldn’t have otherwise found. But unless you can accurately verify identity and background information about a new employee you intend to hire virtually, you could set yourself up for employee theft or other problems. This could include issues from embezzlement to data theft. Unverified or inaccurately verified online hires are risky.
- Employees Likely to Turnover
Even if you avoid legal hiring liabilities and online risks, hiring an employee that is likely to turnover is ultimately still risky to your business. The time and financial costs of the re-hiring process are only part of the issue. You must also consider the impact on customer service and operational efficiency when you face an employment gap, as well as the potential negative image turnover creates for qualified employees wanting to join your team. If you don’t have a clear picture of a potential hire’s qualifications and history, you may end up with turnover you didn’t expect...and costs and consequences you aren’t prepared for. That’s a risky hire!
Robust Background Screenings Can Help You Make Informed Decisions
When it comes to hiring, you need to protect your company and your team. Alex Lennon of venture firm Black Nova Group explains, “Risk can’t be avoided, but risk can be reduced...investing time and effort into your hiring process is essential.” A thorough, consistent background screening process with qualified interpretation of results can help protect your company from negligence and discrimination lawsuits. It can also help you make informed decisions about online hires or identify prospective candidates who are less likely to turnover. These kinds of checks can not only help you avoid or diminish risks, but they can also give you confidence in your ability to position your company for sustained success. eKnowID has the technological capabilities and individualized insight to help your business decrease risk and hire for growth. Learn more about our high-tech, high-touch background screenings.