Cost of a Bad Hire

In a previous life I was director of operations for a large Home Care agency. So, I was involved in hiring a lot of staff and supervising a lot of people.  Never in my wildest dreams would I have thought about hiring someone without a written job description; without considering what would make them a good employee or what skills they would need to perform their job.  I would have an organizational flowchart showing where that position would fit into the business and who that employee would report to.  And yet, when I was trying to manage my own small business I didn’t give it a second thought.  

I needed someone to do morning barn chores.  So, I found someone to help. I found a warm body. And I was thankful.  If they knew how to put a halter on a horse and lead them in and out, they got the job.  And if I am being honest, I have hired people who knew nothing about horses and they announced during the interview that the barn stunk.  All because, I wanted cheap labor.  This, by the way is a receipt for disaster. Loose horses, broken halters and vet bills made up for the money I thought I was saving and training.

And It turns out that the time I spent training and trying to translate cost me an arm and a leg. And I hadn’t even considered the rest the cost associated with a bad hire.

Expert say that 74% of us have hired the wrong person.  I don’t believe that. I don’t know of any manager that has not had a bad hire. If someone says they have never hired the wrong person they haven’t hired anyone.  

The average cost of a bad hire is 30% of the individuals first year’s earnings.  Employee are the livelihood of your business and a bad hire can cost you in ways that you never thought possible. Like loss of customers, poor morale and employee turnover.  Wasted resources, especially your time.  As a small business owner your resources are limited enough.  Bad hires require more time, attention, supervision and training.  On the customer side, an employee with a bad attitude will cost you clients.  In the horse world a bad hire will create vet bills, repair bills, poorly mannered horses, injured students and possible lawsuits.

Bad hires can also hurt your reputations.  Especially in the digital age.  

One employee I hired, decided to leave bad reviews on every website she could fine.  She worked for me for about 3 months.  I needed someone to feed in the mornings, and she knew how to put a halter on and was comfortable around the horses. Turns out the barn she worked at previously was in someone’s backyard.  She could not follow directions, she broke everything she touched, and she really didn’t know half of what she pretended to know.  I should have known when I had to explain the difference between the hunter ring and jumper ring. But I was not hiring her to ride. And after 3 months I fired her.   Had I taken the time to work through the process, I would have not hired her.

Don’t get me wrong. Most of the people I hired really tried.

I know that most of us small business owners don’t have the luxury of having clearly defended job descriptions and a flow chart.  But it will save you a lot of time and money if you put in writing what you want the person to do, what skills are necessary to do the job.  It helps me to think of what I would look at during an annual performance review. It doesn’t have to be elaborate. Start with a list of responsibilities and task. Identify the skills needed to perform those task. Be clear about how you are going to manage this position. Include the hours that you expect them to work. Make sure to include how the position you are hiring for helps to contribute to your goals. For a barn help position, there are things that we as horseman overlook but then get worried because they aren’t there like identifying health issues in our animals. How can you relax away from the barn is you are worried that your barn staff doesn’t know what colic looks like.

You can always change your job description. If fact, you should consider the description as evolving. Every time you review or hire someone new it will change a little bit. You can what you want for the person in that position.  And as your team grows, so will the responsibilities of each position.

Remember, if you have to stand over them very minute to make sure they are safe, they are not adding to your productivity. So take some time to grow slowly.

If you need help with position descriptions, or growing your business email me at or click the link below to schedule an initial consultation.

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