Did you know that the cost of a bad hire goes deeper than financial fallout alone?
Toxic bad hires can erode company morale and leave long-term damage in their wake, with UK businesses spending billions annually to recover from the impact of a poorly-chosen employee.
While no business owner would knowingly bring a toxic employee into their team, it’s a fact of life and work that bad hires are both common and costly. In this article, we’ll look at the grim reality (expense and impact) of a bad hire, but also practical tips for spotting, dealing with and avoiding toxic people in your workplace.
Be reassured it’s not all bad news; it’s simply a case of knowing what you’re dealing with before you take action.
What is a toxic bad hire?
There are poor hires…but then there are bad hires. Like, really bad. While a company might reflect on a poor hire and admit that they simply weren’t the right fit, a toxic bad hire can have much more damaging, long-term effects on a business.
A toxic employee is likely to operate in complete self-interest, which may involve eroding team morale, encouraging others to walk, engaging in undesirable behaviour, or even partaking in illegal activity while in your employment. They might not ‘go quietly’ on receipt of warnings or a dismissal, which can escalate the toxicity further, so they may require sensitive management even once you’ve decided to remove them from the organisation.
How to get rid of a bad hire? If the individual has directly contravened company policy, this usually gives sufficient grounds for dismissal, but be aware that any dismissal must be made fairly, within conditions recommended by UK legislation, and that a suspected wrongful dismissal could lead to the employee taking the case to an employment tribunal.
What is the financial cost of a bad hire in the UK?
A bad hire has been estimated to cost at least three times the person’s annual salary to put right, according to a survey by the Recruitment & Employment Confederation, with the figure climbing higher for senior roles. This may include resources required to recruit, retrain and recuperate any losses made during or in the aftermath of the employee leaving.
With UK businesses spending billions on bad hire recovery, it’s clear that taking on toxic employees can leave you feeling seriously out of pocket. You could use a cost of a bad hire calculator to determine the specific financial impact of taking on the wrong candidate, which tend to use the individual’s annual salary to generate a projected financial risk calculation.
How else do bad hires impact on business?
Hiring bad employees can have additional negative consequences that go further than the financial fallout. These cultural and psychological effects can actually cause greater long-term damage, and can even mark the start of a toxic workplace culture within your business.
Toxic employees tend to be driven by self-interest over the interests of the organisation or other employees. As a result, they may harass or bully other team members, behave badly towards clients and customers, or purposefully foster a toxic culture in order to build support for themselves at the expense of wider team morale.
When a toxic bad hire leaves a company, they may encourage others to do the same, or not leave in a professional manner. They may seek revenge on your organisation by accessing private data, stealing equipment or badmouthing your management to others.
Bad hires can also have major repercussions on wider company reputation, particularly if they choose to share their grievances online, or spread slander about your organisation publicly.
How to avoid bad hires and toxic people at work
So, it’s obvious that bad hires are expensive and damaging. But what can you do about them?
Perhaps you’re starting to recognise toxic employee signs within your own workforce, and are looking to manage the situation as best as possible. Or maybe you have been burned by an experience with a bad hire that you would rather not repeat.
Either way, you have two general choices with managing bad hires, which are:
1. Considered management
Once you’ve identified a bad hire in your midst, you will need to act swiftly and sensitively to avoid making the situation worse.
You can manage a toxic employee proactively by:
Always including a probation period within the terms of an employee contract, and consider setting this to a term of 6 months to ensure that you can accurately assess whether the employee is the right fit. Specify a short notice period within the employee contract for the duration of the probation.
Make performance reviews a standard and frequent part of your terms of employment, and try to encourage an open and transparent business culture to prevent employees feeling like they are unable to speak out.
Restrict the toxic employee from having as much interaction with others, if they are having a detrimental impact on team morale or have been shown to engage in bullying behaviour.
Communicate openly and respectfully with the employee, and provide a formal warning if appropriate. If no improvement in behaviour is made following this, you can initiate a disciplinary procedure, overseen by the company’s HR department.
To support a disciplinary procedure, you must log evidence of any misconduct that goes against company policy, and keep this data secure and private. All evidence must be objective (e.g. evidence of absenteeism, written evidence demonstrating misconduct) rather than subjective (such as personal opinions of the individual).
You should provide details of the company’s disciplinary procedure, and grievance procedure if you have one, to employees as part of the staff handbook. It’s important that the procedure is strictly adhered to in order to avoid accusations that this was not followed correctly or fairly down the line.
If you want to pursue a dismissal, you must do this fairly, and with respect for the person’s dignity and privacy. Ensure that you have sufficient grounds for the dismissal before you proceed, and make the process as formal, clear and private as possible. You may want to suggest the individual goes on garden leave to protect the company’s interests at this stage.
2. Avoidance
The best policy? Swerve a bad hire before they come your way. Whether you want to take pre-emptive action or avoid a repeat bad experience, avoiding hiring toxic employees in the first place is the best way to preserve balanced workplace dynamics and business reputation.
You can avoid bad hires by:
Investing time, resources and strategy into making your workplace culture open, positive and healthy. The more resilient and supportive your existing work culture is, the less likely a toxic individual will be able to corrupt it.
Making psychological and personality assessments part of your hiring process. Some testing software and HR tech are now sophisticated enough to make highly accurate assessments of candidates based on responses, reaction time and even tone of voice.
Background screening candidates thoroughly, lending particular focus on how they communicate with others online and on social media. YOONO’s AI-powered reputation reports give you complete and relevant information about a candidate to make a hiring decision with confidence.
Make toxic hires a thing of the past
In an ideal world, all employees would be model members of your organisation, and while most individuals are respectful of others and want to do right by themselves and the company they work for, there will unfortunately always be those who are quite the opposite.
As we’ve covered, toxic bad hires can be detrimental to company finances, productivity and reputation, so any means of avoiding them in the first place are not only wise, but essential. Make sure the people you bring on board are only going to bring positivity into your business, by using YOONO to research their history and online persona. When YOONO who they really are, you can extend them an offer with complete confidence that they will be an asset to your team.