Survey Focuses on Hiring Mistakes

• Jun 21, 2009

According to a recent survey from online payroll provider SurePayroll, three out of four small business owners say they have hired at least one employee they later wished they had not, and 12 percent of respondents indicate the hiring mistake resulted in a significant financial loss--more than $10,000 a pop. SurePayroll says there is a growing trend of such hiring mistakes and that they are attributable to difficult economic times that have placed a considerable number of highly competitive and eager job-seekers into the market.

"The businesses we talk to say they are seeing more individuals lying on their résumés or exaggerating their skill sets in order to get scarce jobs. In a down economy, small business owners must be especially vigilant when they bring on new employees," says SurePayroll President Michael Alter.

According to the survey results, many small business owners are overlooking steps that can reduce the likelihood of a hiring mistake. Most who admitted to bad hiring decisions said they resulted from a failure to accurately assess an employee's personality, character, or skill set. Responses included:

• "We hired an employee without doing a background check, and then I caught her stealing."
• "We rely mainly on a strong 'gut feeling' to determine if the candidate seems qualified and references check out."
• "Our hiring errors have been largely due to time constraints--we needed to fill a position fast and quickly chose what appeared to be the best applicant from resumes received."

So what do business owners do when they realize they've made a hiring mistake? The most common reaction is to give the employee extra training. Others cut right to the chase and fire the unsatisfactory employees. Either tactic produces the same result: more time and money spent in training or recruiting, not generating revenue for the business.

According to Alter, the best way to avoid making a bad hire is to conduct candidate research during the pre-employment phase. He suggests that, rather than simply relying on gut feeling, employers use these proven, objective screening methods:

• Perform Background Checks. Nearly half of all small business job applicants submit résumés with false information. A background check will help ensure that the candidates employers hire and entrust with their finances and proprietary information are who they claim to be.
• Assess Personality Traits. Understanding candidates' underlying personalities and temperaments helps an employer determine whose work style will fit best in the company.
• Conduct Skills Testing. Skills testing reveals what a candidate is truly capable of before even coming in for an interview. Tests are even available in highly specialized, technical areas including C++, Oracle, and Java.
• Deploy Drug Screening Tests. Experts in toxicology research state that 75 percent of illegal drug users are employed, and most work for small-and medium-sized businesses. Drug screening services help employers keep their workplaces safe and ensure the competency of the employees they trust every day.

"For small business owners, the psychological and economic strain of making a hiring mistake can be a massive burden on the company," Alter says. "What's more, these kinds of hiring mistakes can be reduced or avoided altogether by implementing proper precautionary measures. Investing in pre-employment screening services is worth the small upfront investment." For more information on employment screening, including an online tool designed for small business use, visit www.surepayroll.com.