Why Hiring the Wrong IT Employee Will Cost You

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August, 2023

Why Hiring the Wrong IT Employee Will Cost You

topic IT Recruiting visibility1088 views

So you have an open IT position you need to fill. You’ve spent weeks sorting through resumes, conducting interviews, and negotiating offers. After all that time and effort, you’ve finally found someone you think will be a good fit. You’re ready to move on to other priorities, confident you made the right hire.

But what if you didn’t? What if a few months down the road you realize you made a mistake? The costs of a bad hire, especially in IT, can be substantial. According to recent studies, the average cost of a failed IT hire is over $200,000, not including the costs to recruit and onboard a replacement. And that’s not even considering the lost productivity, morale issues with other team members, and potential security risks.

IT employees have access to sensitive data and systems. The wrong hire could expose you to data breaches, privacy violations, and intellectual property theft. They could make critical mistakes that disrupt your operations. Unfortunately, not all bad hires reveal themselves immediately. Some seem great at the start but end up causing problems later on. The risks are real, but the good news is with the right screening and hiring process, you can minimize them. Here are a few tips to help ensure you find an IT employee who will benefit your company for the long run.

What Is The Cost Of A Bad Hire?

A bad hire in IT can cost big bucks. Think tens or even hundreds of thousands of dollars.

Choosing the wrong person for a job can cost a lot more than just their salary. It's crucial to be careful when hiring because the consequences can be expensive.

The U.S. Department of Labor found that a bad hire can cost around 30% of what the employee earns in their first year.

When you hire the wrong person, it leads to lost productivity and extra costs in finding, hiring, and training a replacement. This can end up being a big financial burden for a company. That's why it's so important to hire wisely and make sure the person is a good fit for the job and the company.

How Hiring Bad Employee Costs You Money

When you make a bad hire for an IT role, it ends up costing you big time.

Lost productivity

A poor performer won't get up to speed quickly and make meaningful contributions. Instead, they drag down team productivity as other employees spend time training and re-doing subpar work. According to recent studies, the cost of lost productivity from a bad hire can be 30-50% of their salary.

Negative impact

The wrong hire in an IT role can do real damage. They may lack technical skills or make mistakes that create security risks, bring down systems, or corrupt data. The financial and reputational cost of IT failures caused by incompetent employees is huge.

High turnover

You'll likely end up firing a poor performer, then spending more time and money recruiting and training a replacement. The total cost of turnover for an IT role can reach 200% of the salary. Ouch!

Damaged culture

A bad apple can spoil the whole bunch. The wrong hire can damage team dynamics, morale, and company culture. Their negative attitude and incompetence brings everyone else down and reduces collaboration and innovation.

Lost opportunity

Every bad hire means you missed the chance to bring in a superstar. The true cost includes the lost productivity, ideas, and growth that a highly skilled employee could have contributed.

The bottom line: take the time to find the right IT candidate, because hiring the wrong one will cost you big in the long run. Your company's productivity, security, finances, and culture depend on making a good choice.

The High Cost of a Bad IT Hire

A bad hire in IT can be extremely costly for a company. Think of the time and money invested in finding, interviewing, and training an employee. When it doesn’t work out, you have to go through the whole process again. Not to mention the loss of productivity from the role being unfilled or the new hire underperforming.

According to recent surveys, the average cost of a bad hire is over $240,000, and can reach up to $2.7 million for executive roles. For an IT position, costs tend to be on the higher end of the range. IT employees have access to sensitive data and systems, so if they make a mistake it can be disastrous. They also require specialized technical skills that take time and money to develop.

Typically, it requires at least half a year or longer for a company to start covering the costs of bringing in a new employee, as stated by Harvard Business School.

Common Mistakes Companies Make When Hiring IT

Making a bad hire is costly for any company, but hiring the wrong IT employee can be even more expensive. Here are some common mistakes companies make when hiring for IT roles:

Lack of technical expertise

If you don’t understand the technical requirements of the IT role, it’s difficult to properly assess candidates. You need IT professionals with relevant experience involved in the hiring and interviewing process. Otherwise, you may end up with someone who lacks key technical skills or knowledge.

Focusing too much on technical skills

While technical abilities are important, soft skills like communication, critical thinking, and problem-solving are also essential for IT roles. Don’t get so caught up in technical expertise that you overlook a candidate’s ability to collaborate, communicate with non-technical teams, and think on their feet.

Not thoroughly checking references

It can be time-consuming, but checking references is a key step, especially for IT hires. Ask open-ended questions to learn how the candidate performs under pressure, solves complex problems, interacts with colleagues, and so on. Look for specifics and listen for hesitations. You need a full, realistic sense of the candidate before making an offer.

Lack of hands-on skills assessment

It’s easy for candidates to overstate or misrepresent their skills in an interview. Include a hands-on technical assessment as part of the interview process to evaluate actual skills. For coding roles, that may be a programming exercise. For infrastructure roles, that may be configuring a network. A skills assessment will reveal if the candidate is truly the right fit.

Making a bad IT hire will cost you money, time, productivity, and staff morale. By avoiding these common mistakes and taking the time to thoroughly vet candidates, you’ll find an IT professional who is the perfect match for your needs. The investment in the hiring process will pay off with an employee who excels in the role.

How to Avoid Hiring the Wrong IT Candidate

Avoiding a bad hire in IT can save you time, money, and frustration. 

How to Avoid Hiring the Wrong IT Candidate

Vet candidates thoroughly

Don’t rush the interview process. Take your time to evaluate candidates through multiple rounds of interviews, checking references, and reviewing work samples. Look for relevant experience, certifications, and a proven track record of success.

Test technical skills

Have candidates demonstrate technical skills through exercises like coding tests, mock support calls or scenarios, or by reviewing past work samples. See how they think through and solve complex problems. Look for those with a knack for staying up-to-date with advancements in IT.

Evaluate soft skills

Strong soft skills are equally important. Look for candidates who are good communicators, quick learners, detail-oriented, and able to work with varying technical abilities. They should be patient, empathetic, and able to explain complex topics in an easy to understand way.

Check cultural fit

The candidate must mesh well with your company culture. Look for those with a collaborative mindset, ability to work independently or on a team, and who shares your organization’s values. The role may require interfacing with employees at all levels, so professionalism, approachability and a positive attitude are important.

Negotiate salary carefully

Be willing to pay for the right candidate, as underpaying can lead to quick turnover. But don’t get into a bidding war or overpay either. Know the typical salary range for that position and negotiate based on the candidate’s experience and skills. Consider offering additional incentives like extra vacation days, flexible work schedules or professional development opportunities.

Taking the time to find the ideal IT candidate will ensure you hire someone truly equipped to handle the complex technical and interpersonal aspects of the job. With the high costs of turnover, it pays to get it right the first time.

Conclusion

So there you have it, some sobering stats on why hiring the wrong IT employee can be an expensive mistake. The costs quickly add up between lost productivity, project delays, training replacement staff, and damaged morale. Do your due diligence in the hiring process to find candidates with not just the right technical skills but also the soft skills and temperament to thrive in your work culture. It may take more time upfront but will save you money, stress, and headaches down the road. Don't get stuck with an IT hire that ends up costing you big. Do it right the first time. Your business and budget will thank you for it.

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