The Cost of A Bad Hire on Your Accounting Team
What is the Meaning of Bad Hire?
A bad hire refers to an employee who lacks the required skills, qualifications or fit for their role, resulting in subpar performance and negative impacts on the organization.
Imagine hiring a new member of your accounting team who seemed perfect on paper but turned out to be a bad hire. They came with an impressive resume and glowing references.
But as the weeks go by, you start to notice concerning patterns – missed deadlines, sloppy work, and a general lack of enthusiasm. Suddenly, it dawns on you: maybe this new hire isn’t all you thought they were.
Making the wrong hiring decision, especially for a critical role on the accounting team, can have far-reaching consequences for your organization.
A bad hire can manifest in different ways, such as:
Poor Performance: Consistently underperforming, failing to meet deadlines, and producing work below the expected quality standards.
Lack of Fit: Their skills, personality, or work style clash with the company culture or the dynamics of the team they’ve joined.
Attitude Issues: Exhibiting negative behaviors like a lack of motivation, resistance to feedback, and general disengagement from work responsibilities.
While some bad hires may be the result of an honest mistake or miscommunication during the hiring process, others can stem from deeper issues, such as inadequate screening, rushed decisions, or a failure to accurately assess the candidate’s fit for the role.
The Cost of A Bad Hire on Your Accounting Team
Hiring the wrong person can be a costly mistake, as reported by Business News Daily. In fact, a bad hire can cost up to $17,000, and this cost increases with the seniority of the position.
However, the impact of a poor hiring decision goes beyond just monetary loss.
Productivity Suffers
Accountants need a high level of proficiency across multiple disciplines. They need to be able to manage their time, comb through minute financial details, and understand how to track everything accordingly.
If you hire someone who can’t handle the fast pace, understands your standard processes, or doesn’t know how to create or implement one – you’re in trouble.
For example, you may find duplicate financial information that skews your reports, causing other employees to fix the mistakes resulting in overtime and resentment. Even worse, an error may not get caught until it’s too late.
These problems can spiral out of control, costing your company hundreds of hours of productivity. That’s why pre-employment skills testing is essential for key accounting roles.
Teamwork Is Lacking
Businesses thrive on teamwork. When employees enjoy working together, the workload seems to be spread appropriately, and team morale is high. But if you hire an employee who doesn’t fit the team vibe very well, your cohesive unit may start to crumble.
While it’s impossible to always know how someone will work out after they come aboard, there are ways to measure behavioral traits before you actually bring them onto a team. Behavioral tests used during the hiring process are one of the cost effective ways you can evaluate potential hires before giving them final approval.
Customer Retention Slides
Your customers expect a certain level of consistency and professionalism, and you want client-facing employees to share the same values, respect, courteousness, and attitude toward customers that you would personally have.
Without the right service skills, customer interactions could turn sour and poor reviews could come flooding in.
Not only is this dangerous from a public perspective, but it’s disheartening to watch your brand be tarnished by someone who wasn’t the right fit.
Compliance Regulations Fail
There’s no way around it: If your company’s record-keeping doesn’t comply with all federal, state, and local authorities, you could be in big trouble. And your accounting department plays a major role in this process.
When accounting team members don’t pay close attention to government regulations, don’t file documents on time, and don’t know which other ways they need to be compliant, your company could suffer.
How to Avoid a Bad Hire on Your Accounting Team
Hiring the right talent for your accounting team is crucial for maintaining accuracy, compliance, and overall productivity. To avoid the costly consequences of a bad hire, consider implementing the following strategies:
1. Conduct Thorough Background Checks
While impressive resumes and glowing references are certainly important, they don’t always tell the full story. That’s why it’s crucial to conduct thorough background checks on all potential hires.
Verify their employment history, educational credentials, and any professional certifications or licenses they claim to hold. A little extra due diligence can go a long way in avoiding costly hiring mistakes down the line.
2. Prioritize Soft Skills
While technical accounting skills are undoubtedly essential, don’t overlook the importance of soft skills like communication, time management, and attention to detail. These skills can often make the difference between a good accountant and a great one.
During the interview process, ask situational questions that allow candidates to demonstrate their soft skills in action. For example, you might ask them to describe a time when they had to meet a tight deadline or communicate complex financial information to a non-technical audience.
3. Use Pre-employment Assessments
Implementing pre-employment testing, such as cognitive abilities testing, into your hiring process is one step toward avoiding the probability of such hiring mistakes.
Cognitive and reasoning tests and basic accounting knowledge skills assessments can be useful for prospective accounting hires. An applicant can have the perfect resume listing every skill you’re searching for, but you need to know that they can execute those skills – or learn them efficiently.
The use of automated, technology-driven processes grows each year, but 57% of accountants found technology literacy to be the most critical skill for accounting staff, according to Sage. You need someone with basic tech skills, at a minimum, to manage your workflows.
While that’s simply one example, if the skills and reasoning abilities aren’t there, pre-testing candidates will save time and will weed out people from your pipeline more quickly.
Saving The Day One Hire At A Time
According to the Department of Labor, the cost of a bad hiring decision is typically around 30% of that individual’s expected first-year salary. That’s huge!
Instead of rolling the dice, pre-employment skills testing makes hiring more data-driven and less opinion-based.
Testing for cognitive abilities, behavioral traits, accounting knowledge, and overall critical thinking skills will give you more information about each candidate, which will help you make more informed, data-driven hiring decisions.
Remember, a bad hire isn’t just a headache—it’s a potential financial and cultural drain on your organization. Don’t leave your accounting team’s success to chance. Invest in the right hiring tool, such as pre-employment tests, and watch your business thrive.