How to Recover From a Bad Hire at Your Small Business

July 29, 2016 Pete Jansons

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As a small business owner, you undoubtedly realize the importance of every new worker to your limited-size team. Finding out you made a bad hire – someone who lacks the ability or motivation to perform up to par, or fails to fit with company culture – can feel devastating. Instead of dwelling on regret, however, leaders must focus on recovery in order to curb the damage. Right the ship at your small business with these actions:

Figure out the root of the problem.

Pinpoint why this person isn’t working out. Does the individual truly lack the skills necessary to hold the position? Is his or her personality or work ethic annoying others or putting a damper on productivity? Might a personal issue be responsible for tardiness or distraction?

Once you identify the culprit through observation and/or a serious heart-to-heart with the new hire, think about solutions. Perhaps supplementary training, additional support from you, or assistance from a mentor could prove beneficial. Maybe there’s another open position within the company that might be a better fit for the person.

Do what needs to be done.

If conditions do not improve, dismissal may be the best option. Small business leaders have too much on their plates already to constantly hold an employee’s hand, and other team members quickly tire of spending their valuable time making up for someone else’s shortcomings. Yes, it hurts to admit that you made a hiring mistake, but it will be even more painful to watch your small business suffer just because you hate to fire someone. Data shows that the average cost of a bad hire can often be five times that person’s annual salary. Cut your losses now and get back to growing your small business.

Think before rehiring.

Treating the situation as a learning experience won’t ease all the sting, but it can set you up to make better decisions in the future. Try determining what went wrong. Out of eagerness to fill the position quickly, maybe you failed to check references or to really hash out the qualifications needed for success. Perhaps modifying interview questions or requiring actual demonstration of certain skills could provide greater insight before making a hiring decision.

Because every small business has its own vibe, examining existing staff can be beneficial. Look at successful people on your team for clues as to the best traits and talents for your workplace. Then seek out these attributes in future employees. Also, consider soliciting input from your employees. Working so close with one another, staff members may be able offer unique perspective on what went wrong with this hire and how a better match might be made the next time around.

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