woman interviewing man in office
Hiring a candidate too quickly can come with a hefty price tag. — Getty Images/FluxFactory

The cost of hiring the wrong person is astronomical. By some estimates, the wrong hire can cost a business up to 2.5x the salary — easily over $100,000. That’s a mistake many small businesses simply can’t afford to make.

However, hiring the right employee is harder than it looks. According to a 2017 State of Small Business Report, 50% of small business owners reported that hiring new employees was their number one challenge. Unemployment is lower than it’s been in years, meaning the competition for the best candidates is steep. Small businesses may feel they have to hire anyone, rather than compete for the right person against the resources and benefits of a larger company.

Nevertheless, there are ways to make sure your next hire is going to be a good fit for your team. Avoid hiring a bad employee by taking these steps to improve your recruiting process.

Be specific about what you need

Often, a bad employee isn’t a bad worker; rather, that person may just be the wrong one for that particular job. This can result from the employer not being clear about what is needed during the hiring process. “One of the common hiring mistakes employers make is announcing they’re hiring without first determining the essentials of the position and writing a detailed job description,” says one hiring expert.

[Read: Looking to Hire Fresh Talent? The Key Is an Engaging Job Description]

Think about what skills your employee must have before posting an open position. A clear job description should be detailed and outline the duties and skills needed to perform. Know what character traits you are looking for, as well as the skills needed from the start vs. those you are able to train. If there are specific requirements, like availability to work on weekends, make sure to mention those up front. You may get fewer, but more qualified candidates as a result.

An interview can be used to make sure the candidate is who they say they are, and also assess if they have the background to be successful at your small business.

Use the interview to learn more

Unfortunately, nearly 50% of candidates lie on their resumes, so relying on them to tell you if a candidate is qualified is an inefficient way to make a new hire. It’s critical to add an interview step to your hiring process.

[Read: 'Why Should We Hire You?': Best Job Interview Questions to Ask Candidates]

An interview can be used to make sure the candidate is who they say they are, and also assess if they have the background to be successful at your small business. Ask them questions to find out if they have the right attitude. Have the candidate talk about a situation in which they would have used the skills you need.

Ask for referrals

Word-of-mouth marketing is one of the most powerful ways to get customers. Why not leverage the same tactic for finding your next great employee?

The stats don’t lie: Candidates who have been recommended by existing employees tend to stay longer and have higher than average job satisfaction. Referral candidates get the gold star from most employers, too, with 70% finding that referrals fit the company values better, according to research from Jobvite.

Existing employees, loyal customers and those within your personal network are all great sources for referrals. When a member of your team does recommend someone great, give them a bonus or perk to show your gratitude.

Avoid the “warm body” excuse

One of the biggest reasons why small business owners end up with bad employees? They rush to make a hire. The idea that a “warm body is better than no body” leads employers to hire the next person who walks through the door. Focus on value rather than on time constraints. Remember the costs associated with hiring a bad employee, stick to a job description and take the time to interview everyone. It will benefit your business in the long run.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

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