The Real Costs Of Hiring The Wrong Candidate

By Howard Kesten

About 25 years ago I was fortunate enough to be invited to conduct a few executive searches for two well-known and highly respected aftermarket industry executives; Steven Berman and his brother, the late Richard Berman. Steven and Richard were the founders of R&B Automotive, which is Dorman Products today. The meeting was inspiring and uncharacteristic of what I typically experienced when I met with a new client.

Whereas many of the clients we worked with at that time had used candidate compensation information as their initial screening tool, Richard and Steven did not concern themselves with compensation and only wanted to meet the most qualified people, regardless of the cost. They believed that great people made great companies and that they would always find the money to hire the best people. Of course, as we all know, Dorman went on to grow exponentially and they continue to set the bar for many other aftermarket companies.

We were very influenced by Richard and Steven. To the degree that we can, we continue to urge our clients to hire the absolutely best people whenever possible. In those instances where a company has taken a hard stand on compensation, or they want to short cut the search process, we typically decline the work.

All that being said, whether you do the search yourself or you outsource it, hiring the wrong executives or employees for any of the wrong reasons is a formula for disaster. Some of the wrong reasons might include:

  • Feeling that you need to promote from within, even when there is no one qualified
  • Only hiring people that fit into your pay scale
  • Hiring people with great potential but don’t have the ability and experience to do the job when you first hire them
  • Hiring people who are the most available versus the most qualified
  • Hiring only local people because you don’t want to invest in relocating better people
  • Hiring people that answered your ad because you just don’t have other people to choose from
  • Hiring people with the relevant experience, but who have demonstrated mediocre performance

Breaching the search process and hiring the wrong people can be much more expensive than hiring the right people with possibly higher compensation needs. Let me give you an actual example of what it recently cost one of our new clients who made a poor hiring decision last year.

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