Here’s How Hiring For Experience Is Wasting Your Money

Here’s How Hiring For Experience Is Wasting Your Money

It’s no secret that bringing in a new employee is expensive. Beyond the employee’s base salary, there are also recruitment costs, taxes, benefits, space and other equipment, and of course – probably the most valuable of these – the time you dedicate to recruiting, interviewing and training. Depending on the role you’re hiring for, the cost of bringing on a single new employee can range anywhere from $20,000 for junior level positions up to three times your new hire’s first-year salary for more senior positions.

Leadership IQ, a global leadership training and research company, followed over 5,000 hiring managers who hired more than 20,000 new employees during the study period of three years. The study found that 46% of new hires fail within the first 18 months. Being as conservative as we can with estimating this cost, that comes out to about $184 million in hiring costs. On top of the $184 million, of course, are the actual salaries paid out to those 46% who won’t stick around. Bad hires cost a lot of money! Luckily, this study offers insight into how to stop making bad hires as well.

The vast majority of hiring managers hire for experience. Their interview focus heavily on the technical skill-set. Here’s the problem with that: technical skill and previous experience have almost no correlation with future performance and success. In fact, Leadership IQ concluded that only 11% of those failed hires were unsuccessful based on technical skill. Time and again research highlights this to us – so stop interviewing for skill and experience! It doesn’t work and it’s costing you money.

So if those employees didn’t fail because of lack of skill – then why did they fail?

Coachability and Emotional Intelligence

This was the most commonly cited reason for unsuccessful hires. No matter how skilled a new hire is, you’re going to have to do some training with them. If they aren’t coachable, it’s not going to work. An interview built around experience/skills tells us nothing about emotional intelligence and coachability. To get insight into these areas, we really need to design a strong behavioural-based interview process with multiple questions that focus on these qualities. It’s also important to get insight into an individual’s learning style and capacity to learn. A cognitive assessment tool can help provide insight into these particular qualities of your candidates.


Your business moves fast, and you need employees who have sufficient drive to move with you. This is another critical area to focus on in the interview. What drives the person being interviewed? Do their goals align with the company’s goals? Does the work excite them? You could hire the most skilled engineer in the world, but if she doesn’t care about your product, she probably won’t be inspired to bring her A-game. We covered this in more detail on a recent blog post about intrinsic motivation.


If a new hire doesn’t have the right attitude and personality for the role and the organization, success is unlikely. A good assessment tool will help to define the temperamental requirements of the role, so you can structure your interview based on how they stack up. It’s important to thoroughly explore any gaps that exist to better understand if your candidate has the temperament to be successful in your company.

Bad hiring decisions are expensive. When the company was about 10 years old, Tony Hsieh, CEO of Zappos, said that the biggest mistake he could reflect on was hiring the wrong people. He estimated that making bad hiring decisions had cost the company well over $100 million. Even small companies can spend millions on bad hires – so stop interviewing and hiring solely for experience. Experience isn’t always the key to a successful hire, and it could actually be costing you money!


Share this post


No comments yet.

Leave a Reply:
Please enter a valid email address
Please enter your comment