What Does Due Diligence in Hiring Encompass?

In the age of social media, with job applicants’ lives out in the open for all to see, do you have an excuse if your company makes a catastrophic hire?

According to CareerBuilder, nearly three-in-four employers have been affected by a bad hire. And there are other repercussions, as well:

  • The average cost of one bad hire is nearly $15,000, while the average cost of losing a good hire is nearly $30,000.
  • Two-in-three workers say they have accepted a job and later realized it was a bad fit; half of these workers have quit within six months.
  • 75 percent of workers say they’re loyal to their current employer; many fewer (54 percent) say they feel their company is loyal to them.

Sometimes when a newly hired employee is a bad fit, it turns out there was chatter across the industry about said person. For instance, a friend of mine experienced work life last year with a sexual harasser, who also happened to be wildly incompetent at his job. Yet he was hired by a reputable, well-known publishing company. After a year on the job, complaints made to Human Resources by my friend, and observations of inefficiency and low-quality work by many, he finally was let go. After he was terminated, the gossip mill in the industry that was there all along finally was revealed out in the open. It turns out he was so loathed at his previous company that his former co-workers not only celebrated when he left, they celebrated a year later on the one-year anniversary of his departure!

It may have been commendable good manners that kept this gossip from emerging until after the bad hire left, but the question is: Why wasn’t any of it known before he was hired in the first place?

It seems many people are embarrassed, afraid, or feel too bad to tell the truth when prospective employers call for references. Don’t they know there’s such a thing as damning with faint praise? If they feel bad about being the one to spill the beans on someone, shouldn’t they know, or be trained to know, they can say very little, which, in itself, says a lot? That brings me to the first question on this topic: Should you train, or prepare, your own employees to provide references, including what not to say to avoid legal trouble, and how to be honest, even when the manager giving the reference doesn’t feel comfortable detailing incompetence or poor behavior?

The second, related question is: How do you prepare managers to call for references? Are there certain initial and follow-up questions they should know to ask, along with techniques for reading between the lines?

Another discussion topic that may arise in many companies is the role social media should play in researching applicants. Facebook pages have privacy protections, but often people choose not to turn on those privacy protections or forget to do so. In those cases of a public Facebook page, is it OK to snoop and see what you find? You could discover how potential candidates converse with others in writing, and the things they express interest in. It would give you insight into people’s temperament, the kinds of people they are friends with, and their values.

Another way of doing due diligence is informally asking people you know at the applicant’s company or a professional group he or she participates in if they also know this person you’re in the process of interviewing. Legally speaking, you may be able to casually ask if anyone knows the applicant, leaving it an open-ended question, while you may not be able to ask for references without the applicant’s permission. It’s hard to imagine getting into legal trouble simply for asking, “I met someone recently who worked at your company. Do you know her?” A general question like that may be all you need to start an avalanche of feedback—good or bad. The key is keeping your inquiry to “do you know?” It becomes a different, potentially legally perilous, conversation when you start with “A person who worked at your company is applying for a job with us…” No harm just asking if someone else in the industry knows someone you’ve recently met, right?

Do you have any other ideas for getting valuable information before you hire a potentially great—or disastrous—new employee?