For South Florida companies, the news of an expanding economy is extremely positive. According to recent data, Florida led the nation in new job creation in March, adding a total of 22,900 positions. As businesses gear up for further progress, they must work to perfect their hiring practices in order to achieve maximum success.

In any economy – good or bad – the hiring of new employees requires time, commitment and resources, and the decisions made can either improve an organization’s financial prospects or seriously damage its bottom line. In good times, the challenges are simply amplified, as the need for new employees increases – and the competition for the best talent intensifies.

First, let’s look at what is at stake. According to the U.S. Department of Labor, the average cost of a bad hiring decision can equal 30 percent of the employee’s first-year potential earnings. Some estimates put the number even higher when considering expenditures related to recruiting, testing, training, termination costs including COBRA, lost productivity and the negative impact on the workplace environment. With these expenses in mind consider a 2012 CareerBuilder.com survey – 69 percent of more than 2,400 hiring managers and HR leaders reported a bad hiring decision and negative fallout in a one-year span alone.

Hiring the wrong employee wastes money, steals your valuable time, and affect employee morale. Our company, which specializes in identifying and placing top talent at firms in South Florida, recently worked with a large financial institution that had experienced first-hand just how damaging a bad hiring decision can be. When we came onboard, we found an inexperienced senior manager had been hired to replace a respected and well-liked veteran who had retired; this new manager had lost the confidence of his team, leading to a mass exodus of employees.

To avoid costly hiring mistakes, focus on the following key issues to start:

Professionalize the Hiring Process: Finding and hiring new employees to fill your company’s jobs is a job in itself, and it should be treated as such. Just as many businesses seek outside legal and marketing guidance, organizations are increasingly looking to professional recruitment and hiring experts to locate the best talent. Regardless of whether you seek outside assistance, it is critical to create a process that works efficiently, with clear guidelines about who will interview candidates and who will make the ultimate hiring decisions.

Set Expectations: Make sure new hires are fit for the job by clearly defining the responsibilities involved and the skills required. Employers must set clear expectations for new employees regarding work load, hours of work, and career growth opportunities.

Clarify Compensation: Misunderstandings, miscalculations and poor communication about compensation can lead to wasted time, often putting the wrong job candidates in line for your company’s open positions. To ensure you are hiring the best person for the job, be willing to pay the appropriate amount, and be clear up front with candidates about the compensation range.

Be Timely: All too often, companies desperate to fill a suddenly-vacant position will snap up the first person available without being certain that he or she meets expectations. While it is critical not to make this mistake, it is just as vital not to hesitate to make a decision quickly when the right candidate emerges.

Consider Temp to Perm: One way to minimize the risk of a bad hiring decision is to proceed on a temp to perm basis, essentially allowing both parties to test the waters before the deal is finalized. While there are still costs involved, the temp to perm arrangement can help identify motivated candidates, and can ease their exit should the unfortunate need arise.

Great businesses are built over time by great talent. Finding the best for your company requires insight and effort, but the rewards will be felt for years to come.

Gustavo Peña is Managing Partner of Ascendo Resources, an award-winning firm that places accounting, finance, banking, compliance, healthcare, IT, HR & administrative professionals in workplaces throughout Southeast local markets.