It's hard to determine the costs associated with hiring the wrong person for a job, but few employers will denie it can get very expensive.
Have you ever worked at a job where you thought the company used the Pulse strategy of selecting new employees. This is where they check applicants for a pulse and if they have one they're hired. While this is hopefully an exageration, many companies fail to develop effective strategies to select better employees. This is especially true of smaller businesses that don't have either the in-house expertise or the budget to hire professional consultants. Yet every business can utilize basic selection strategies to improve their hiring process.
The Do List
Start with a detailed job description. Use current employees to help in this process by asking them to explain exactly what they do. Stick with observable behaviors as much as possible.
Distill the job disciption and look for behaviors that can be measured. For example, typing ability, making change, filing forms, etc.
Look for ways to measure applicant's ability to perform the job duties. The perfered method would be to use an existing test/assessment.
Closely examine each applicant's background to match the job description.
Call and verify applicant's references and previous employers (with written permission from the applicant).
The Don't List
Ask any questions related to the applicant's gender, marital status, race, age or disability unless you and your legal advisor have determined that one of these is truly related to performance of the job.
Depend totally on your or your human resource personnel's subjective opinion of an applicant.
As always, it's best to consult with a professional before planning and implementing any selection procedures to insure that they are legally defensible.