The Financial Cost of a Bad Hire


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The Financial Cost of a Bad Hire

Not every candidate your company considers is a potential superstar, and making a poor hiring decision can affect your bottom line.

What Constitutes a Bad Hire?

6 in 10

Employers who experienced negative effects of bad hires in 2012 (1)

Most common negative impact

37%: Hurt employee morale

18%: Damaged client relationships

10%: Decreased sales

Aside from performance, factors most likely to lead to a failed hire (2)

Mismatched skill set: 36%

Unclear performance expectations: 30%

Personality conflicts: 17%

Failure to fit into corporate culture: 14%

Don’t know: 3%


Employee turnover due to bad hiring decisions (3)

Financial Toll of a Bad Hire


Average cost to recruit, hire and train new employee (4)

Factors that determine cost of a bad hire (1, 5)

Loss in productivity

Training costs

HR costs

Interviewing costs

Employment ads for a new hire

Relocation costs

Cost of one bad hire (1)

Low-paying jobs ($18,600-$20,320): $25,000

High-paying jobs ($110,000-$130,000): $220,000

Damage Control

How can you insulate your business from the negative effects of a poor hiring decision? (3, 6, 7)

Know what you want

Before you post any opening, evaluate the job description and make sure that’s really what you want.

Pay attention to soft skills

You’ll want to know not only whether the candidate has the technical skills to complete the job but also how they will fit into your environment.

Take your time

Don’t hire just anybody to fill a spot. Make a well-considered decision.

Don’t go solo

You may make the final decision, but use your resources (HR, other employees) to make your choice.

Sell your organization

Be passionate about what your business can offer top candidates over other organizations.

Make a good offer

Got a great prospect you want to hire? Make sure your offer aligns with what motivates them.