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Researching the cost of a bad hire will result in many results and statistics from all over the globe. Whatever research and details you decide to focus on, one thing is abundantly clear: organizations that make bad recruitment choices suffer. As a result, there is even greater pressure on HR and recruitment professionals to make the best hire possible, especially in today’s job markets. Anything less than a perfect fit will cost a company more than monetary value. Yet, organizations rarely ever compile all the data to accurately calculate the actual cost of a bad hire and its systematic impact. It’s crucial for businesses to have a firm understanding of all the potential ramifications caused by inaccurate hiring—its initial impact, the ripple effect it creates, and the resulting cost.

First, consider some key factors that result in a higher cost. These factors are based on prominent positions in a company, the time the individual is active, and the amount of training invested in the hire. Financially speaking, significant studies show that all the expenses invested in recruitment, salary, and retention of a bad hire can cost a company over $200,000 for senior positions.

The U.S. Department of Labor states that a bad hire can cost as high as 30% of the position’s first-year earnings, and 74% of companies state they lost an average of $15,000 for each bad hire. Looking at these stats, we quickly conclude that the monetary cost of a bad hire is steep. But a bad hire doesn’t just affect an organization’s coin purse, it also hurts key factors within an organization that is directly connected to productivity and success.

For one, a bad hire disrupts the productivity of your staff and adds more stress to the lives of your employees. If a new hire cannot fulfill their duties effectively, there will be a hindrance in meeting the deadlines and completing tasks. In these situations, It’s common for other staff members to “pick up the slack” of a bad hire, adding their responsibilities to their busy schedule.

To make matters worse, a bad hire won’t be able to integrate with team members fully, creating dissonance and a lack of cooperation. Team members will avoid working with a bad hire; in addition, a bad hire will actively try to get out of any work.

Your company’s reputation is also on the line when you make poor recruitment choices. In our modern times, the internet is where most people will first check for job leads. Many websites that provide job postings also focus on giving company ratings and reviews that employees and anonymous individuals created.

This puts a company’s reputation in a vulnerable position where a bad hire’s malcontent can reach a large audience and cause significant problems. Because of these reviews, companies can lose many great opportunities to hire talented candidates. Once your reputation is tarnished, recovering before its effect takes root can be difficult. Furthermore, a terrible consequence of having a bad reputation is that employees will begin to distance themselves from the company and even start looking for new work opportunities.


To make matters worse, a bad hire won’t be able to integrate with team members fully, creating dissonance and a lack of cooperation. Team members will avoid working with a bad hire; in addition, a bad hire will actively try to get out of any work.

Your company’s reputation is also on the line when you make poor recruitment choices. In our modern times, the internet is where most people will first check for job leads. Many websites that provide job postings also focus on giving company ratings and reviews that employees and anonymous individuals created.

This puts a company’s reputation in a vulnerable position where a bad hire’s malcontent can reach a large audience and cause significant problems. Because of these reviews, companies can lose many great opportunities to hire talented candidates. Once your reputation is tarnished, recovering before its effect takes root can be difficult. Furthermore, a terrible consequence of having a bad reputation is that employees will begin to distance themselves from the company and even start looking for new work opportunities.

The truth is it’s inevitable for all organizations to make mistakes in recruiting and hiring. When faced with a bad hire, the next reasonable course of action is finding solutions that will facilitate progress and establish processes to help your organization recover. Communication and addressing the issue is the first step to establishing a respectful understanding  – the initial goal should be to try and resolve issues, working towards positive outcomes for the company and the employee.

It’s also important that the individual can give feedback on their experience so the company can understand the full scope of the situation. Perhaps reassignment could be an effective solution. If not, the feedback will provide helpful insight to promote better recruitment in the future.

Organizations should also assess the financial impacts of keeping the hire or letting them go, for you may find it cheaper to keep the hire and invest in job training instead. But, If there is no hope of fixing the relationship, termination should be swift.

In closing, a bad hire creates a situation that benefits no one. Putting more focus on qualitative recruiting will save organizations from this issue. Greater attention should be given to a company’s culture to help determine if a candidate can effectively integrate and contribute to your workplace.

Recruiters need to be able to go beyond a candidate’s resume and skillsets to discover insight into personality, values, social interactions, and unique characteristics to make the best decision possible.

Delve Content Team

Author Delve Content Team

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