The Cost of Bad Hiring: Risks to Business Success

Hiring is a multifaceted process, involving posting positions, conducting interviews, and finding the right fit for a company. The cost associated with a bad hire is a crucial consideration, making it important to understand the potential harm such a decision could cause to a company. This content provides insights into the consequences of a bad hire.

Examining data from senior managers, the average loss due to a bad hire is approximately $14,900. However, for higher-level positions and supervisory roles, this cost can escalate to as much as $240,000. Alternatively, research from the U.S. Department of Labor indicates that the average cost of a bad hire can be up to 30% of the employee’s first-year earnings.

Various factors contribute to these costs, including expenses related to hiring, recruiting, training, and eventual replacement of the unsuitable employee. Additionally, there is a loss of productivity across the team, stemming from disrupted workflows, increased stress, and potential declines in teamwork efficiency due to diminished morale. Indirect costs such as legal fees, unsatisfied clients, and damage to the company’s reputation are also significant considerations.

The infographic below highlights warning signs to identify an ill-suited employee, including frequent lateness, rising absenteeism, constant complaints about work, and a growing lack of respect for management. Refusal to acknowledge mistakes or repeated errors is also cause for concern.

occupational health services

The Cost of a Bad Hire from Employers Choice Screening, a provider of occupational health services

Sophie Green: Sophie's blog focuses on e-commerce strategies and trends. Her background as an e-commerce entrepreneur informs her insightful posts.

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