The Real Cost of a Bad Hire: It’s More Than Monetary

May 25th 2023

As a hiring manager, you know that bringing the right people onboard is crucial to the success of your company. But have you ever stopped to consider the real cost of a bad hire?

It’s not just the recruitment and onboarding expenses you need to consider. In fact, a bad hire can have far-reaching consequences, across your business and team, including decreased morale, negative cultural changes, and lower productivity.

In this blog, we’ll explore the impact of bad hires in your industry and offer practical solutions to show you how to avoid a bad hire and avoid making a costly mistake.

What makes a bad hire?

A bad hire can come in many forms, such as an employee who lacks the necessary qualifications or technical skills for the job. It could also be an employee who doesn’t fit well with the company’s culture, values, and vision.

The monetary cost of a bad hire

The financial impact of a bad hire can be significant, including recruitment costs, onboarding and training costs. The Society for Human Resource Management estimates that the cost of a bad hire can range from 50-150% of the employee’s annual salary.

When you bring a new team member onboard, it’s likely they’ll take time to adapt to their role. A bad hire could take much longer than anticipated, meaning you lose productivity. This can have a snowball effect if you don’t deal with it promptly, resulting in missed deadlines, decreased revenue, and ultimately, a negative impact on your company’s finances.

The impact on your team

Onboarding the wrong person can have an impact on your full team. If the person can’t complete their tasks, it’s likely someone else will need to take over. This can result in decreased employee morale, disrupting the overall workflow.

If your team are picking up other responsibilities, you may see lower-quality work. This can then negatively impact the company’s culture as you’re likely to see a drop in mood and motivation. If the new hire isn’t a good fit with your values and work culture, it can lead to tensions and conflict among team members, leading to a toxic work environment.

The longer the bad hire stays, the more you increase the likelihood of other employees leaving due to the negative changes.

How to avoid a bad hire

EQ-i Assessment

To avoid making a bad hire, employers can take practical steps such as using the EQ-i assessment tool to measure emotional intelligence and responses. EQ-i assessments encourage successful team and individual working, enabling hiring managers to find the best fit for their teams.

Clear job description and duties

It’s important to set clear expectations with candidates regarding job duties, responsibilities, and performance expectations. You need to get this right from the start, which means it needs to be clear within your job advert, during interview and eventually onboarding.

Due diligence

It shouldn’t surprise you to know that people fabricate their skills and qualifications, so make sure you do your due diligence. This could involve background checks and speaking with several references. You can also set tasks for any potential candidate to assess the key skills that you require for the role.

Work with a recruitment company

Recruitment consultants care about finding the right fit for both sides. We can save you hours when hiring and we can help you get it right the first time. It really is worth speaking with a trusted recruiter if you’ve experienced several bad hires in a short space of time.

Want to avoid a bad hire?

Get in touch and one of our expert team will not only shave hours off your candidate search, but they’ll also find the perfect fit for your job and your team.