The Cost of a Bad Hire: A Must-Read for HR Managers, Hiring Decision Makers, and Business Owners

the cost of a bad hire

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When a job opening becomes available within an organisation, there is usually an urgency to fill it quickly. However, rushing to fill the vacancy can lead to poor hiring decisions that won’t benefit your business in the long run. Although it is understandable to want to hire someone as soon as possible, poorly thought out decisions can cause a lot of problems. In this article, we will break down the impact of a bad hire, from financial costs, to staff morale, productivity and turnover. We will also include ways in which you can minimise the risk of a bad hire.

The financial cost of a bad hire.

A report by the Recruitment & Employment Confederation (REC) highlighted the financial toll, and the results were high. According to the REC, a bad hire, at mid manager level, with an average salary of £42,000 can cost the business over £132,000, due to the impact on costs from lost productivity, training and management expenses, and the need to find and recruit a replacement. This highlights the importance of an informed approach when it comes to making hiring decisions.

However, the financial implications extend beyond the direct costs of rehiring and retraining. Consider the lost costs of onboarding, the potential for a decline in morale among your team, and the ripple effects of reduced productivity. Each of these factors can contribute to a significant financial strain on your business, underlining the importance of getting the right hire first time.

What other areas of my business could a bad hire affect?

The cost of a bad hire isn’t just about the financial losses, it can ripple through all aspects of your organisation. Let’s take a look at some of them:

Team Morale and Productivity

Introducing a poor candidate into your team can disrupt the dynamic, affecting morale and productivity. If the new hire is unable to integrate effectively or shows a poor work ethic, it can lead to frustration among your existing team, potentially causing a decline in overall team performance, engagement and could lead to unwanted resignations.

Company Culture

Company culture is shaped by the attitude, behaviours, and values of your team. A bad hire can negatively impact the culture, especially if their values clash with those of your company. The resulting friction not only dampens spirits and the want for collaboration but can also lead to a decline in your workplace environment. If your company culture starts to become negative, words can travel fast. This could lead to fewer people wanting to join the company, making hiring the right people more difficult.

Customer Satisfaction

In roles that involve customer interaction, a bad hire can have a direct impact on your brand’s reputation and customer satisfaction levels. Poor customer service or inadequate performance can lead to lost sales, negative reviews, and long-term damage to your brand image. Some of these relationships may have taken years to build, so you want to make sure the person you are about to welcome into the team is a good fit.

How do we minimise the cost of a bad hire?

Hiring the right people is important for a business to do well and grow. But, finding the right person can be tricky. One wrong hire can cause a lot of problems, not just financially, but also with how content and productive your team is. So, it’s really important to know some good ways to make sure you’re hiring the right people.

Let’s take a look at some:

Encourage Open Feedback

Encourage open lines of communication and regular feedback within your team. Early detection of any issues allows time for interventions, whether it’s additional training or a refresh of expectations. This can prevent minor problems from escalating into costly mistakes.

Have a Strong Onboarding Process

A strong onboarding program can reduce the impact of a potentially bad hire by providing clear expectations and support right from the start. Effective onboarding improves new hire retention and productivity, providing them with the tools and knowledge to succeed in their role.

Behavioural Assessments in your Hiring Process

Recognising the impact a bad hire can have on your business highlights how important it is to have a robust, data-driven recruitment process. This is where our recruitment services shine. By integrating behavioural assessments into our candidate evaluation process, we provide you with detailed insights into a candidate’s potential fit within the role, your team and alignment with your company values.

These assessments go beyond the traditional CV and interview approach, offering a data-backed evaluation of a candidate’s behavioural traits and work style. This means you can make informed hiring decisions that are based not on gut instinct but on objective, predictive data.

Want to know the full cost of a bad hire?

Our team have put together a ‘Cost of a Bad Hire’ calculator so you can see the full financial impact a bad hire can have on your business. Download your full report here.

How can we help?

Hiring the wrong person can be expensive. It’s not just about the money; it can make your team unhappy and negatively impact your company culture. It’s tempting to just go with your gut when hiring, but that can lead to mistakes. Our recruitment process uses detailed behavioural assessments to help you avoid those risks. With a 93% retention rate*, we’re confident we can help make your hiring process better and save those costly mistakes. ( *Statistics taken over the first 12 months of employment.)

Our assessments go beyond what’s on paper, so you can be sure you’re hiring someone who truly fits in with your team, goals and organisation.

Don’t just trust your gut. Let us help you make smart, informed hiring decisions.. Get in touch with us at or call 0161 870 5000 to learn more about how we can help.

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