Costs of a Bad Hire: How Hiring Mistakes Impact Your Business

One of the most expensive mistakes that many businesses tend to make is hiring the wrong person.

While larger companies usually have HR departments dedicated to the hiring process, it’s still very possible for a mistake to be made and a bad hire to be brought onto the team.

Depending on the seniority level of the position, a bad hire can cost a company anywhere from 30-100% percent of their current salary to replace

In a recent CareerBuilder survey of 6,000 Hiring Managers and HR professionals, 27% of U.S. employers said that a single bad hire cost them more than $50,000.

Here’s a breakdown of the surprising costs resulting from a bad hire to give you an idea of just how expensive and detrimental even one hiring mistake can be to your business.

What are the costs associated with a bad hire?

1. Interview and training costs of a bad hire

When you bring in a new employee, you are investing in that individual. This often includes an interview process, which can get expensive fast especially if you need to fly in a remote candidate.

That, coupled with orientation, specialized certification classes or programs, and on-the-job training can start to add up.

All of these items are essential for getting a new employee up to speed, but if you’ve made the wrong hiring decision then you’ve wasted valuable resources that you’ll need again for the replacement.

2. Loss of productivity costs from a bad hire

When it becomes clear the new hire is unable to perform to your business’ standard, managers end up spending their valuable time training and retraining the employee, resulting in a loss in productivity — not only for the bad hire but for the senior supervisors as well.

According to a study by Robert Half, CFOs said that supervisors spend around 17% of their time, which equates to nearly one day per week, managing poorly performing employees like bad hires.

Bad hires also often result in fewer sales, which are additional costs to tack on to the overall loss of productivity costs.

3. Employee morale costs caused by a bad hire

Ineffective hires result in lowered employee morale as the rest of the team now has to pick up the slack, which can cause your valued employees to become dissatisfied or disengaged.

A bad hire not only affects your business’ bottom line, but it can also cost you your valued employees if their workloads become unmanageable while you try to fill the gap after letting an ineffective hire go.

And given the fact that replacing a bad hire typically takes around five weeks on average for staff-level positions and seven to eight weeks for a management position, these costs can begin to snowball.

4. A bad hire can damage your company’s reputation

Today, your business’ reputation as an employer is crucial to attracting the talent you desperately need.

A bad hire can result in negative reviews of your brand or business from current employees on sites like Glassdoor, as well as on discussion forums and social media sites like LinkedIn, Facebook, and many others.

Generating enough positive content and reviews to counteract the negative reviews can take anywhere from a few months to nearly a year depending on the severity of the reviews and the amount of reviews and engagement your business typically receives.

If you don’t normally receive many reviews, the damage can be nearly impossible to undo.

Not only do these reviews hurt your overall reputation, they can also cost you top-tier talent who pass on employment opportunities available at your company due to poor reviews, resulting in a vicious cycle of being unable to attract the talent and skillsets you need.

How to avoid a bad hire

Avoiding missteps in hiring is easier than you think once you strengthen your hiring process with these proven strategies to avoid a bad hire.

If you’re still not finding the highly qualified talent you need after incorporating these strategies, then the pool of talent you are reaching may be too limited to meet your specific needs.

To tap into a more qualified pool of talent that your business needs, consider contacting a professional recruiting agency like Mondo

We’ll help find you the highly qualified talent you need, but might not have access to currently. 


Mondo Matches Great Talent With Great Companies

With an expansive, connected network of the top IT, Tech, Creative, and Digital Marketing professionals and a proprietary process, Mondo can match you with the hard-to-find, specialized talent you need.

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