Cost of a bad hire

Cost of a bad hire


There is a vast amount of information readily available online in regards to the concept of time to hire, but the flip side of this is the cost of a bad hire-how much do you know about this? 1 in 5 decision makers within a company are unaware of how much a bad hire actually costs their company! What are the implications of making a bad hire? How much is it costing UK businesses? What lessons can be learnt by making a bad hire? Here we will look in more depth about the cost of a bad hire and address ways, going forward how it can be avoided or at least limit the risk of a bad hire.

The cost of a bad hire refers to the repercussions that occur when during the recruitment process poor decisions have been made resulting in the wrong person for the job being hired. It is easy to make mistakes and once made these poor hiring decisions can be extremely costly! When a role needs to be filled within your organisation you need to follow a process to ensure you hire the right person for this role. Overlooking any of the key elements during the recruitment process can result in a bad hire: an expensive mistake to make and an even more costly mistake to then rectify. According to an in depth report conducted by the REC a bad hire for a position with a salary of £42,000 can lead to a cost of £132,015 for the company to rectify-over 3 times the salary!

You can calculate the cost to your business of a bad hire here:

Recruitment professionals, due to their experience and expertise, can help minimise the risk of a bad hire being made, but even then there is still an element of risk. The recruitment process involves investing a lot of time by all parties: the consultants’ part, as well as time spent by you, the client, many believe the time spent during the process does not have a cost-it does! By realising the cost of each stage of the recruitment process it reinforces how vital it is to be thorough from start to finish to minimise risk. Think about what goes into the process: finding the right recruitment method, working with an agency on a job spec as well as a person spec, screening CVs, scheduling and holding interviews, giving feedback, along with much more-so much effort goes into you finding the ideal candidate, every stage is of value and has a cost.

The extensive cost of a bad hire comes from multiple elements, recruiting and training costs, wages, loss of productivity-the list goes on, all of these elements add up, resulting in a huge cost to the company! The infographic below from the REC breaks down some of these elements as well as indicates a figure showing what a costly mistake hiring the wrong candidate is for a company. The infographic shows the money wasted as a result of a bad hire.

Making a bad hire, yes it is costly, yes it is time-consuming but lessons can be learnt, turn the negative experience to a positive one. Once the problem has been resolved use it as an opportunity to assess the recruitment process. Take time to identify what went wrong, perhaps rethink the current process if mistakes have been highlighted, and be sure to pay attention to each and every stage of the recruitment process. Has anything been overlooked? Has time been spent wisely? Have any corners been cut? Are all questions to consider when analysing the cost of a bad hire, finding what went wrong allows you to then minimise the risk of the same thing happening again. The one positive that comes from making a bad hire is that it allows you to take a close look at your recruitment process and put the right measures in place to avoid making the same mistakes in the future.

At iCalco we can show you ways that we can significantly help you reduce commercial downtime, increase new employee retention and reduce the overall cost to hire. 

To discuss how we can help, please call 020 8655 1600 or e-mail  quoting: BADHIRE!


sometimes hiring process is being doctor of some recruiters that's why there is some hired employee who uses the opportunity in doing bad or criminal habbits, I've experienced that before, but thank to God that I found a company that gave me everything as I expected when it comes to background check screening, and etc. Maybe you can try as well the company that I am trusting. Try to visit their website, they'll be a big help for you.
Posted on Wednesday, August 29, 2018 05:55 by charles cline

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