Bad Hires Cost Companies $25,000 (or More)
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CREDIT: You're Fired image via Shutterstock
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Hiring the wrong person costs businesses thousands of dollars a year, new research shows.
A study by CareerBuilder revealed that, among employers who were adversely affected by a bad hire this year, 41 percent estimated the cost to be over $25,000, with 24 percent losing more than $50,000. Overall, hiring the wrong person has negatively affected nearly 70 percent of businesses.
"Whether it's a negative attitude, lack of follow-through or other concern[s], the impact of a bad hire is significant," said Rosemary Haefner, vice president of human resources at CareerBuilder. "Not only can it create productivity and morale issues, it can also affect the bottom line."
The study found that the most common effects of a bad hire include a drop in productivity, lost time, the cost of recruiting and training a replacement, a decrease in employee morale and potential legal issues. In addition, the wrong hire can give clients a negative impression of the company.
Employers cite a number of reasons for hiring the wrong person, including, most commonly, a rushed decision process. More than 40 percent of those surveyed said their company made a poor hire because they needed to fill the job quickly.
Employers also blamed poor sourcing techniques, not checking references and a lack of quality recruiters for hiring the wrong candidate.
However, more than a quarter of those surveyed said they weren't sure why they made a bad hire and said sometimes they just make a mistake.
When classifying what makes someone a bad hire, employers reported several behavioral and performance-related issues, including:
- Employee didn't produce the proper quality of work.
- Employee didn't work well with coworkers.
- Employee had a negative attitude.
- Employee had immediate attendance problems.
- Customers complained about the employee.
- Employee didn't meet deadlines.
The research was based on surveys of 2,494 hiring managers and human resource professionals.
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