Companies waste average of $15K on ill-advised hires

December 8, 2017

Make no mistake about it: At some time in a career, everyone takes the wrong job—or hires the wrong person. Nearly three out of four employers (74%) say they’ve hired someone “who is not a good fit” for a position and realized their misstep within weeks, based on findings of a survey released by CareerBuilder on December 7.

But, when it comes to workplace bloopers, few carry as hefty of a price tag as making a wrong hire. According to the researchers, companies lost an average of $14,900 on every bad hire in the last year.

When asked how a bad hire affected their business in the last year, employers cited less productivity (37%), lost time to recruit and train another worker (32%) and compromised quality of work (31%).

The survey of 2, 257 full-time hiring managers and HR professionals—and of 3,597 full-time workers across industries and company sizes in the U.S. private sector—was conducted online by Harris Poll from August 16 through September 15.

“It’s important to note that there’s a ripple effect with bad hires. Disengagement is contagious: Poor performers lower the bar for other workers on their teams, and their bad habits spread throughout the organization,” said Rosemary Haefner, chief human resources officer at CareerBuilder. “The best thing hiring managers can do is put in the time and effort on the front end to make sure they have the best available pool of applicants for every job opening. And, just as importantly, have good procedures in place for evaluating candidates.”

But how do you know if you’ve hired the wrong person? When asked what made them think they had made the wrong decision, employers who have made a bad hire said:

  • While the candidate didn’t have all the needed skills, they believed he or she could learn quickly(35%);
  • The candidate lied about his other qualifications (33%);
  • We took a chance on a nice person (32%);
  • HR was pressured to fill the role quickly (30%);
  • We had a hard time finding qualified candidates (29%);
  • We were focused on skills and not attitude (29%);
  • We ignored some of the warning signs (25%);
  • We lacked adequate tools to find the right person(10%);
  • We didn’t do a complete background check (10%); or
  • The hiring manager didn’t work close enough with HR (7%).

What’s more, employers aren’t the only ones making regretful decisions. Two in three workers (66%) say they have accepted a job and later realized that it was a bad fit—and while half of these workers (50%) have quit within six months, more than a third (37%) have stuck it out.

Workers who said they had taken a job only to realize it’s a bad fit said they noticed their mistake based on: toxic work culture (46%), their boss’ management style (40%), a lack of match between the actual job description and the job listing and interviews (37%), and/or a lack of clear expectations around the role (33%).

While the cost of hiring the wrong person can be high, the cost of letting a good worker go is even higher. According to employers, the average cost of losing a good hire was $29,600 this year. And while 75% of workers say they’re loyal to their current employer, many fewer (54%) say they feel their company is loyal to them—and nearly a third (31%) say they are likely to change jobs in the next year.

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