What Is the Cost of Hiring Bad Employees?


At some point most business owners realize they have made a bad hiring decision. The employee may have poor customer service skills or frequent tardiness. Bad hires tend to have a ripple effect in business.

According to CareerBuilder, on average each year, 69% of employers are negatively affected by a bad hire. The costly adverse effects may shock you. 

What is the actual cost of hiring bad employees. 

For 41% of business owners a bad hire cost them a minimum of $25,000.00, and 25% of business owners say that it cost them $50,000.00.

Bad employees hurt productivity and can cause a loss in sales and/or damage customer relationships. After firing a bad employee, recruiting, hiring and training a new employee costs the company time and money.

Why do bad hires happen?

According to a survey from CareerBuilder, the biggest reason for bad hires is the need to fill a position immediately.

Although having an open position takes a toll on the company, hiring a bad employee is actually worse. There is no financial benefit of hiring an employee just to fill a position quickly.

Other reasons for bad hires include:

·         Insufficient recruiting

·         The need to adjust sourcing techniques

·         Fewer recruiters needed to review applicants

·         Failure to conduct reference checks

·         Lack of a strong employment brand

How can you avoid hiring the wrong person?

Create a job ad that specifically states what skills are needed. Be specific in the ad so you can attract candidates that have the skills you seek and who can be immediately effective on the job.

Prepare a list of interview questions that pertain to the position. Don't ask generic questions during the interview.

Gather feedback from existing employees. Ask current employees what kind of person they would want to work with and include those qualities when searching for the right candidate.

Google the candidate and see what comes up. Check social media accounts and posts for any red flags.

Do a second interview. Although this may be time consuming, it will refresh your memory on the candidate and help reveal more of their character traits.

Conduct reference checks. Call the candidates most recent employer and ask to speak with a manager or supervisor who worked with the candidate.

Business owners want to hire the right person and a great deal of time and energy goes into this process. In the long run, taking the time to find long-term employees will help keep turnover down and save the company a great deal of money. HR Advisors offers full cycle recruitment services, please contact us for more information!


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