How Much A Bad Hire Will Actually Cost You

Congratulations! Your startup is seeing some seriously rapid growth, but make sure you fill in the gaps with the right people because a bad hire might cost you more than you think.

What's The Cost?

Out of more than 6,000 hiring professionals worldwide, more than half said they have felt the effects of hiring someone who turned out to be a poor fit for the job or who did not perform it well.

How You'll Pay For It

A bad hire will cost more than just lost money.

Why Are You Making These Hires

Filling new positions quickly with the wrong people could ultimately end up costing you.

The Worst Employee Habits Unveiled

If your employee fails to produce the proper quality of work, it may be time to cut ties.

There Is Hope

It may be worthwhile to consider ditching the traditional job interview process.

Check References

One bad reference isn't the be-all and end-all, but calling a few contacts should alert you to any red flags.

Infographic: How Much A Bad Hire Will Actually Cost You

Congratulations! Your startup is seeing some seriously rapid growth, but make sure you fill in the gaps with the right people because a bad hire might cost you more than you think.

Zappos CEO Tony Hsieh endeavors to raise the perfect Zappos "family."

That’s why he ditched his company’s old corporate structure; it’s why he offers new hires $2,000 to leave the company; and it’s why he practices the policy of hiring slowly and firing quickly.

So where did this obsession with fostering this culture come from?

According to Hsieh, his past bad hires have cost his company “well over $100 million.”

That’s not surprising, considering the results of a recent CareerBuilder survey.

Out of more than 6,000 hiring professionals worldwide, more than half said they have felt the effects of hiring someone who turned out to be a poor fit for the job or who did not perform it well.

Twenty-seven percent of the U.S. employers surveyed said that just one of these bad hires cost their company more than $50,000.

“When you add up missed sales opportunities, strained client and employee relations, potential legal issues, and resources to hire and train candidates, the cost can be considerable," says CareerBuilder CEO Matt Ferguson.

While your business may not be making the headlines, a bad hire could still seriously cost you. But, as luck would have it, there are ways to avoid the sticky situation and really hire for growth.

Check out this infographic slide show compiled by online training platform Mindflash for more insight into the cost of a bad hire and what you can do to avoid it.

[Image via Shutterstock]

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2 Comments

  • We have developed a system by which you don't have to reply so heavily on interviews (yuck, no one likes them) and references. (yuck again, we are all hog tied, legally.) We rely on having people work their way through a screening process to show us their behavior before we talk to them. Since we hire for skills and we fire for behavior, we need a quick way to know what someone is really like. Add an assessment to the mix of those that appear to have the behavior we want and we know if we have a job match before we ever take the time to talk with them. The result: better hires, better interviews, better results. Ruth (failproofhiring.com) ps: love the infographic slideshow!

  • Focusing on college degrees instead of aptitude and skills is the fool's errand many companies still practice. I once worked for a warranty company who hired people whose job was to type all day without asking much less testing to find out if they actually knew how to type. They hired someone to add numbers who didn't know how to use a calculator. That is one obvious issue some companies have.

    There are many others - such as poor training and promoting based on the 'peter principle'. (When someone gets promoted into a position they do poorly they leave them there. The wise employee requests a demotion back to a position they were good at instead of staying in what they hate.)