How to measure the true cost of a bad hire

How can technology help inform our candidate selection?

How to measure the true cost of a bad hire

A bad hire doesn’t just cost employers their reputation – it’s financially draining. According to Zappo CEO, Tony Hsieh, poor hiring has cost his organization “well over $100 million”.

And while that might be an extreme example, HR leaders are all too aware of the price of a poor hire – with half of recruiters believing bad decision-making has cost them thousands.

But, fret not – in this new world of technological advancements, surely we can rely on digital tools to help inform our choices?

When you’re measuring the ROI on investing in good recruitment technology, Matt Charney, believes it comes down to costings and metrics. Charney, chief content officer at Allegis Global Solutions, and speaker at HR Tech Summit Toronto, revealed to HRD that there’s no authentic way of measuring the “quality of a hire”.

“And there’s almost no way to see the impact of individual employees on the bottom line,” he added. “However, aspects such as turnover, productivity and satisfaction are all outcomes metrics of the investment. There all tied directly to revenue.”

Charney was quick to point out that employers turn too often to tech as a ‘be-all-end-all’ solution.

“The biggest mistake that’s made is believing the technology they’re working with is the answer – without even having posed a question,” he explained. “People will buy tech based off a perception of need or vendor promises or industry competition.

“Employers tend to follow the pack rather than looking at their own individual processes and people in order to figure out whether the issues they’re battling with can be solved with new tech.”

In essence, it comes down to where you’re placing your people in the process – rather than purchasing new tools.

To hear more about how to purchase and implement the right tech for your company, book your ticket to HR Tech Summit Toronto here.


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