Counting the cost of a single bad hire

by Rose Sneyd15 May 2013

More than half of employers in 10 of the world’s largest economies acknowledge having made a bad hire, according to the latest CareerBuilder survey, which probably comes as no surprise. However, these companies report high financial consequences – giving pause for thought.

The majority of employers in each of the top 10 economies reported having made a bad hire – one in which the person turned out not to be a good fit or did not perform well – in the past year. In Russia this was as high as 88%, while in France – where the figure was lowest – 53% acknowledged a bad hire.

Of those that had reported making a bad hire, the financial cost was in the tens of thousands of dollars:

  • 27% of US employers reported that one bad hire cost more than $60,391 ($US50,000)
  • 29% of German employers put that figure at $78,787
  • 27% of UK employers reported losses of $92,469 (£50,000)
  • 29% of Indian employers put the figure at $44,869
  • 48% of Chinese employers at $58,860

A bad hire entailed a variety of negative effects for these employers: lost productivity; damage to employee morale; damage to client relations; reduced sales; and the costs involved with recruiting and training another worker.

“Making a wrong decision regarding hire can have several adverse consequences across an organisation,” Matt Ferguson, CEO of CareerBuilder, said. “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.”

The CareerBuilder survey was conducted by Harris Interactive online between November 1 and 30, 2012. Respondents included more than 6,000 hiring managers and human resource professionals from the ten countries with the greatest GDP: US; Brazil; China; France; Germany; India; Italy; Japan; Russia; and the UK.


Most Read