The True Cost of a Bad Hire

The True Cost of a Bad Hire

Hiring is expensive but even more costly if you end up hiring the wrong person. Much of this expense can be financial, but a bad hire will have wide-reaching effects on other aspects of your business. Below are the top three costs of a bad hiring decision.

Financial Costs

According to a study by SHRM (The Society for Human Resources Management), the price of a bad hire can be up to 5 times their annual salary. A five-figure investment in a bad employee could be a serious threat to business for a small company. Fixing a hiring mistake can also be expensive when you consider the cost of onboarding for a replacement. By hiring the wrong person, you also lose out on the potential profit the position would have contributed to if you had hired a better fit.

Productivity & Morale

A SHRM survey reports that most CFOs rank a bad hire’s impact on productivity and morale ahead of monetary losses. One of the biggest hiring mistakes is hiring toxic personalities. Disengagement is contagious, and a toxic employee can have a negative effect on their entire team. A toxic employee can destroy morale and create a hostile work environment, making it impossible to motivate the rest of the team. You also risk burning out the rest of your employees when a bad employee doesn’t pull their weight, and the turnover associated with being overworked. You can read our article about how to avoid hiring toxic employees in order to avoid the toll it takes the rest of the team.


A bad hire can be costly to your reputation for both clients and candidates. You don’t want a bad hire to be representative of your business, but a negative experience can leave a bad impression with clients and customers—and this could permanently cost you business. It can also cost you future hires if a bad employee writes a negative review following their termination. Employee reviews are readily available online at websites like Glassdoor where employees share information about their experience with their employers. Glassdoor reports that 70% of candidates look to reviews before making a career decision. This means that employee reputation is extremely important for attracting good candidates. One bad hire could drastically hurt this reputation and scare good candidates away from a toxic work environment.

It’s important to understand the true cost of a bad hire and to make careful hiring decisions in order to avoid it. A hiring mistake can be extremely costly and difficult to fix, which means that the best way to deal with it is to avoid it altogether. Never underestimate the impact one bad hire can have on your business.

Bradley Staffing Group is a full-service staffing firm based in Wayne, PA. We are committed to matching A-level talent with best-in-class businesses. Our knowledgeable and well-trained staff brings a combined 70+ years of staffing experience to our clients and candidates alike.

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