What a bad hire really costs your business

What a bad hire really costs your business

When it comes to recruitment, finding the right person can give your organisation a major boost. But on the flip side, poor hiring decisions can cost your business more than you think.

While it’s clear that hiring the wrong person ultimately results in lost time and money, you may be surprised to learn how much. And when you factor in the negative impact your bad hire has on your clients and other employees, it can be a real blow to your bottom line.

Recruiting the best people is not easy and getting it wrong too often can have a severe impact on your business. In this article we’ll shed some light on just how much a bad hire can cost you and provide some simple but effective tips to help you avoid one.

Recruitment Costs

Before you even get to the point where you can hire someone, you need to invest time and money into the recruitment process itself. And while this is largely unavoidable, even when you hire the right person, if things don’t work out and you need go through the process again in a few weeks or months’ time, it will basically cost you double!

Here’s an overview of some of the recruitment costs you need to consider:

  • salaries of those who contribute to and oversee the hiring process
  • internal commissions or referral bonuses
  • print and online advertising costs for the job posting
  • software dedicated to pre-screen, track and manage applicants
  • software related to relevant aptitude tests or background checks
  • attendance at recruitment events or career exhibitions
  • travel expenses for staff or candidates to attend interviews
  • temporary hire fees to fill the role while you look for candidates.

There are also the costs associated with paying your HR team or manager to put together job descriptions, review resumes, set up interview times, conduct interviews, check references and negotiate terms of employment. This process takes many hours, which reduces time spent on other key HR functions resulting in lower productivity and profitability.

After the Hire

Once your new employee gets started, there are additional costs involved in onboarding and training. In the first few weeks your productivity will be down as existing staff spend time training the new candidate, who will also often have a reduced workload until they settle in and find their feet.

On top of this, if they’re not the right person for the job, they may also have a negative impact on your workplace in several ways. If they’re not pulling their weight, the output levels of existing staff can also start to slide. And if their personality or character is clashing with others, it can seriously affect staff morale. This can end up damaging on your customer relationships, and eventually lead to the loss of good staff and valuable clients.

If You Let Them Go

Sometimes issues can be resolved with additional training or coaching, but not always. If it’s clear it’s not working out, then the best path is likely to cut your losses and let them go. At this point you may incur further costs related to incomplete projects, lost productivity and disruption to services. Depending on the circumstances, you may also need to factor in severance pay or legal costs.

Make sure you are fully aware of any possible legal implications before you make the call to fire any employees, to avoid any issues and associated costs related to unfair dismissal claims. 

Bonus Tips to Avoid A Bad Hire

When you lay it all, it becomes clear just how important it is to hire well the first time! Here’s a few tips to help you avoid the bad apples and find a good fit:

  • trust your instincts – if you see a red flag or something doesn’t feel right don’t ignore it
  • check references – no matter how well the interview went, always check in with previous employers
  • get another perspective – have another manager or employee sit in on the interview so you can compare notes
  • seek the help of experts – if you are not confident in managing the hiring process, get outside help from a recruitment agency who specialises in your industry.

Set Yourself Up to Get it Right First Time

When it comes to hiring, there is no foolproof method to avoid a bad hire. But when you have a good recruitment strategy, take your time to find the right candidate and trust your instincts, you’ll get it right far more often than not. And in the process, you’ll save yourself time, money and ongoing headaches!


Savant Technology and ADAMAPP are working in partnership to deliver for clients tech products as part of their projects as well as additional resources required on the programme with highly competitive pricing.

Please do not hesitate to get in contact for a consultative discussion on how we can help you recruit top talent.

For more information please visit www.savantrecruitment.com or contact Peter Kyriacou directly at peter.kyriacou@savantrecruitment.com

We look forward to hearing from you.

Julia Guesmia Market Researcher at Savant Recruitment Experts


Get the latest insights from ADAMAPP in your inbox