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The Real Cost of a Bad Hire

What is a bad hire?

Good hires have a positive and uplifting attitude which improves productivity, boosts office morale and also impacts the organization positively.
Bad hires, on the other hand, are the exact opposite of good hires. The cost of a bad hire is so expensive it ranges from lost time, productivity, and momentum to dips in morale and even to declines in growth.

Red Adair, an American innovator once said, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”

A survey by Glassdoor and Brandon Hall Group revealed that yearly, 95% of employers suffer from a bad hire.


What exactly is the cost/effect of a bad hire?

A bad hire could be a nightmare. The wrong hire can cause significant disruption and damage to morale, bringing down staff productivity and creating even more HR headaches in the process.
We highlighted other effects of hiring the wrong candidate, they are:


Increased Turnover
Good employees can’t stand having bad employees as their colleagues or managers. Studies have shown that over 80% of employee decisions to quit have been directly caused by other employees. You don’t want to lose a good one because of a hiring error.


Dampened Morale
Great employee morale is directly proportional to increased productivity, organization loyalty, and ultimately higher profitability. Adding the wrong individuals to the workplace kills workplace morale. Bad hires negatively impact workplace morale up to 95 percent of the time.


Decreased Teamwork
Teamwork is critical for every organization’s success. Bad hires cannot work well with their colleagues as they do not fit within the organizational culture or environment. Other employees find it difficult to cooperate with them. The negative impact on teamwork is even worse when the person in question is a team leader or manager.


Decreased Productivity
Workplace morale and teamwork are factors which are critical for boosting productivity. By negatively impacting it, it’s obvious that bad hires negatively impact productivity. A survey revealed 39% of businesses have reported significant decreases in productivity which can be directly linked to making bad hires.


Reputational Damage
The negative impact on employee morale and increased turnover will soil an organization’s reputation. Also, the moment an organization gains repute for hiring the wrong individuals, it will start having issues attracting top talent. Furthermore, a bad hire who interfaces with customers can exhibit bad behaviour like being hostile, rude or disrespectful towards customers. This reputational damage can reduce the chances of repeat business and recommendations from customers thereby impacting revenue.


Financial Loss
Diminished customer satisfaction, work quality, and business reputation can also end up costing the company more money over the long term than the immediate costs of replacing a bad hire.


A research by CareerBuilder revealed the following:

















Why do bad hires happen?

There as underlying causes of bad hires and we’ll look into them real quick. Here are leading reasons for a bad hire:
  • An urgent need to fill positions
  • Insufficient talent intelligence
  • Antique or outdated talent sourcing techniques
  • The organization not having a strong brand presence
  • A broken/bad interview process
  • Didn’t check references


It is also worthy to note that companies lacking an established interview process are five times more likely to make a bad hire.


How to avoid bad hires.

To avoid bad hires, the first step is hiring the right recruiters. The following are things recruiters must check for when hiring a candidate to avoid bad hires:
  • Profile your ideal candidate
  • Know where to look for candidates
  • Interview correctly
  • Resist the temptation to fill the job quickly
  • Always check references
  • Look out for interview danger signs


A bad hire is a major factor impeding the growth of organizations and if left unchecked for long can lead to the end of any organization involved. Assessments are fail-safe ways of knowing if a candidate will be a bad hire even before hiring them. You can test candidates based on job-specific roles, behavioural tendencies and you can even test to know if they’re the right fit culturally.


Want to know more about assessment tests? We got you covered.


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