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The Cost of Hiring the Wrong Person & 5 Ways to Avoid this Expensive Mistake

By Kate Bahnmuller
October 16th, 2019

It’s no secret that hiring the right people for your team is crucial to the success of your organization. But what if you hire the “wrong” person?  Meaning you hire someone who doesn’t line up with your company’s culture or have the necessary skills to get the job done. How much does that ultimately cost your organization and how can you avoid this expensive mistake?

“The cost of a bad hire is always extensive,” said Arte Nathan, founder of The Arte of Motivation, a human resources advisory service based in Las Vegas. “Most companies don’t know the full cost of the turnover, so they don’t apply the resources upfront to avoid it. If you make a bad hire, there is a ripple effect among all who work for you, your product and your product quality.”


What to consider when calculating the cost of hiring the “wrong” person…

The Financial Costs:
  • Hiring (recruiting, advertising, interviewing)
  • Total compensation (salary + benefits + bonuses)
  • Training and onboarding
  • Lost customers and missed business opportunities
  • Severance/unemployment

The Intangible Costs:
  • Time spent recruiting, hiring, interviewing, training
  • Employee morale – the rest of your team may become dissatisfied or disengaged 
  • Reputation costs – transparency into companies is higher than ever (LI, Glassdoor, etc.) and your company’s reputation could suffer from bad employee or customer reviews

So how much does it cost? 

According to Jörgen Sundberg, CEO of Link Humans, an employer branding agency in London, the average cost of recruiting, hiring, training, and onboarding a new employee is around $250,000. He also suggests that, after everything is all said and done, a “bad” hire could cost your organization over $800,000!


How to avoid hiring the “wrong” person…


#1 Start with building a clear job description and paint a picture of your “ideal candidate”
  • This seems like a no-brainer, but most job descriptions use vague messaging with long-winded jargon. Be sure your job description is easy to read and clearly lays out the responsibilities and duties of the role. 
  • Also, consult with your team to figure out what skills and traits would compliment your current employees and align with your company’s mission, vision, and values. 


#2 Don’t do it alone! Utilize external resources
  • Specialized recruiting firms are a great resource to save you time and avoid the costly mistake of hiring the wrong candidate. 
  • Recruiters have a large network to tap into. They will vet candidates on the front end and only send you “qualified” candidates to speak with.


#3 Create a thorough interview process
  • It’s important to have a multi-step process utilizing phone, video, and in-person interviews.
  • Include other members of your team in this process.
  • Personality assessments are also a great resource to help flush out potential issues on the front end, but these should not be used as a final decision-maker.

#4 Don’t rush the interview process just to fill the open position
  • Vetting candidates takes time and you want to find the right person, not just a person.
  • On average, it takes 2-6 weeks to locate, interview, and thoroughly vet candidates before making a decision to extend an offer. Be patient and include your team when making the decision!


If you have any questions around locating top talent for your team, please contact Kate at kate@kestersearch.com or call 864-417-2172.




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