The REAL cost of a Bad Hire

One in 10 new recruits are regarded as a ‘poor hiring decision’  with 70% of HR directors admitting that they have hired someone who did not meet expectations. Good recruitment makes good business sense. Poor recruitment is costly and has an impact on the bottom line. The CIPD (Chartered Institute of Personnel & Development) estimates the cost of recruiting a Senior Manager as £6000 – however, there are additional implicit costs, which include the loss of productivity and the cost on team morale.

As companies turn their attention to growth and profitability, the implications of a bad hire can be far more costly than first realised.  More than half (52%) of HR directors said that loss of productivity is the biggest problem associated with making the wrong recruitment decision. Almost a third (30%) said that a poor hire reduces staff morale whilst one in five (17%) HR directors said that it has resulted in significant financial costs.  These can include the employee’s salary and lost performance; education and training costs to raise performance levels; impacted productivity of the employee, colleagues and management; potential loss of revenue and the ultimate cost to re-recruit for the role.

UK hiring managers were asked, “Which one of the following, in your opinion, is the single greatest impact of a bad hiring decision?” Their responses:

  • Lost productivity    52%
  • Lower staff morale    30%
  • Monetary costs        17%


Download our ‘The REAL cost of a Bad Hire’ Infographic in PDF to see more statistics at a glance.

Information sourced from Robert Half UK (2015) and the REC.