The True Cost of a Bad Hire

The True Cost of a Bad Hire

Some say that good help is hard to find, but when it comes to hiring new employees, finding bad help is even worse. Here we discuss the true cost of a bad hire.


Bad employees are just a way of life, and hiring at least one into your organisation is inevitable.


Even with the best intentions, managers and human resources representatives can accidentally hire bad workers. Candidates can easily lie on their applications, make up stories during their interviews, and some employees can turn into completely different people in group environments.


Whatever the case, it is essential to watch the signs and catch bad hires before it is too late. Not only could they tarnish the reputation of your business, but the monetary cost of a bad hire can be exponential.

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How A Bad Hire Can Hurt Your Business

While hiring a bad worker wastes valuable company funds, there are other additional ways that a subpar employee or an individual with bad intentions can tarnish your business and reputation.


Customer Service

The most obvious damage can occur if the employee works in a customer-facing department of the business such as customer service. If the employee hates their job and doesn’t want to be there, they are probably not going to be nice to the customers.


When customers feel mistreated, they write bad reviews, and in this day and age, when customers can single-handedly bring down a business with one review, the damage can be catastrophic.


Office Culture

A bad worker can also negatively impact the office culture. If they are loud, disruptive, or refuse to work, they could negatively impact other employees. If left unchecked, this behaviour could spread like a virus, making its way through the organisation and killing the productivity of your office.


Safety Concerns

Then there are the safety concerns associated with a bad hire. Some of the most common workplace accidents include equipment-related injuries, chemical exposure, and slips and falls. A bad hire who does not take their training seriously could accidentally drive a large piece of machinery into another employee or damage your products.


If employees don’t care about leaving a spill behind or don’t understand the danger of certain chemicals, the harm caused can result in serious lawsuits, in addition to injured employees.


What Is The Actual Cost Of A Bad Hire?

If any of the scenarios discussed above come to fruition, then you could be looking at major costs to repair your business or reputation.


However, even if their job performance doesn’t cause a financial impact, the cost to repeatedly fire employees, place a job ad, recruit, interview employees, and onboard them can be too much for many businesses to take.


cost of a bad hire statistic that the cost to replace them is between £3,000 and £30,000


Different numbers are discussed when it comes to the price of a bad hire, but in general, many experts say that the cost to replace bad hires is between 3,000 and 30,000 pounds. The reason for the range is because the cost will often depend on the type of employee you are replacing, with an entry-level position being on the bottom half and a high-ranking executive being on the upper end of the spectrum.


The monetary cost can be downright stifling, so if your company cannot afford such a loss, then it is time to make an immediate change.


Signs Of A Bad Hire

If you suspect that you have a bad hire among your ranks, then time is of the essence. While it will still cost money to replace them, the longer they stay with your organization, the more it may cost in damage control. So, HR needs to advise managers of the signs.


For starters, you should get an immediate red flag from employees who call out of work frequently or show up tardy. This type of attendance proves that the employee simply does not care for the job or respect their coworkers.


If an employee does show up to work but they are not productive or they spend a lot of time talking to others, then HR needs to meet with them. If they are not responsive or the bad behaviour continues after that chat, then you may have to take more serious actions.


You may also have an employee who appears to be busy all day, but their work is lacking. If you are constantly telling a worker that they need to apologise to a customer or they are constantly required to redo their work even after receiving several coachings, then you may have a situation on your hands. Keep an eye out for these signs so your business can thrive and your customers won’t complain.


How To Avoid Bad Hires

While catching these employees is a good start, the best way to avoid falling victim to a bad hire is to catch the signs during the recruitment and interview stages so the individual does not begin work at your company in the first place.


Interview Skills

To start, HR representatives need to brush up on their interview skills. Ask questions that require detailed examples.


Something like, “Name an area of improvement that your manager asked you to fix during an annual review. What did you do to change that behaviour and how did the manager score this same situation on the next annual review?” That way, the candidate can’t just say that they worked on something and improved, and instead, they have to give a detailed answer about how this behaviour was changed.


You should also mix in some tough questions that candidates don’t often hear and cannot be answered with a simple yes or no. Questions like:


  • What do you expect from a boss?
  • Would you be willing to take a salary cut?
  • What type of work environment do you prefer?


The answers to these questions can be very telling into the work ethic of this candidate. If their responses don’t mesh well with your company culture, then you may want to thank them for their time and move on to the next candidate.


Screening Tasks

To gauge if candidates have the skills listed on their resume, you can also introduce an assessment into the recruitment process.


There are many resources available online or you can create your own test that could include typing skills, math equations, and real-world scenarios where the candidate must write down how they would respond. Combine these assessments with the answers to the interview questions and you can use that information to hire the next person for the job.


There are also various candidate screening software and tools available now that automate the candidate screening process, saving you precious admin time and resources.


Talent Attraction

Attracting the right talent in the first place is another effective tactic for avoiding the cost of a bad hire. High-quality candidates should stick out, and you can increase the chance of finding them by following some basic tactics.


Write effective job adverts

How you write your job adverts is an integral part of talent attraction. Don’t just write the role requirements and leave it at that – instead, write in a way that engages and excites a prospective candidate. This is your chance to really sell the role and opportunity to them.


Advertise in the right places

Getting your role in front of the right candidate means selecting the right media channels that they will be searching on. You also want your advert to be shown across a large enough number of these channels.


A simple Google Search of the job title and location you’re advertising should reveal the top results candidates are likely to be searching on.


What can you do now?

If you are an HR representative or manager who is guilty of bringing a bad hire into the organisation, and want to avoid the cost of a bad hire in future, don’t fret. Nearly everyone in the HR field has experienced the same thing and coped with the costs as a result. The key is to learn from that situation and protect the interests of your organisation with the best people.


If you still need help, you can easily find it online. Luckily, occy’s hiring platform can help you during every step of the recruitment process and keep you on the right track. 


To avoid attracting the wrong kind of candidate in the first place, we’ve put together a guide on this topic – simply download for free today!

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