Cost Of A Bad Hire

Do you know what a bad hire costs your organization? Some numbers indicate failure so clearly that you can’t help but pay attention to them.

For a minute, assume the role of a senior executive who has just been handed a business scorecard containing performance numbers in five critical business areas. After looking at the numbers below, would the data make you cringe?

70% of users are dissatisfied with the process.
50% of customers regret their buying decision.
46% turnover among new buyers.
46% failure rate of process output selections.
A mere 19% are unequivocal successes (less than 1:5).

It’s Time to Face the Numbers and Facts…

70% dissatisfied — 70% of the external customers (applicants) and 28% of the internal customers (hiring managers) indicate they are dissatisfied with the hiring process. (Source:

50% customer regret — 50% of the processes users (both managers and new hires) later regret their “buying” decision (Source: The Recruiting Roundtable). In addition, 25% of new hires later regret taking their new job within one year (Source: Challenger, Gray)

46% turnover — 46% of new hires leave their jobs within the first year (Source: eBullpen, LLC) and 50% of current employees are actively seeking or are planning to seek a new job (Source: Deloitte).

Some additional data points to consider include:

6% regret hiring decisions — Nearly two-thirds of hiring managers come to regret their interview-based hiring decisions (Source: DDI)

50% new executive turnover — nearly half of new executive hires quit or are fired within the first 18 months at a new employer (Source: Corporate Leadership Council).

Newly promoted executives don’t do much better (40% of newly promoted managers and executives fail within 18 months of starting a new job (Source: Manchester, Inc).

Bottom performers produce less — hiring and retaining below or even average performers have real opportunity costs because top performers can increase productivity, revenue, and profit by between 40% and 67% over average performers (Source: McKinsey & Co.).

Your organization doesn’t have to be another statistic.

You can gain a competitive advantage and cut down on bad hires. By making sure you have the right people in the right roles with the right personal skills to execute the organization’s strategy.

By assessing candidates and jobs; we then match candidates who best fit the needs of the ‘job’ and the ‘culture’ of the organization. When this alignment occurs, both the employee and the organization benefit through an enjoyable, productive work environment. When we hire only for skills, we end up firing for attitudes.

2 thoughts on “Cost Of A Bad Hire

  1. @VICKI
    Compelling insights. Assessing a candidate is very imperative for an organization, as many pre-online assessment tool are available in the market, a company can take full advantage of this tool to quickly analyze a candidate’s suitability towards a job. Because the skills of a candidate must be compatible for a job. This will be relieving for the recruiters in the further process of recruiting.

  2. @Vicki
    That’s very insightful and impressive figures you have shared. In the end you mentioned about assessments, that’s very true. In today’s technological era, pre-online assessment tests are very valid and produce reliable results in few minutes, and this is the best way that can help recruiters to find in the best fit talent for a particular job. Pre-online assessment tests must be aligned in talent acquisition strategy and must be incorporated with the business strategy as well to achieve long term growth.

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