How much does a bad hire cost?
Chances are more likely than not, you’ve had a bad hire or two. This usually begs the question, how much time and money went into that individual and the training that comes along with it? Of course you can estimate these amounts, but have you ever wondered exactly what time, resources, and money have gone into a bad hire? What if you had a way to measure the expense? Here at Loophire, we can!
Hiring the wrong person can be a costly mistake for any company. Not only can it impact the morale of existing employees, but it can also have a significant impact on the bottom line. A bad hire can cost a company thousands, even hundreds of thousands, of dollars in lost productivity, wasted resources, and missed opportunities. In this blog, we will explore how much a bad hire can cost a company and why it's essential to get the hiring process right.Lost Productivity
One of the most significant costs of a bad hire is lost productivity. A new employee who is not a good fit for the role can take longer to get up to speed, make more mistakes, and require more supervision than a good hire. This can lead to a decrease in overall productivity for the team or department. According to a study by the Society for Human Resource Management, it can take up to six months for a new employee to reach full productivity. If the employee is not a good fit for the role, that time frame can be even longer. During this time, the company is paying the employee's salary, but they are not producing the expected results.
Hiring the wrong person can also waste valuable company resources. This includes the time and effort spent on recruiting, interviewing, and training the new employee. According to a study by the Aberdeen Group, it can cost up to $240,000 to replace an employee in a high-skilled or executive position. This includes the cost of advertising the job, screening resumes, conducting interviews, and providing training to the new hire. If the employee leaves after a short period, these resources are essentially wasted.Missed Opportunities
A bad hire can also lead to missed opportunities for the company. For example, if the new employee was hired to lead a new project or department, but they are not a good fit for the role, the project or department may not reach its full potential. This can result in missed revenue or growth opportunities for the company. Additionally, if the new employee has a negative impact on the company's culture or customer relations, it can harm the company's reputation and lead to lost business.
Impact on Morale
Hiring the wrong person can also have a negative impact on the morale of existing employees. When a new employee is not a good fit for the role, it can lead to increased stress and workload for other team members. This can result in low morale, decreased productivity, and even employee turnover. Additionally, if the new employee has a negative attitude or clashes with other team members, it can harm the overall company culture and lead to a toxic work environment.
At the end of the day, it's not surprise that hiring the wrong person can be a costly mistake for any company. To avoid these costs, it's essential to have a well-defined hiring process or hiring partner in place. By investing in a thorough hiring process, companies can avoid the high costs of a bad hire and set themselves up for long-term success.
But seriously, try it for yourself and see.