What Is the Cost of a Bad Hire (And How Can You Avoid Them)?

The hiring process can be expensive and time-consuming. If you accidentally hire the wrong person, you’ll have to start over, costing yourself both time and money. But there are also additional costs that you might not have considered. Here is what you could face with a bad hire, and how to avoid hiring the wrong person in the first place.

Costs of a Bad Hire

Besides the time and money involved in the hiring process, here are some common costs of a bad hire:

  • Having a bad hire on staff may actually be worse than leaving the position open.
  • If your clients are unsatisfied with your new hire’s performance, they may choose to leave rather than waiting for you to work things out.
  • Your company’s reputation is everything. Both disgruntled ex-clients and disgruntled ex-employees can do a lot of damage to your brand.
  • Team issues. You know the old saying, “one bad apple spoils the bunch?” A bad hire can bring down your entire work culture, causing disharmony and lost productivity across the entire team.
  • Wasted coaching time. Few managers jump straight to firing someone. Instead, they tend to put a lot of time and effort into coaching a poor employee. But if you hadn’t made a poor hiring decision initially, you wouldn’t need to waste that time.

Hiring Better Candidates

So how can you avoid a bad hire? There are no guarantees, but updating your hiring process can go a long way toward improving your chances of hiring better candidates. Here are some tips:

  • Behavior-based interviews. Rather than focusing solely on skills, try asking open-ended questions that focus on behavior. “Tell me about a time when…” or “What would you do if…” are great openers that can be tailored to situations that commonly arise at your workplace.
  • Staff involvement. The evaluation process should begin when a candidate walks in the door. How did they treat the receptionist? The parking garage attendant? The janitor? Many people are great at interviewing, but their true colors come out when dealing with those who don’t seem to have anything to offer them.
  • Checking your assumptions. Unconscious bias can cause you to overlook highly qualified candidates. Make sure your job ads use neutral language. Use blind hiring software to strip out “tells” such as name, hometown, or college that could bias your thoughts before ever meeting the candidate.

Bad hires can be extremely costly, not only in dollars, but also in time, productivity, and even reputation. Take active steps to update and streamline your hiring process, and you will be more likely to hire the best candidates each time. Make sure you avoid management “don’ts”!


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