The Cost of a Bad Hire


Executives occasionally lament over the steep cost of engaging a search professional to conduct a search for talent. Perhaps this is due to their prior experience where things didn’t turn out so well. When done right, a professionally placed hire should yield measurable results that justify the expense. In some cases, the results are lacking and beg the question, “What was my ROI?”

Results are the key to everyone’s success. Good results and everyone is happy. Bad results and no one is happy.  A recent study showed that the cost of a bad hire was roughly 15X the employee’s annual base salary. This includes both hard costs and loss of productivity. Companies should expect a good return on their recruitment spend if they do it right.

What is doing it right? First, it is selecting the right firm to conduct the search. Second, it is trusting your firm to know the best way to attract the individuals that they have prospected for you. Third, and equally critical to the outcome,  EXECUTION!  The executives and Human Resources team must be sure to deliver the goods in every respect. If you have a target candidate and your search partner informs you of the best strategy to be successful, listen to them and execute to their specifications. Nothing is worse that getting to the end of a search, vetting and interview process only to lose the person you felt best could lead your company into the future.

Scores of companies miss out on hiring the best person because their process is too cumbersome or convoluted. When you make the investment to retain a firm to find top talent, it is your job to support their efforts or you will fail in the most important part of any company’s growth; hiring the best people.  Before you engage a search firm, be sure to fully vet them so that you can put your full confidence in them to provide  accurate, timely and well informed information. This is one key in avoiding a bad hire.

If you think it costs a lot to hire the right person, consider the enormous costs of hiring the wrong person.

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