Bad Hiring Decisions

Hiring the wrong person increases training costs, recruitment costs and severance costs (to name a few).  Inc.com says that turnover costs about 1.5 times the salary of the employee who needs to be replaced while the U.S. Department of Labor estimates that the average cost of a bad hiring decision can equal 30% of the individual’s first-year potential earnings. Those costs increase the higher up in the organization the turnover occurs.
A CareerBuilder study showed that 69 percent of employers reported that their companies have been adversely affected by a bad hire this year , with 41 percent of those businesses estimating the cost to be over $25,000, and 24 percent said a bad hire cost them more than $50,000. Harvard Business Review concluded that as much as 80% of employee turnover is due to bad hiring decisions.

In addition to the financial burden of hiring the wrong employee, organizations typically will see lower employee morale. When people see their coworkers leaving, gossip starts to spread and some people may even start to worry about their own jobs. Current employees may find themselves taking on extra work to make up for those who just left and can be stressed or unhappy with their new roles. Employers could see a decrease in employee productivity as a result of the low morale.

Another result of constant poor hires is a bad reputation. Your recruiters, hiring managers, and even your organization as a whole can be burdened with this negative reputation. After all, a string of consistently bad hires is easy to recognize. In return, you could lose the respect of not only your peers and colleagues, but ruin your reputation in your industry as a whole. Today, more than ever, recruiting and hiring has become increasingly social. A few bad hires may negatively impact the public perception of your company as a positive place to work with. With public reviews being so widely available, sites like Glassdoor are often one of the first places potential employees will go prior to their interview.

About Rachel Maleady
Rachel is the Content Marketing Manager and Developer Hiring Expert at Stack Overflow. In her spare time you can find her watching TV, playing with her cats, or working on her blog.

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