Nearly 70% of businesses affected by a bad hire in past year

Hiring the right person to fill a position can be a difficult decision to make, and a recent CareerBuilder study shows the cost of choosing incorrectly can be high.

Sixty-nine 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. Twenty-four percent said a bad hire cost them more than $50,000.

“Whether it’s a negative attitude, lack of follow through or other concern, the impact of a bad hire is significant,” said Rosemary Haefner, vice president of human resources at CareerBuilder. “Not only can it create productivity and morale issues, it can also affect the bottom line.”

Effects of a bad hire

The price of a bad hire adds up in a variety ways. The most common are:

  • Less productivity — 39 percent
  • Lost time to recruit and train another worker — 39 percent
  • Cost to recruit and train another worker — 35 percent
  • Employee morale negatively affected — 33 percent
  • Negative impact on clients — 19 percent
  • Fewer sales — 11 percent
  • Legal issues — 9 percent

Characteristics

When classifying what makes someone a bad hire, employers reported several behavioral and performance-related issues:

  • Employee didn’t produce the proper quality of work — 67 percent
  • Employee didn’t work well with other employees — 60 percent
  • Employee had a negative attitude — 59 percent
  • Employee had immediate attendance problems — 54 percent
  • Customers complained about the employee — 44 percent
  • Employee didn’t meet deadlines — 44 percent

Why bad hires are made

The most common reason associated with a bad hire is rushing the decision process. Employers cited these factors that contribute to a poor hiring decision:

  • Needed to fill the job quickly — 43 percent
  • Insufficient talent intelligence — 22 percent
  • Sourcing techniques need to be adjusted per open position — 13 percent
  • Fewer recruiters due to the recession has made it difficult to go through applications — 10 percent
  • Didn’t check references — 9 percent
  • Lack of strong employment brand — 8 percent

Twenty-six percent of employers stated they weren’t sure why they made a bad hire and said sometimes, “you just make a mistake.”

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