top of page
  • Writer's pictureW Jaxon

< Cost of 1 Bad Hire > 


“When I find an employee who turns out to be wrong for the job, I feel it’s my fault because I made the decision to hire him.” ­­– Akio Morita (Co-Founder of Sony)


Being a hiring manager you have probably found yourself in the shoes of Akio Morita, scratching your head over what went wrong with a hire, you're certainly not the only one. It's a shared experience among many in the same boat.


According to the CareerBuilder survey, 75 percent of employers said they have hired the wrong person for a position, and of those who had a bad hire affect their business in the last year, one bad hire cost them nearly $17,000 on average.




Well, it might be more ...


So let's just continue and see it for ourselves. picture this: you're a hiring manager at a tech startup, eager to build the dream team that'll take your company to the next level. You go through resumes, conduct interviews, and finally find someone who seems like the perfect fit. But as time goes on, you realize they're not pulling their weight. Projects get delayed, morale takes a hit, and before you know it, you're dealing with the fallout of a bad hire.


Now, let's break down the real cost of hiring the wrong employee. Sure, there are the obvious expenses like recruitment fees and training costs. But what about the not-so-obvious ones? Like the time your team spends trying to pick up the slack or the missed opportunities while you're busy dealing with the aftermath. These hidden costs can add up fast and take a serious toll on your startup's bottom line.


But fear not! I've got a formula that'll help you calculate just how much those bad hires are costing you:


Cost of Bad Hires = (Recruitment Costs + Training Costs) + (Productivity Loss + Morale Impact) + (Turnover Costs + Reputation Damage)


Now, let's break it down:


Recruitment Costs


This includes everything from posting job ads to flying candidates in for interviews. It's the money you spend just to find that perfect hire.


Training Costs


Once you've found them, you need to get them up to speed. Training costs can include everything from onboarding materials to mentorship programs.


Productivity Loss


This is where things start to get messy. When a bad hire isn't pulling their weight, it can throw off the whole team's groove. Projects get delayed, deadlines get missed, and before you know it, you're playing catch-up.


Morale Impact


A bad hire can bring down the morale of your entire team. When people see someone slacking off or not pulling their weight, it can breed resentment and frustration.


Turnover Costs


If things go south, you might end up having to let the bad hire go. This means going through the whole hiring process again, which can be both time-consuming and expensive.


Reputation Damage


Last but not least, there's the damage to your startup's reputation. Word travels fast in the tech world, and if your company gets a reputation for hiring duds, it can make it harder to attract top talent in the future.


So, there you have it: the true cost of bad hires or you can say average cost per hire for a wrong person. But don't panic! There are things you can do to avoid falling into this trap. Take your time during the hiring process, prioritize cultural fit as much as technical skills, and don't be afraid to cut ties if things aren't working out.


Remember, building a successful startup is all about surrounding yourself with the right people. So choose wisely, and watch your company fly!



15 views0 comments

Recent Posts

See All

Stay Informed

Subscribe to Our Blog Updates for Exclusive Content and Insights.

Thank you for subscribing! You're now part of our exclusive community!

bottom of page