How much is a bad hire costing you?

“You’re only as good as the people you hire.” -Ray Kroc, former CEO of McDonald’s
Most business leaders would agree that people are the backbone of an organization.  Even those with high levels of technology still rely on people to build success. Unfortunately, sometimes people can also be the path to a business’ underperformance.  Ultimately, it often comes down to your effectiveness in vetting and selecting the right candidate for the job.

The costs of a bad hire

Estimates vary widely as to the tangible and intangible costs of a bad hire but, as Lisa Frye shares with SHRM, a bad hire is estimated to cost as much as $240,000 (based on estimates from her source, Link Humans CEO Jörgen Sundberg).

According to Human Capital firm Brandon Hall Group, factors contributing to the estimated $240,000 cost include:

  • Recruitment advertising fees and staff time.
  • Relocation and training fees for replacement hires.
  • The negative impact on team performance.
  • The disruption to incomplete projects.
  • Lost customers.
  • Outplacement services.
  • Weakened employer brand.
  • Litigation fees.
  • The opportunity cost of the hiring team shifting their focus from generating profits to recruiting and hiring.
  • The negative impacts of short-staffing has on team performance and morale.
  • Disruption to the flow of existing projects. (possibly leading to a weakened employer brand and lost customers)
Clearly, there is a strong connection between hiring top performers and business success.  So, how do you hire a top performer? It starts with objective evaluation of objective data.


Recognize that interviewing is, itself, a skill to develop. Don’t allow yourself to confuse a candidate’s effective self-presentation skills to be the same as true qualifications for the job. It’s important to evaluate a candidate’s ability to perform the critical functions of the job AND to fit with your organization’s culture. That’s where pre-hire assessments can be an effective tool.

Pre-Hire Assessments

Using a validated pre-hire assessment during the pre-hire process gives you important insights and data about a candidate’s likelihood of success on the job and likelihood of matching the characteristics of the manager or team. The key, of course, is to make certain you use an assessment which is validated for pre-hire applications.

Food for Thought

The hiring decision is far too often seen as a “necessary evil” for many hiring managers. It’s important to realize that the hiring decision goes far beyond a checklist and reaches into the very success or failure of an organization. Make the right hiring decisions and you build an engaged, satisfied, and productive organization that far exceeds the performance of your competition; make bad hiring decisions and you create an organization that flounders, has a disengaged employee base, and struggles to perform against your competition.

Better hiring decisions come from a complete understanding of the required skills for the job and an objective evaluation – including the use of validated pre-hire assessments- to help you uncover the real qualifications of a candidate.



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