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How much is each bad hire costing your business?

18 NovemberBy Rob Forsyth

We’ll cut right to the chase and say that we’re sure that you already know just how crucial it is to build a strong team of passionate and engaged individuals; a team equipped with the knowledge, skills and experience you need to ensure that your business will not only survive, but thrive.

But what if you get it wrong?  What if you make, what you think is an excellent hire, only for that person to leave within the first 12 months? 

This Blog tackles this exact subject and we give you a FREE report where you can calculate exactly how much your current recruitment process is costing you

So how much does each bad hire cost your business?

3.5 x their salary! 






**Results based on formulas from Perfect Match (Making the right hire and the cost of getting it wrong) Study researched & published by the Recruitment & Employment Confederation October 2017**



What is the true cost of employee turnover?

We’d like to ask you to take a few moments to consider how many of the people you employed during the last 24 months are still thriving as part of your team? When we pose this question to hiring managers and businesses owners, we are typically met with responses which proudly relay employee retention figures of between 70 and 75%.

Now, you will probably agree that, at least at first glance, these percentages look quite impressive.

When we look at this data however, we can’t help but see that between 25% and 30% of the time, the recruitment process has resulted in failure. That might sound harsh, but hear us out here.

The reasons that lie behind bad hires are myriad and the costs that result from every bad hire are so often simply accepted as being part and parcel of being in business. But do you know precisely what the cost of employee turnover looks like for your business?

We believe that if you had this figure in front of you right now, with a detailed breakdown of exactly where those costs have been incurred, you would want to take steps to enhance your hiring process and mitigate the impact on your bottom line.





Every business is different but the cost of a bad hire for your company is almost certainly considerably more than you might initially assume. How can we say this with confidence? Let’s look at some of the direct and indirect costs that can result from poor recruitment decisions.

Direct costs:

  • Wasted management time and/or training costs
  • Unrecoverable salary
  • Recruitment agency fees
  • Lost productivity

In addition to the wasted salary paid during the weeks, months or years over which a poor hire has been employed, supplementary costs to account for the higher than average levels of sickness and other absences that are routinely seen need to be accounted for. Severance packages, salary settlements, benefits and bonuses will also accrue additional costs, which will, of course, increase in accordance with the seniority of the position.

Indirect costs:

  • Indirect staff turnover
  • Reduced team productivity
  • Loss of business
  • Impact on reputation

Hiring is essential to business growth and when an employee leaves, team resources need to be reallocated to plug the gap in the workforce. Staff morale can be affected by this disruption and additional workload requirements, which can impact both overall productivity levels and the quality of the work being completed during this time.

Extra time and money will need to be reinvested into the recruitment process to find a suitable replacement and all of this must come before you can even begin to add on the costs of any new training required to ensure your newest hire becomes a valuable and productive member of the team.

Since it typically takes an average of 28 weeks for every new recruit to reach optimal productivity, your firm might also experience an additional team-wide loss of efficiency as supervisors and/or co-workers spend time helping to bring a new hire up to speed.

Clearly, recruitment fees really are just the tip of a very large iceberg and the knock-on effects that unsuitable hires can have on a wider team should never be underestimated.

The media industry as a whole has a high attrition rate that really needs to be addressed. The reasons for this can be, at least in part, attributed to a transient workforce. However, many employers and recruitment agencies focus too closely on simply getting new hires into the workforce and not on whether an individual will:

  1. Perform well
  2. Enjoy the role
  3. Stay for the long term

and yes, There is a solution!

The NinetyThousandHours hiring process utilises cutting-edge technology and behavioural science to de-risk the hiring process. We haven’t maintained a 96% retention rate by accident, it’s definitely by design.

If you would like a detailed, fully personalised Recruitment Process Audit report on the true cost of every bad hire for your business, click the button below and enter your information today. We’re sure you'll find the results very interesting and perhaps quite surprising!


Click here for your FREE Recruitment Process Audit

Recruitment Process Audit



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