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The 2 Types of Costs of a Bad Hire.


Meredith Stack


When companies make bad hiring decisions, the impact is significant. It costs the company on two levels: tangible and intangible.

The tangible cost of one bad hire averages about $15,000, according to a Recent CareerBuilder Survey. And that’s a conservative number. When you add in all of the recruiting costs, training fees, risk of litigation, and lost productivity some industry experts estimate losses can reach up to $250,000. Despite this enormous risk, 74 percent of employers admit that they've hired the wrong person for a position.

More than just money.

While the tangible costs are staggering, the intangible costs should not be underestimated. The unquantifiable things affect you in an entirely different way. Consider the price you pay when:

  • Your otherwise strong team is distracted, annoyed, and held back by an underperformer.
  • You spend too much time pushing and prodding an individual to do the job at the expense of other, more productive activities.
  • Other departments are irritated by the internal service they get from your problem employee.
  • You find yourself putting off making decisions because you know you need to deal with this people issue first.
  • Your customers, vendors, and/or contractors walk away with negative feelings about your company.
  • Your credibility as a manager is undermined because the bad hire reflects poorly on your judgment and hiring skills.
  • You’re exhausted by the amount of mental time and energy you expend trying to figure out how to get this mis-hire on track.
  • Your employer brand suffers due to negative reviews and word of mouth from frustrated employees

Whether a mis-hire is on the job for weeks, months or years, IT’S TOO LONG.

Take your time.

So the next time you’re tempted to rush through your hiring process and settle for a mediocre choice take a step back and reconsider. There are tools, like pre-employment assessments, that can help you make more informed decisions. 

Assessments are an effective way to predict performance before you hire. Learn more about how Berke can help you hire confidently.

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