Cost of a Bad Hire - Why Is It Important to Choose Whom You Hire Carefully?


A bad hire is like a bad apple. One bad apple, which can spoil the others. Hiring the wrong person can have serious implications. A bad hire not just hampers productivity but also influences your employees leading to disengagement and cultural imbalance. The cost of a bad hire is threefold:


   1) Economic Loss

   2) Opportunity / Productivity Loss

   3) Reputation Loss


Economic Loss

According to a CarrerBuilder study, 41% of businesses estimated the costs of a bad hire to be over $250000. 1 in 4 businesses estimated these costs to be over $50000. The study further said that 3 in every 10 Indian enterprises (29 percent) reported that a single bad hire (someone who turned out not to be a good fit for the job or did not perform well) cost the company more than Rs 20 lakh ($37,150) on an average. Another study indicates that absenteeism alone costs an average of $347 per day per employee.


While these numbers are quite compelling, it's quite hard to quantify the actual economic loss caused by a bad hire. And it's the easiest to damage an organization. Without proper screening procedures, businesses can lose hundreds of thousands of dollars a year due to a bad hire.


Remember, the cost of an employee is not simply the hiring cost or the salary. It involves time and resources spent on sourcing, benefits, onboarding, and learning & development.



­­­­­Opportunity / Productivity Loss


Productivity in the workplace is correlated to an employee's morale. A bad hire can bring this morale down, leading to unnecessary conflicts.


Employee disengagement is dangerous and can spread like a forest fire. When a bad hire struggles, other team members need to step in and pick up their slack, which limits their own productivity, thus creating a ripple effect across the team.


A study by Brandon Hall's group indicates that 72% of businesses could correlate team dynamics with improved productivity and 68% reported that the nature of these dynamics had a direct effect on the team's productivity.


Reputation Loss

Bad hires send a negative message and hurt your organization's reputation among both employees and clients.

A bad hire who lacks competency can have a knock-off effect on your team as rest of the team members are expected to take up responsibilities to avoid the consequences.

Eventually, this provokes your best hires into quitting the job, and even joining your competitors at times.


It is even worse if the bad hires are in customer-facing roles. They can damage your relationships and reputation that were built over time.


Think of this from a business perspective. Your managers are already under pressure to manage the team that lacks a skillset. In addition to this, they have to now find, onboard, and train a new resource.


Using ATS for Avoiding Bad Hires

Great talent impacts the top line trajectory disproportionately. A good recruiting system implementation enables you to identify the following:

1) The source of high-quality hires.

2) Evaluate the institutions/companies that have worked for you.

3) Recruiting team metrics when it comes to finding high caliber joiners. What is their Turn Around Time?

4) What do the best recruiters do that helps them source, identify?

5) Candidates experience scores and improve them over time.

6) Evaluation criteria and interviewing process select and attract talent.


A Michael Jordan transforms a team. Strive to hire a star performer every single time.


An agile, user-friendly applicant tracking system is essential for finding the best talent and eliminating the bad hires out of your hiring system. Streamline and strengthen your recruitment process with a repeatable, predictable hiring engine.


An engine that acts as a centralized portal bringing all the elements of the hiring process together will work wonders for you. An engine that allows talent acquisition professionals, employees, CXOs to collaborate and add value to the organization's top line.


An intelligent, connected applicant tracking system helps you avoid losses from bad hiring decisions by bringing maturity to the following processes:



1) Target top performers to source top performers.

2) Create, manage and publish jobs across your sourcing channels like job boards, social media, and career sites, using a single platform.

3) Manage all applications and related communication in a centralized hub.

4) Build a quality talent pool.

5) Collaborate with your team over sourcing decisions.

6) Analytics to help measure and optimize your sourcing efforts.



1) Automatically identify the right candidates based on your criteria.

2) Methodically assess candidates using screening patterns.

3) Sort resumes based on preferred credentials like experience, domain expertise, technical competency, etc.

4) Effortless feedback capture to help you identify who got selected and who got rejected.

5) Conduct skill-based and behavioral assessments using specialized partners.



1) Establish the right rules so you drive pay parity across levels/bands.

2) Deliver a delightful candidate experience to improve the joining ratios.

3) Validate approvals so the right governance checks are in place to protect costs and margins.



1) Provide an effortless pre-start and starting experience for prospective employees.

2) Showcase your company culture to reassure them of their choice.

3) Enable communication and collaboration with the hiring team about a prospective joiner.

4) Seamless information flows to different departments for various logistical arrangements to ensure productivity from day one.


And here comes the best part about using a cloud based ATS: it enables a centralized database with zero IT support and is configurable according to the changing needs of business.


Benefits of Leveraging ATS to Make Great Hiring Decisions

The other side of the coin is that avoiding bad hires will greatly contribute to making excellent hiring decisions. And the positive impacts of that are both top-line and bottom-line.


Top line impacts

Speed of hiring

Improving offer to joining ratios

Retention and culture fit

Increase productivity in terms of joiners per recruiters


Bottom-line impacts

Reduced costs by focusing on lower channels of spend/hire

Improved employer brand and recognition.

Predictable outcomes in weeding out bad hires.


If you can overcome making bad hiring decisions, naturally you will minimize the cost of bad hires and end up making excellent hiring decisions and can be that talent acquisition superhero you always wanted to be!


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