That Bad Hire Might Cost You Hundreds of Thousands of Dollars
Bad hires are, well, bad. Their productivity is low. They tend to drag down team- and department-wide performance. They don’t get along with coworkers, causing disruptive disputes that can derail critical projects.
They also cost money. A lot of money.
– employee fraud, which causes median damages of $65,000;
– bad customer service, which causes loses of $62 billion a year to U.S. businesses;
– and workplace stress, which causes annual losses of $500 billion for U.S. businesses.
And then, of course, there’s turnover: Once that bad employee leaves, replacing them can cost as much as 213 percent of their annual salary.
As if that weren’t enough, bad hires are stunningly common, with 75 percent of employers reporting they’ve made one in the past. It’s a good idea, then, to get acquainted with the costs — if your company hasn’t made a bad hire yet, there’s a good chance it will soon.