Tuesday, December 14, 2010

Bad Hires Are Costly

According to their press release, 67% of companies responding to a CareerBuilder survey reported that a bad hire in the last year was costly. That's pretty dramatic, huh? Not really. Among employers with more than, say 250 employees, my guess would be that most did some hiring (even if only to replace natural attrition in key positions) in the past year. In fact, I find it miraculous that one-third did not make a bad hire that cost them money. Perhaps they are not looking hard enough.

If we look at some of the other data, 24% said that a bad hire cost them at least $50,000 and 40% said that a bad hire cost them at least $25,000.Among the reasons that they gave were these (in order by prevalence):

  • Lost time to recruit and train another worker
  • Less productivity
  • Lost money to recruit and train another worker
  • Negative effect on employee morale
  • Negative effect on client relations
  • Fewer sales
  • Legal issues
Again, none of this is particularly surprising to me. In fact, the biggest surprise to me is the lack of problem hires.

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