Costliest Part of a Bad Hire Isn’t What You Think

Lower morale, productivity biggest pitfalls

As expensive as it is to replace a bad hire, the money isn’t what concerns employers most. In a Robert Half survey, chief financial officers (CFOs) said the single greatest impact of a poor hiring decision is lower staff morale (39%), followed closely by lost productivity (34%). Monetary costs came in third, garnering 25% of the response.

The survey is based on interviews with more than 2,100 CFOs from a stratified random sample of companies in more than 20 of the largest U.S. markets.

View an infographic of the results.

“There are a number of reasons someone may not be a good match for a job. He or she may lack the requisite skills or be a poor personality fit, for example,” says Paul McDonald, senior executive director for Robert Half. “Interviews and reference checks are designed to ensure a successful hire, but these methods are not fail-safe, particularly if employers are not thorough in their efforts.”

McDonald adds that no matter the root cause of a bad hiring decision, it can spread negativity rapidly. “A poor hire can cause friction as other employees are left to take on extra work and fix projects that weren’t done right the first time. Bad hiring decisions also can cause staff to question management’s judgment and even lose faith in company leaders.”