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What Does a Bad Hire Cost Your Business?

Few managers are happy with every hire they’ve ever made. Despite all the precautions taken in the hiring process, there is always the occasional bad fit that somehow makes it through. Even though an at will business relationship gives you the option of dismissing a bad hire that doesn’t work out, that one bad decision may already have cost you much more than you think.

The cost of a bad hire – How much is really at stake?

Though you might get some quality work out of an employee before you realize that things aren’t working out, a bad hire will never break even. The Department of Labor estimates that making a bad hiring decision costs, on average, at least 30% of that employee’s annual salary. In fact, higher level employees may cost much more than that to replace. Either way, you’re looking at a direct monetary loss of thousands of dollars for a single mistake.

Wasted time

By the time the error is recognized, you and your team may have spent dozens of hours training (or attempting to train) your new employee. Wasting your most valuable resource in this way means that your staff won’t be fully focused on their own projects.

Lost productivity

Of course, the negative effect on productivity goes beyond the hours spent in training. Bringing on a new hire generally leads you to restructure your team to include the new member in your upcoming plans. When you’re forced to fire them and start from scratch, it can take a long time for your plans to get up to speed again.

How a bad hire can decrease morale

Although some new hires turn out to not have the skills that they claimed to, many problems come down to personality issues. Once a new employee joins your team, you may quickly learn that their personality is not compatible with your workplace. This negative influence can be long-lasting, and it may even affect your employees’ trust in you as a leader.

Avoiding mistakes with a stronger hiring process

Avoiding bad hires comes down to collecting as much information as possible before making a decision. At Chane Solutions, we understand how vital this step is to your company’s success. Our comprehensive background screening services can be tailored to meet your exact demands, guaranteeing that you can make an educated hiring decision every time. To learn more about performing professional background checks, contact us today.

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