Effect of Bad Hiring
- The average cost of a bad hiring decision can equal 30% of the individual’s first-year potential earnings. (From the US Department of Labor and Statistics)
- The successful aren’t immune, and they’ve had to learn from their mistakes. Zappos CEO, Tony Hsieh once estimated that his own bad hires have cost the company well over $100 million.
- 66% of employers said they experienced negative effects of bad hires in 2012. Of these employers, 37% said the bad hire negatively affected employee morale. Another 18% said the bad hire negatively impacted client relationships. And 10% said the bad hire caused a decrease in sales. (A study from the National Business Research Institute)
- 43% of respondents from the same NBRI study cited the need to fill the positions quickly as the main reason that bad hires are made.
- It costs $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee, and $40,000 to replace a senior executive. (From HR.com)
- As much as 80% of employee turnover is due to bad hiring decisions. (From Harvard Business Review)
- 36% of 1,400 executives surveyed claimed that the leading factor of a failed hire, aside from performance problems, is a poor skills match. The second leading factor at 30% was unclear performance objectives. (Study done by Robert Half)
- 41% of companies polled by Vitamin T Staffing Firm estimated that a bad hire cost more than $25,000, and 1 in 4 said that it cost them over $50,000. SayIt Communications calculated the ROI of a bad hire at -298%.
- 75% of the demand to hire new employees is simply to replace workers who have left the company.
Tag:Human Resources
