The Profit Draining Costs Of A Bad Hire [Infographic]


It can be easy to make a bad hire.  You need to fill a position urgently and you haven’t been getting quality candidates.  So, you opt for the next best thing.  The best of what is available now.  You think short term solution without reflecting on the costs of a bad hire.


Managers have three fundamental responsibilities.  They need to hire great employees, then develop and retain them.  Too often, companies get stuck taking short cuts in all three areas.  They don’t take the time necessary to make the right hire, they rush the training and then don’t invest in keeping employees engaged.


The consequence to trading in long terms gains for short term solutions is a drain to your profits.


75% of employers say they have made a bad hire.  Out of those bad hires, I would be curious to know how many knew that they were trading off the potential of finding the right candidate for the urgency of filling a position.


As a leader, I have made this costly mistake more than once.  I have made bad hiring decisions that have cost me time and impacted my team negatively.  The majority of times, I knew that I was not choosing the best candidate but the best of what was available.  They were costly lessons to learn.


When a bad hire is made, it not only impacts performance but the rest of the team who have to compensate for the reduced productivity.


Hiring the right person for the job is one of the most important decisions you’ll need to make. A bad hire can end up affecting a lot more than just one job. The effects of a bad seed in a company can have measurable negative impacts on productivity and stress, not to mention the risk of employee theft.


EBI identified the cost of a bad hire in all of its forms, from training costs to lost productivity.


The Infographic below shares some important highlights of the draining costs of a bad hire:


According to a CareerBuilder survey:

  • 58% didn’t produce the proper quality of work
  • 51% didn’t work well with others
  • 49% of hires’ skills did not match what they claimed
  • 45% had immediate attendance problems


How do these bad hires impact a company’s bottom line?


Costs of a bad hire:

  • 43% of lost revenue can be attributed to employee theft
  • $62 billion in lost revenue per year from poor customer service
  • $450-$550 billion in productivity is lost each year in the U.S. due to unhappy workers
  • Roughly $500 billion is lost each year in the U.S because of workplace stress due to loss of productivity, absenteeism, and employee turnover


Zappos CEO Tony Hsieh once estimated bad hires had cost the company “well over $100 million.”  Before you make your next hire, remember the following infographic and ask yourself, “should I make the offer or keep looking?”



Please include attribution to EBI Inc. with this graphic.

Cost of a Bad Hire