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How much does a bad employee cost the boss?


Mary Lorenz, CareerBuilder Writer


e.g. Registered Nurse

Toronto, ON or M9N 2Y9



They may not have experienced the type of PR nightmares that Netflix experienced from its ill-conceived decision to launch Qwikster or Yahoo! Inc. saw after firing CEO Carol Bartz over the phone, but two-thirds of American companies say they've made business mistakes this year they wish they could take back. Those mistakes, according to a new survey, came in the form of bad hires, the results of which ended up costing them in more than just bruised egos.

According to a new CareerBuilder survey on the cost of a bad hire, 69 percent of employers reported that bad hires lowered their company's productivity, affected worker morale and even resulted in legal issues.

Forty-one percent of companies estimate that a bad hire costs more than $25,000, and one in four said it costs more than $50,000.

While some mistakes are beyond the hiring manager's control, there are ways to avoid hiring the wrong person. "The more thoroughly the candidates are vetted, the less likely they will be a poor match," says Rosemary Haefner, vice president of human resources at CareerBuilder.

Haefner advises employers to allow job candidates the opportunity to meet as many employees in the department as possible – especially if they will work closely together. Also, candidates should provide ample evidence to show they have the skills and work experience required for the position.

Hiring mistakes happen...but why?
When asked to give a reason for the bad hires, an estimated 34 percent of employers attributed the mistake to the fact that sometimes things just don't work out. A rushed decision, however, topped the list of reasons companies gave for making a bad hire.


The price of a bad hire: It's more than just money
The price of a bad hire adds up in variety of direct and indirect ways. For example, 9 percent of companies said bad hires result in legal issues and 11 percent said they result in fewer sales. The most common effects of a bad hire are:


  • Lost worker productivity: 41 percent

  • Lost time to recruit and train another worker: 40 percent

  • Costs associated with recruiting and training another worker: 37 percent

  • Negative impact on employee morale: 36 percent

  • Negative impact on client solutions: 22 percent


How bad is bad? Characteristics of a bad hire
When it comes to what makes someone a bad hire, employers reported several behavioral and productivity related problems:


  • Failure to produce the proper quality of work: 63 percent

  • Failure to work well with other employees: 63 percent

  • Negative attitudes: 62 percent

  • Immediate attendance problems: 56 percent

  • Subject of customer complaints: 49 percent

  • Failure to meet deadlines: 48 percent


Mary Lorenz is a copywriter for CareerBuilder and contributes to its employer blog, TheHiringSite.com.



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