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What is the cost of a bad hire in a climate of attrition?


No-one likes to admit when they’re wrong. But according to recent research by Robert Half, 75% of managers surveyed say they have made bad hiring decisions in the past. It is not an uncommon mistake at all. Especially when you consider all the variables that can occur from the moment a job is posted to a new hire’s initial tenure in a company. Perhaps a candidate appeared better on paper than in practice, or there were insufficiencies in the recruiting process that didn’t screen out an unsuitable applicant? Whatever the reason, making a bad hire can have a multitude of negative implications for an organization, such as:

  • Reducing productivity 
  • Lowering morale
  • Reducing employee engagement
  • Lessening team alignment
  • Increasing attrition
  • Time wasting 

But, one of the most damning consequences comes in the form of finance. Over the years, many figures have been bandied about to highlight how much of a drain a single bad hire can be on a company. The US Department of Labor put it at 30% of the person’s salary, while according to The Undercover Recruiter, it can be as high as £50,000. As a singular amount, it’s shocking. But it doesn’t even begin to show the whole financial story…

Getting the full picture

If we take a very conservative estimate that a single bad hire would cost a company around €20,000 (£17K or $23K), with the help of a simple equation, we can see the true, overall price of making poor hiring decisions for your organization:

First year attrition rate x €20,000 x number of hires = cost of bad hiring

So, let’s plot in some example numbers to show how the equation actually works.

10% x €20,000 x 1,000 = €2,000,000

It’s a staggering sum. And one made with some fairly conservative statistics, but it builds so quickly. Try it for yourself and see where your company falls. Organizations are losing astronomical amounts by not suring up their hiring processes. When recruiting decisions are made on a whim, in haste, based on gut, or through disjointed procedures, you multiply the risk of accepting candidates who simply don’t fit the bill. And we’re only looking at the financial cost here, nevermind the time and resources it takes to find, hire, onboard and engage new starters. Can your company continue to afford this?


The current situation

Making a bad hire in any climate is less than appealing. But in a post-pandemic world, where attrition rates have risen to such heady heights that the situation is now being referred to as “The Great Resignation,” companies are fighting wars on two fronts – both trying to ensure they hire the right talent and equally ensure that they retain this staff.

A recent PWC survey found that 65% of American workers are looking for a new job, and 88% of executives agree that turnover is much higher than usual. The reasons for the exodus won’t surprise either, with flexibility, career advancement and salary being touted as three of the major culprits. We recently spoke with Steve Mair, the VP of Talent Acquisition at Procore, on The Shortlist and he added to this sentiment, stating that “people have had time to pause and reprioritize what’s important.” The pandemic has given employees clarity over what they want, and if an organization isn’t providing for their needs, it’s never been easier to jump ship.

Catch Steve’s full appearance on The Shortlist here

How do we stem both tides?   

We have seen how costly losing employees is. Whether it’s from a bad initial hire or through increased rates of attrition, organizations HAVE to become more scrupulous when it comes to finding and retaining the right talent. Luckily, the SocialTalent learning platform is ideally placed to help. We have missions specifically tailored to enable organizations to not only optimize how they hire candidates but also, leadership training to ensure that your talent feels engaged and appreciated. Let’s take a look at some examples: 

Interview training

Join John Vlastelica, the Founder of Recruiting Toolbox, and find out how to get the most out of your interview process so you can drastically increase the odds of hiring the right candidates for your organization. His “Predicting Success module, for example, teaches about the power of alignment and how hiring managers can drive for speed, quality and diversity when interviewing.

Remote team management 

Jason Lauritsen and Linda Jonas teach a comprehensive program about leadership best practices for remote teams. They break down every facet, from communication guidelines and the importance of wellbeing to feedback protocols and tips on productivity. This online training on managing remote teams is the holy grail for organizations looking to reduce frustrations and keep their teams engaged, content, connected and productive.

The stay interview

Renowned leadership coach and bestselling author, Dr. Bev Kaye, leads a series of online courses on the SocialTalent platform that upskill managers in how to develop and retain talent. Using unique tools, like conducting “stay interviews” to find out what drives and motivates your staff, Bev’s content will help you lower unnecessary attrition and empower leaders to care for and nurture their teams.


There has never been a more appropriate time to take a temperature check on your company’s talent situation. Making bad hires, especially in an atmosphere of increased attrition, can cost you dearly. So run the numbers. Find out where your organization stands and sure up your hiring and management processes. It’s not an easy task, but it’s one worth tackling.

Want to learn more about The Great Resignation and how to combat increasing rates of attrition? Sign-up for our online, talent leadership event, SocialTalent Live: Hiring at scale during The Great Resignation, taking place on November 18.

Unsure of where to start? SocialTalent’s learning platform will help you optimize hiring processes and improve employee engagement. Get in-touch with us today.

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