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The Hidden Costs of Bad Hires

Having an unfilled position is a frustrating aspect of running a business. Work can’t get done, existing employees are overburdened, and the company can’t serve customers as well as it should. Without someone in a needed position, everybody suffers. At some point, managers simply wish they could find somebody to fill the position.


But, as the saying goes, be careful what you wish for; you just might get it. If you become so desperate to find somebody, you might end up with exactly that, “somebody.” You’ll add a name to a title and fill a spot, for however long the relationship lasts. It might take a little while, or it might happen soon after you set up their email account. But eventually, you will question whether the person is really a good fit. And that’s when managers come to realize that a bad hire is actually worse than no hire at all.


Here are five costs of bad hires. Some of them are clear once the bad hire is recognized, and some are hidden costs that you only realize over time.



There’s a cost associated with hiring talent for your business. Posting jobs, gathering resumes, interviewing, and choosing someone to fill a position is a lengthy and costly process. If you utilize a recruiting service to do that work for you, you’ll have a clear idea of what those costs are. And if you do it yourself, you’ll still lose money in the time and energy spent on a bad hire. And because it didn’t work out, you have to do it all over again.



Obviously, the time spent recruiting and choosing someone, only to have to repeat the process, will consume valuable company time. But there are more costs than that.


The days, weeks, or even months the bad hire spends getting acclimated and taking on responsibility isn’t productive time, either. And the moment you realize there’s a problem is just the beginning of the process of making a change. There might be several discussions, meetings, warnings, improvement plans, and other procedures that take place before you officially open the position again. And during all of that time, you have a bad fit in an important role, which means delays occur, goals don’t get met and the entire company suffers. It is a mistake that could cost your business a good portion of the calendar year.



The specific position’s productivity will take a hit with a bad hire. But other losses will be felt in the creative or production process. The time management has to deal with the fallout of a bad hire is time they aren’t focused on their main tasks. Anyone who reports to the person, or receives work product from them, or depends on their contributions to make their own, will see delays. Annual forecasts and goals will become unlikely to be met, and become frustrating reminders of what was expected compared to what actually occurred. A new (and hopefully better) hire will come onboard and get up to speed, but all the time up until then is lost productivity for the business.


Customer Relations.

Customers like consistency. They want to know who their contacts are and appreciate reliable communication. When something or someone jeopardizes their level of comfort, it affects the entire relationship with your business.


If the customer has direct communication with the bad hire, the risks are obvious. They will recognize the lack of compatibility with the job and hold the business accountable. And when a change is made, the turnover can put the relationship in flux, as they’ll have to manage without their expected contact, and they won’t know when a replacement will arrive. The uncertainty with the individual impacts the level of trust with the company.


Even if there is no direct communication, the effects of a bad hire will still impact customers. Whatever delays occur, or to whatever degree quality suffers, the customer’s direct contact will be held accountable. While that person wasn’t responsible, their standing can be affected by someone else’s mistakes. You could even lose a client and not know why, but it’s a cost you’d have to absorb, nonetheless. And even if you keep the client and it merely hurts your relationship, that’s still a significant price to pay.


A bad hire is never an exclusively internal event. There will be a ripple effect that impacts customers, and it could jeopardize your standing as a trusted business partner.


Team Morale.

Like customers, employees also prefer consistency. When a company makes a bad hire, morale can suffer. Workers who had to cover for the open position were probably happy when it was finally filled and won’t appreciate the extra work while it remains open again. And a bad hire can make their jobs difficult while they’re there, adding unnecessary challenges to a busy work environment.


A bad hire’s tenure reflects poorly on the company, which impacts how employees feel about their own jobs. Good workers who had no reason to look elsewhere might see the turnover as a sign they should consider other options. And with talent at a premium, they might find appealing offers, which would make your hiring dilemma that much worse. If employees have to cover for a poor hire or an empty position and get pulled away from the work they enjoy and were originally supposed to be doing, you could lose them as well. At that point, the costs compound exponentially.


Imperium Data Can Help

The obvious solution is to not make a bad hire in the first place and find the right person for the job. Making a great hire isn’t easy, but Imperium Data Consulting has the experience and insight to streamline the process, do the heavy lifting and help you find the right candidate who will strengthen your team. Simply use our contact page for assistance.

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