Impact of Bad Hires

Nearly Seven in Ten Businesses Affected by a Bad Hire in the Past Year, According to CareerBuilder Survey

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Nearly Seven in Ten Businesses Affected by a Bad Hire in the Past Year, According to CareerBuilder Survey

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Impact of Bad Hires

Table of Contents

Nearly One-in-Four Employers Reported a Bad Hire Cost Them More than $50,000

CHICAGO, Dec. 13, 2012 –Finding the appropriate candidate to fill a position can be challenging, and a recent CareerBuilder study demonstrates that making the wrong choice can be expensive. Sixty-nine percent of employers claimed that this year, a poor hire had a negative impact on their businesses, with 41 percent of those companies estimating a cost of over $25,000. 24 percent of respondents claimed that a poor hire cost them more than $50,000.

“The impact of a bad hire is significant, whether it’s a negative attitude, lack of follow through, or other concern,” said Rosemary Haefner, vice president of human resources at CareerBuilder. In addition to affecting production and morale, it can also have a negative financial impact.

Effects of a Bad Hire

  • The price of a bad hire adds up in a variety ways. The most common are:
  • Less productivity – 39 percent
  • Lost time to recruit and train another worker – 39 percent
  • Cost to recruit and train another worker – 35 percent
  • Employee morale negatively affected – 33 percent
  • Negative impact on clients – 19 percent
  • Fewer sales – 11 percent
  • Legal issues – 9 percent

Characteristics of a Bad Hire
When classifying what makes someone a bad hire, employers reported several behavioral and performance-related issues:

  • Employee didn’t produce the proper quality of work – 67 percent
  • Employee didn’t work well with other employees – 60 percent
  • Employee had a negative attitude – 59 percent
  • Employee had immediate attendance problems – 54 percent
  • Customers complained about the employee – 44 percent
  • Employee didn’t meet deadlines – 44 percent

Why Companies Make Bad Hires
The most common reason associated with a bad hire is rushing the decision process. Two-in-five hiring managers attributed a bad hire to pressure to fill the job opening.

  • Needed to fill the job quickly – 43 percent
  • Insufficient talent intelligence – 22 percent
  • Sourcing techniques need to be adjusted per open position – 13 percent
  • Fewer recruiters due to the recession has made it difficult to go through applications – 10 percent
  • Didn’t check references – 9 percent
  • Lack of strong employment brand – 8 percent

One-in-four employers (26 percent) stated they weren’t sure why they made a bad hire and said sometimes you just make a mistake.

Survey Methodology
Between August 13 and September 6, 2012, 2,494 recruiting managers and human resource specialists (working full-time, not self-employed, non-government) participated in an online poll conducted by Harris Interactive on behalf of CareerBuilder (percentages for some questions are based on a subset, based on their responses to certain questions). With a 95 percent probability, it is possible to state that the overall results have a sampling error of +/- 1.96 percentage points with a pure probability sample of 2,494. Data from sub-samples have higher and more variable sampling error.

About CareerBuilder®
CareerBuilder is the global leader in human capital solutions, helping companies target and attract their most important asset – their people. Its online career site, CareerBuilder.com®, is the largest in the United States with more than 24 million unique visitors, 1 million jobs and 49 million resumes. CareerBuilder works with the world’s top employers, providing resources for everything from employment branding and talent intelligence to recruitment support. More than 10,000 websites, including 140 newspapers and broadband portals such as MSN and AOL, feature CareerBuilder’s proprietary job search technology on their career sites. Owned by Gannett Co., Inc. (NYSE: GCI), Tribune Company and The McClatchy Company (NYSE: MNI), CareerBuilder and its subsidiaries operate in the United States, Europe, South America, Canada and Asia. For more information, visit www.careerbuilder.com.

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