The Cost of a Bad Hire
October 13, 2025
Hiring the wrong person to fill a role comes with some obvious consequences. First off, it’s a huge waste of time. Someone in your organization dedicated time and effort to reviewing resumes, interviewing candidates, and onboarding the hire. Unfortunately, that time also costs money. The bad hire costs don’t end there, though.
Keep reading to learn more about the negative effects of a bad hire. Then, you can discover ways to help ensure you select the right professionals for every open position in your organization.
The True Price of a Bad Hire
Let’s start by looking at some of the direct and indirect costs of a bad hire. Then, you can learn more about how good workforce risk management makes it possible to avoid these costs.
Turnover
Turnover has several direct and indirect costs. Some of the most concerning direct costs include:
- Paying for the former worker’s unemployment benefits
- Advertising to find a replacement
- Human resources time dedicated to screening and interviewing potential replacements
- Paying for background checks
- Any signing bonuses or relocation expenses you need to pay the replacement
Indirect costs often include:
- Decreased cultural cohesion
- Lower customer and client retention
- Lost skills that take time and money to replace
Lost Productivity
Losing an employee makes it more challenging for your workforce to achieve its goals. Suddenly, they have one fewer team member contributing to their efforts.
Cultural Impact
If you’re forced to fire someone, it could also disrupt employee morale. Some people will likely agree with your decision, but some might feel that it was inappropriate. Anyone who feels aggrieved will need time to adjust.
Additionally, any new person you bring to the team will need time to find their place within the organization’s culture. They might not fit your team’s norms and expectations right away, which can lead to further disruptions to group cohesion.
Customer Dissatisfaction
Any lost productivity and changes in culture can reflect poorly on your company. If customers notice delays, they could become dissatisfied enough to choose one of your competitors.
Make sure you have reliable workforce risk management in place so you can prevent — or at least minimize — any problems that will affect customers. If there’s something wrong within your company, customers will eventually notice and wonder whether they can get better products and services elsewhere.
How the Right Workforce Partner Reduces Risk
In rare cases, it’s nearly impossible to recognize a bad hire. There’s always a chance that someone could successfully fake their way through the interview process. When that happens, you only know you’ve made a mistake after onboarding. You might not even realize it until months later, when the person’s true personality shows that they don’t fit your company culture.
Unfortunately, small companies with small HR teams suffer the most when they make bad hires. A large corporation can have other employees fill the gaps while it looks for a replacement. Also, they typically have enough money to cover advertising, training, and onboarding.
The disruptions to SMBs are more obvious. That’s why it makes sense for them to outsource hiring to recruiting networks with effective talent solutions.
Staffing companies already have the right processes in place, so they can consider your unique needs to avoid the risk of bad hires.
Strategic Hiring for Long-Term Success
Business stability relies on hiring skilled people who match your company culture. When you have fewer than 100 employees, even one person can negatively affect everything from group cohesion to revenue.
Strategic hiring for long-term success positions your business to avoid bad hires, so you can concentrate on building an efficient team that meets all client and customer needs.
Of course, it isn’t easy for small HR departments to develop processes that help ensure more effective hiring. You can avoid that headache by partnering with a professional staffing agency that prioritizes fit, retention, and growth. It’s about much more than filling an open role today. It’s about building a company that excels.
Protect your bottom line by investing in smarter hiring strategies managed by a trusted workforce partner like Snelling. Reach out today so we can connect you with a regional office that knows how to meet your unique needs.