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Bad hire will cost your company $50,000

Staff writer ▼ | May 10, 2013
A new study from CareerBuilder shows that hiring the wrong person can have serious implications for companies: the average loss per bad hire is $50,000.
Bad hire
Bad hireA new study from CareerBuilder shows that hiring the wrong person can have serious implications for companies: the average loss per bad hire is $50,000.


More than 50% of employers in each of the ten largest world economies said that a bad hire has negatively impacted their business. Someone who turned out not to be a good fit for the job or did not perform it well was a source of a significant loss in revenue or productivity or challenges with employee morale and client relations.

For example, among those reporting having had a bad hire, 27% of U.S. employers reported a single bad hire cost more than $50,000. In the Eurozone, bad hires were most expensive in Germany, with 29% reporting costs of 50,000 euros ($65,231) or more.

"Making a wrong decision regarding a hire can have several adverse consequences across an organization. When you add up missed sales opportunities, strained client and employee relations, potential legal issues and resources to hire and train candidates, the cost can be considerable," said Matt Ferguson , CEO of CareerBuilder.

In the United Kingdom, 27% of companies say bad hire costs more than 50,000 British pounds. Three in ten Indian employers (29 percent) reported the average bad hire cost more than 2 million Indian rupees ($37,150), and nearly half of surveyed employers in China (48 percent) reported costs exceeding 300,000 CNY ($48,734).

The BRIC countries (Brazil, Russia, India and China) - markets that house the largest number of employers planning to increase the hiring of full-time employees this year - were the most likely to report being affected by a bad hire in the last year. However, the majority of employers in all top markets reported similar experiences.

Russia - 88 percent
Brazil - 87 percent
China - 87 percent
India - 84 percent
U.S. - 66 percent

The global survey, conducted online by Harris Interactive included more than 6,000 hiring managers and human resource professionals in countries with the largest gross domestic product.


 

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