ACR blog Cost of Bad Hire 1124

The Cost of Making A Bad Hire is Rising. Here’s Why

Businesses never want to make a bad hire. Hiring an employee that isn’t a long-term fit for your organization is counterproductive to your overall success. Not only can time spent on functions like screening, recruiting, and interviewing add up in a hurry, but onboarding and training costs bring additional—and unnecessary—costs into the fold.

The Secret to Securing Top Talent

Since the outbreak of the COVID-19 pandemic, businesses have been forced to handle greater operational and financial constraints. Wasting time and making mistakes on poor hires is impacting companies more than ever before. Here are some of the reasons why organizations should be committed to finding the right candidate to avoid wasting time, effort, and money during the recruiting process.

High replacement costs

According to a study conducted by the U.S. Department of Labor, the average cost of each bad hire is equal to at least 30 percent of the individual’s annual earnings. For an employee that’s making $100,000 per year, that’s an estimated $30,000 in turnover costs. As millions of American workers are quitting their jobs en masse—including a record 4.3 million in August alone—businesses across the country are discovering just how expensive it can be to replace these employees. Internal talent acquisition teams are working round the clock to secure qualified talent for their organizations—helping them prevent operational disruptions and maintain business continuity.

Read more about why employee resignations are at an all-time high.

Tight labor market

The labor market has shifted from an employer-dominated landscape to one that is now controlled by candidates. Because of labor shortages caused by the pandemic, employees with in-demand skill sets have greater autonomy to dictate their compensation, remote work flexibility, and other important elements of their employment during negotiations with prospective employers. If your organization is not prepared to grant or concede to some of these candidates’ demands, it may be difficult to attract first-rate talent. And without being able to recruit high-quality talent, your business runs the risk of making wrong hires more frequently.

Learn how to attract top talent despite the current labor shortage.

Lengthy recruiting and onboarding timelines

Recent data published by LinkedIn revealed that in 2021, the average candidate recruiting process took between 33 days (for administrative jobs) and 49 days (for engineering roles). If your company is faced with a sudden employee departure, it likely isn’t prepared to lose over a month of production while waiting for a potential replacement. When finally finding a worker to fill the void, the onboarding process presents an additional hurdle to getting this individual fully up to speed with your organization. It’s imperative to find a suitable replacement for each position to avoid losing more time in the event of additional turnover.

Discover how your company can retain talent during The Great Resignation.

Time spent on training and development

When bringing a new worker into your organization, providing proper training is key to the individual’s success. Companies should understand the importance of laying the right foundation and giving the individual the keys to succeed. But ultimately, these training sessions take time—and considerable effort—to execute. Last year, Training Magazine reported that organizations spent over $1,100 per employee on training alone. Internal resources are taking valuable time out of their day to facilitate these educational meetings. If your employee turnover is high and leaders are spending significant time training new resources, both morale and productivity are sure to decrease—leading to considerable lost business opportunities.

Explore how you can breed a successful learning & development (L&D) program.


In today’s volatile business environment, companies can’t afford to run the risk of making a bad hire. From added recruiting costs to time spent on wasted employee training sessions, making a recruiting mistake can have considerable financial and operational ramifications on your organization. The success of your company is ultimately dependent on your people, so be sure that you’ve fully vetted and evaluated each prospective candidate before deciding whether to bring them aboard. All decision-makers should be supremely confident in the individual’s commitment to the future of your organization. By finding a candidate that’s fully invested in the long-term viability of your business, concerns about making the wrong hire will quickly fade away.

Interested in partnering with an outsourced recruitment provider? Discover more about Acara’s contingent staffing, direct placement, and full suite of workforce services.

Get in touch with our team