Cost of a bad hire: How to avoid expensive recruitment mistakes

A bad hire can be one of the most costly mistakes a business makes, impacting productivity, morale, and ultimately, your bottom line.

The true cost of a poor hiring decision goes beyond salary and recruitment fees—it includes lost revenue, training expenses, and disruption to your existing team. In fact, the REC estimates that the overall cost of a bad hire to a business can be three times higher than the salary paid, making it crucial to get the hiring process right the first time.

Estimated Costs of a Bad Hire

1. Salary Waste
   If a bad hire is earning £35,000 per year and stays for 6 months before being let go:
   👉 £17,500 in wasted salary
2. Recruitment & Onboarding Costs
   • Recruitment agency fees or in-house recruitment time
   • Interviewing and onboarding hours
   • Initial training and equipment setup
     👉 £7,000 – £15,000 depending on role seniority
3. Lost Productivity
   A bad hire often underperforms, slowing down projects or requiring extra support from team members.
   👉 Estimated at 30% drop in team output, equating to £10,000 – £25,000 in lost productivity over several months
4. Team Morale & Turnover
   One poor hire can lead to disengagement or even resignation of high-performing staff.
   👉 Replacing a good employee who leaves due to frustration can cost £20,000 – £50,000 depending on their role
5. Client Impact & Reputation
   If the hire is client-facing, their performance could affect relationships, contracts, or brand trust.
   👉 Lost clients or deals could cost £10,000+, or much more for senior/client-handling roles

Total Estimated Cost of a Bad Hire?

£40,000 – £100,000+ per bad hire — depending on the role, industry, and how long the issue goes unaddressed.

To avoid expensive recruitment mistakes, businesses should focus on…

1. Defining Clear Job Requirements – Ensure job descriptions are detailed, accurate, and aligned with your company’s goals. This helps attract the right candidates and reduces the risk of mismatched hires.
2. Enhancing the Hiring Process – Implement structured interviews, skills assessments, and cultural fit evaluations to make data-driven decisions.
3. Leveraging Recruitment Expertise – Work with a trusted recruitment agency, such as Recruitment Solutions, to streamline hiring and access a vetted talent pool. Whether you need executive search firms or temporary staffing solutions, partnering with professionals can improve your chances of success.
4. Prioritising Onboarding and Retention – A strong onboarding process improves employee engagement, helping new hires integrate seamlessly into your organisation. Offering training and mentorship can further enhance job satisfaction and reduce turnover.

By taking a strategic approach, you can mitigate risks, hire employees fast, and secure the right talent for long-term success. If you need help with your hiring strategy, consider outsourced hiring solutions for a more efficient recruitment process.