How Much Does a Bad Hire Cost Your Company?

July 1st, 2014

When you’re hiring staff for your company, it’s important to hire candidates who are committed to the job. If the candidate leaves within a short time, you will incur both financial and psychological costs, which set your company back. Here are the associated costs of a bad hire:

Training Costs 

When you hire someone, you have routine training costs in order to introduce the candidate to the job. Even if you don’t perform a full-scale training day or week, you still will use company time to train the employee regarding their everyday job duties. You might need to have someone explain some software or company procedures to the new employee. This training represents lost time if the employee leaves shortly thereafter. 

Productivity Costs 

When an employee leaves soon after being hired, your company will lose productivity as another employee steps up to fill that role until the position is once again filled. You will have to start over again with the training and training process, decreasing your productivity until you find a good hire that is willing to stick with the company. 


If your company provides benefits for employees right away, you will lose the amount you invested in that particular employee. This could include vacation time, sick time, or costs associated with retirement plans.

Lower Company Morale 

One of the biggest psychological costs associated with bad hires is that your company will have a lower morale. Whether this morale is associated with reduced productivity, increased workload, or emotions surrounding the departure, it will cost your company and employees. 

Workplace Reputation

If new hires are regularly leaving, your workplace reputation risks being tarnished. Individuals outside the company will begin to wonder if the problem rests within the company itself, and not just with the candidates.

It is important to hire a responsible and loyal candidate if you are running a business so you can eliminate unnecessary costs. Contact Olympic Staffing for assistance. We will perform a thorough screening of all the eligible candidates to ensure you don’t make a bad hire.

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