Cost of bad hiring

What is the cost of a bad hiring decision?

Courtesy of The average cost of a bad hiring decision can equal 30% of the individual’s first-year potential earnings. (From the US Department of Labor and Statistics) Zappos CEO Tony Hsieh once estimated that his own bad hires have cost the company over $100 million. 66% of employers said they experienced negative effects of bad hires in 2012. Of these employers, 37% said the bad hire negatively affected employee morale. (A study from the National Business Research Institute) 43% of respondents from the National Business Research Institute study said that “the need to fill the positions quickly” was the main reason that bad hires are made. It costs $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee, and $40,000 to replace a senior executive. ( As much as 80% of employee turnover is due to bad hiring decisions. (Harvard Business Review) 36% of 1,400 executives surveyed[read more]

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