What is the cost of a bad hiring decision?

Courtesy of http://greenjobinterview.com/2014/01/10-important-statistics-on-bad-hiring-decisions/

  • 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. (-HR.com)
  • As much as 80% of employee turnover is due to bad hiring decisions. (Harvard Business Review)
  • 36% of 1,400 executives surveyed claimed that “the leading factor of a failed hire, aside from performance problems, is a poor skills match.” The second leading factor at 30% was unclear performance objectives. (Study done by Robert Half)
  • 41% of companies polled by Vitamin T Staffing Firm estimated that a bad hire cost more than $25,000, and 1 in 4 companies said that it cost them over $50,000.
  • SayIt Communications calculated the Return On Investment of a bad hire at -298%.
  • 75% of the demand to hire new employees is simply to replace workers who have left the company.

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