How Much Does Hiring the Wrong Person Cost?

Business & Entrepreneurs

When we look at recruiting costs, it’s easy to think of it as the cost of running ads and then that new hire’s salary. But, there’s so much more that goes into the cost of hiring that hiring the wrong person can actually end up costing you upwards of $40,000. How could it possibly be that much? In this blog we’ll cover the hidden costs of hiring the wrong candidates, from tangible factors like salaries, equipment, and needing to post job advertisements over and over again, all the way to intangible factors such as lost team morale, lost time training someone not right for the job, and lost productivity from your management team and other team members. 

How much does hiring the wrong person cost? Far too much! Work with Recruitment Partners to save your money by hiring the RIGHT person.

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Cost of Hiring a New Employee


the cost of hiring a new employee


Did you know that it costs companies anywhere from $7500 to $19,000 every time they have to hire a new employee? There are a lot of costs associated with hiring that not many of us think about, so hiring the wrong person and having to go through the whole process all over again can be incredibly costly. If it takes two or three hires to find the right fit, that could be $60,000 in hiring costs and all you’ve done is onboarding!

How does hiring a new person cost so much? You may ask. Well, most of it comes down to time spent. Hiring new employees is incredibly time consuming for several people in your company – typically the administrative decision makers. So, not only are they spending a lot of time hiring, but it also means they don’t have the time to do other productive work for the company.

Costs Of Hiring Include:

  • The time it takes to write and post job openings
  • The time and money of boosting job posts on job platforms like Indeed and LinkedIn
  • The time it takes to perform resume and cover letter screenings
  • The time to call prospective candidates and conduct initial phone interviews
  • The time for follow up interviews (of which there are usually a minimum of two) where multiple administrative and executive parties are present
  • The time spent following up with candidates, making offers, and finding a start date.

How Poor Hiring Can Cost Your Bottom Line

When you have a position to fill, it can be tempting to hire the first qualified candidate just to get the hiring process over with. If you’re performing candidate searches yourself this can take a lot of time out of your day, causing you to be less productive and potentially even miss deadlines. Screening candidates, going through resumes and cover letters, performing interviews, and finally making an offer take a ton of time, and if you hire the wrong person you’ll end up having to do it all over again far too soon! While taking the time to really vet your new employees can be frustrating, both because they’re time consuming and you’re missing a likely necessary team member, it’s important to be patient and find the right person.

There are many costs to hiring the wrong person, both tangible and intangible, here are a few ways that hiring the wrong person can cost you.

1. Increased Turnover Costs

Hiring and onboarding new employees are costly processes involving job postings, recruitment agencies, and administrative costs. If you have to regularly hire for the same position, you’re multiplying these costs considerably. Training new hires requires time and resources, which are wasted if the employee leaves prematurely. Just like it’s better financially to retain an existing client than to find a new one, it’s much more cost effective to continue professionally developing existing employees. New employees typically take time to reach full productivity. Frequent turnover means constant disruptions and lost productivity.

2. Reduced Employee Morale

Another way hiring the wrong person can impact your bottom line is through impacting your existing employees. Poor hires can disrupt team cohesion and morale, leading to decreased overall productivity. Furthermore, when a poor hire underperforms or leaves, other employees often have to pick up the slack, leading to burnout and dissatisfaction.

3. Lower Quality of Work

When someone isn’t the right fit for your company, they are much more likely to provide substandard work. Employees who don’t necessarily know what they’re doing can make mistakes that cost the company money and damage its reputation. Poor service or product quality can lead to customer complaints, refunds, and loss of business, meaning that hiring the wrong person can have long standing negative impacts.

4. Management and Supervisory Time

Poor hires often require more supervision, taking valuable time away from managers and supervisors who could be focusing on strategic initiatives or pushing projects forward. By hiring the wrong person, you’re usually taking up the time of a lot of your key decision makers. Time spent on performance reviews, corrective actions, and potential terminations for poor hires diverts focus from other critical business areas. Plus, when it doesn’t work out, your management team needs to spend hours reviewing resumes and interviewing new potential candidates.

5. Legal and Compliance Risks

Hiring the wrong person can lead to legal problems, such as violations of labor laws, wrongful termination lawsuits, or harassment claims. Oftentimes, if this wrong hire has made it past the probationary period, you’ll be forced to provide expensive severance in order to let them.  Ensuring compliance with various regulations can be more challenging and costly with incompetent or dishonest employees, so it’s important to know you can trust your new employees.

6. Opportunity Costs

A poor hire might not be able to capitalize on business opportunities or drive innovation, leading to missed revenue and growth potential. Projects may be delayed or fail due to lack of competence, costing the company potential market advantages.

As you can imagine, hiring the wrong person can be a nightmare for companies as they know they’ll have to go through this entire hiring process again and take on all the added costs. That’s why many companies will keep less than desirable employees. 


sad team member

Cost of Onboarding

The first three months of onboarding and training is typically the most expensive part of a new hire’s time at a company as they learn to perform in their role. There is typically very little productivity in the first few weeks, and the time it takes other employees to train new hires is also quite extensive. 

If you were to quantify how much it costs to onboard a new hire, it would include:

  • Administrative hours to set up direct deposits, emergency contacts, and other important documents
  • Purchasing equipment and ergonomic tools for the new hire
  • New technology licences/subscriptions 
  • Time spent training the new hire on specific internal processes for the company
  • Time spent training the new hire on the tasks associated with their role
  • Time introducing your new hire to clients and customers
  • The learning curve where your new hire isn’t as productive as other coworkers
  • Issue management and fixing mistakes made during the learning process

All in all, the first three months can be incredibly costly to a business, and if your new hire doesn’t end up working out then you have to repeat the entire process. 

9 Benefits of Patiently Waiting to Hire the Right Person

Call us to hire the right person!

Being patient and ensuring you hire the right person is critical for several reasons, all of which contribute to the long-term success and stability of a business. While the cost savings listed above are clear reasons not to hire the first person who’s qualifications match the job description — high turnover rates cost thousands— here are some other benefits to being patient while looking for new employees.

  1. The right person can start contributing effectively from day one, minimizing the time and resources spent on training and onboarding.
  2. A well-matched employee is more likely to perform at a high level, contributing to overall business productivity and efficiency.
  3. Hiring the right person helps maintain a positive team dynamic, as they are more likely to collaborate well with existing team members.
  4. A good hire can boost team morale and engagement, leading to a more motivated and productive workforce.
  5. Employees who are well-suited to their roles are more likely to deliver high-quality work and excellent customer service, enhancing the company’s reputation.
  6. A reputation for thoughtful and careful hiring can attract higher-quality candidates in the future.
  7. The right employees are often more innovative and better at problem-solving, driving the company forward and adapting to changes in the market.
  8. Hiring the right people can identify future leaders within the organization, ensuring sustainable growth and continuity.
  9. Employees who fit well within the company culture are more likely to uphold the company’s ethical standards and values.

Trust Recruitment Partners to Help You Find the Right Candidate

You can trust Recruitment Partners to help you hire the right person…the first time! Our team has proven expertise, comprehensive screening processes, and a personalized approach to understanding your company’s unique needs. With a team of seasoned recruiters, Recruitment Partners employs a meticulous selection method that includes thorough background checks, skills assessments, and cultural fit evaluations, ensuring that only the most qualified candidates are presented. Our commitment to quality and attention to detail significantly reduces the risks associated with poor hiring decisions. By partnering with Recruitment Partners, you gain access to a vast network of top-tier talent and the assurance that your new hires will contribute positively to your organization’s growth and success from day one.

Start Hiring with Recruitment Partners.

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