According to the U.S. Department of Labor, the cost of a bad hire can reach up to 30 percent of the employee’s first-year earnings and CareerBuilder says that 74 percent of companies who made a poor hire lost an average of $14,900 per poor hire. Apart from the monetary repercussions, companies also face loss related to motivation, productivity, and reputation when it makes a bad hire. According to People Matters, a bad hire can have a negative impact on co-workers and the team as a whole, which then has a direct impact on the productivity of an employee or team. Reputational damage is, perhaps, one of the most difficult situations to overcome thanks to websites that offer employee-led company ratings and/or anonymous feedback sites. Liz Kislik lays out four specific actions companies should take to recover from a bad hire. These include directly addressing the issue with the bad hire, attempting to repair the situation, creating an expense pros and cons list, and creating a method for determining if an employee should be terminated.
