Cost of a Mis-Hire

Mis-Hire Costs Include:

Hiring Costs:

• recruitment, search, and advertising fees
• outside testing, interviewing, background checks
• HR department time and administrative costs (for all candidates interviewed, not just the one hired)

 Compensation:

• salary and bonuses multiplied by the number of years employed.
• stock options, benefits, direct business expenses
• training costs

 Severance:

• severance fee (salary, benefits), lawyer fees
• outplacement counseling fees
• cost in lawsuits caused by person (EEOC, harassment, OSHA, etc.)

 Opportunity Cost:

• loss of new business and ideas a great employee would have brought.
• loss of production due to lower morale from other employees
• value of a key customer who was lost or driven away.

Wasted Hours

• number of additional hours spent dealing with mis-hires weak points:
  • patching things up with customers
  • re-doing or double-checking work.
  • increased workload due to mis-hire not being able to handle their own workload

The ability to attract, recruit, and retain great talent is the key to success for any business.