The true cost of a bad hire and how to make it a thing of the past

Let’s face it, most businesses have made a bad hire, and although on paper the recruitment process is simple but when it goes wrong, the cost can be much more impacting than the price of an advert.

A structured, well-thought-out recruitment process should be a strategic investment contributing to long-term performance, culture, morale, cost control, and reputation (your employer's brand).

Why is it essential to get it right

Fit and performance: A robust process helps ensure that you hire people who have the right skills, but also the right attitude, cultural fit, values, and promise. A great hire should meet your expectations, grow within their role, and contribute to company growth.

Efficiency & cost control:

Recruitment takes time, effort, and money. A structured and efficient process will reduce time wasted in screening irrelevant applications, dragging out hiring, and ineffective interviews. Also, if done right, it avoids repeated hiring for the same role.

Employee morale & retention:

A poor hire can drag down your team’s morale, create additional workload for those picking up the pieces, increase staff turnover, and disrupt the internal culture. A hit-and-miss hiring process can also reduce trust in your leadership and how you are perceived by your team and your peers.

Your employer brand:

Is how people view you as an employer. A candidate could be a potential customer, partner, or public voice. If your process is slow, impersonal, or careless, word gets around. In fact, they are more likely to tell their friends and family about a bad experience over a good one, making it harder for you to attract top talent in the future.

Legal risks:

A poor hiring process can lead to discrimination claims, wrongful dismissals, and failure to comply with employment laws, especially with the new Employers' Rights Bill looming.

So what’s the actual cost when recruitment goes wrong

When hiring goes badly, the damage is fourfold. It’s not just the cost of a salary; here are a few UK-based costs to illustrate the impact on a business:

Direct financial cost of recruitment: According to data, the average cost per hire is about £6,125, including adverts, agency fees, internal staff time, onboarding, etc.

And for senior/management roles, it can be around £19,000 or more. Source: StandOut CV

Nationally, the UK economy loses an estimated £17.6 billion annually due to ineffective recruitment. Source: Institute of Customer Service

A study found that businesses lose between £15,000 to £30,000 when a hire does not work out. Source: CV-Library

One report estimated the cost of hiring the wrong candidate at roughly £16,843 (including recruitment, training, and loss of productivity). Source: Adria Solutions

Hidden costs  

•  lost productivity: when someone is underperforming, others have to pick up the slack
• time that managers & HR have to spend on performance management, mentoring, and dealing with issues
• additional staff turnover costs in re-hiring and onboarding replacements
• opportunity costs. What could have been achieved had the right person been in place?
• damage to team morale, culture, leading to further attrition
• reputation/employer brand damage, leading to fewer quality applicants, poor reviews, and loss of candidate confidence

Candidates expect a positive experience regardless of the application outcome. If your hiring process is slow, inconsistent, or feels unfair, candidates will share their experiences on Google, Trustpilot, or Glassdoor, deterring other good candidates from considering you as a potential employer.

Even your customers and partners in business might question your professionalism based on how you treat your people. A poor hire in a client-facing role can damage client relationships directly, and for more senior roles, the cost of a bad hire can be huge.

As the labour markets get tighter (or with niche roles), the top candidates will favour organisations with good reputations, clear processes, and transparency. If you're known for being disorganised or “slow”, you’ll lose out.

But it's not all bad news…by making changes to your internal recruitment process, you can save a shed load of time and money, mitigate unnecessary stress and loss of credibility, save your employer brand from damaging reviews, and your bottom line.

Here’s how…

You ask us to help you identify the bottlenecks and implement a workable recruitment process that you can use time and time again.

We will give you the knowledge and the tools to help you with the whole candidate journey, from the planning, job descriptions, advertising, selection, interviews, decision making, offers, and rejection to the onboarding (which incidentally starts as soon as you start looking). 

Here are some pointers that will get you started: Be precise about what skills, experience, behaviours, values, cultural fit, and performance expectations each role requires. Start with planning what it is you really need and draft your job descriptions clearly, making sure all the stakeholders are involved in the planning process.

Structured & standardised process: 

• use consistent steps (screening, assessments, interviews) so candidates are evaluated fairly and objectively
• use scorecards or criteria to assess candidates, to reduce unconscious bias and variability
• ensure multiple stakeholders are involved (e.g., the team, direct manager, maybe cross-functional) to assess culture fit and different perspectives

A good candidate journey

• keep candidates updated with clear instructions on what to expect and give feedback when possible
• communicate respectfully and transparently in a timely manner, giving feedback where possible thanking unsuccessful candidates for their interest
• use data and metrics like time-to-hire, cost-per-hire, candidate drop-out points, quality of hire, retention after 6/12 months, etc. and use your finding to benchmark against future hires
• look for constant improvement, for example, if candidates drop out after interviews, maybe the interview content could be improved
• where possible, ask for candidate feedback (good and bad)

The onboarding should start as soon as you start looking, from the initial communication to their 1st day/week/month.

Setting clear expectations, mentoring, regular feedback, and support will make or break whether someone turns into a long-term success.

Your message as an employer: Be clear about your values, culture, and what makes you a good employer. The message you convey in your job adverts, in interviews, in public content (web, social media) needs to be coherent and consistent.

• encourage employees to share their positive stories. This helps reinforce your brand and creates trust and confidence
• make sure that your external reviews (on employer rating sites) are monitored, responded to, and improved
• use technology where you can:  Applicant Tracking Systems (ATS) to streamline screening, scheduling, and feedback
• assessments (skills tests, personality/culture fit) where appropriate
• automation of repetitive tasks to free up HR/recruitment time for more strategic parts

Continuous improvement:

When it’s all done and dusted, review how things went. What worked? What didn’t? Where were delays or problems? What feedback did candidates give? Use your findings to make improvements for future hiring campaigns.

Conclusion:

A robust hiring process is more than just filling vacancies. It’s about protecting your business financially, culturally, and reputationally. The cost of getting it wrong is high, not just in pounds, but in lost opportunities, morale, and brand strength.

When you invest in a strong process, you’ll hire faster, save money, reduce staff turnover, and benefit from a stronger employer brand, a win-win for everyone!

We’ve been in the industry for over twenty years; we know how to get the very best from a recruitment campaign, and we love to share our knowledge, so if you would like some help, please feel free to get in touch.