$17,000 According to Careerbuilder
Results from a recent CareerBuilder/Harris Poll study quantify the cost of hiring mistakes. The 2016 survey of 2,379 hiring managers and HR professionals looked at hiring mistakes and the value of background checks.
75% of companies surveyed reported hiring misfires, and 37% stated that candidates had lied about their qualifications.
Negative effects on business included:
- Loss of productivity (36% or respondents
- Compromised quality of work (33%)
- Negative effect on morale (31%)
- Lost recruiting and training time (30%)
- Redundant costs (30%)
- Additional management time required to assist poor hires (29%)
Assessment of costs varied according to the size of respondent’s companies. Companies with fewer than 500 employees assessed the average cost of a bad hire at $11,000. Companies with more than 1,000 employees calculate a $24,000 loss.
The majority of companies surveyed (72%) indicated that they conduct background checks before hiring.
Background analysis includes:
- Criminal checks (82%)
- Previous employment confirmation (62%)
- Confirmation of identity (60%)
- Validation of education (50%)
- Check for illegal drug use (44%)
- Licensing checks (38%)
- Credit checks (29%)
20% of survey respondents reported that they were able to identify hiring mistakes within one week of employment. 53 percent identify poor hires within 3 weeks.
Source: Careerbuilder news release, 11/17/16.