$17,000 According to Careerbuilder

Bad Hire Name BadgeResults 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.