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What’s the Cost of a Bad Hire? A Global Perspective

Global Cost of Bad HireLast month, a CareerBuilder study revealed how businesses in countries all over the world are struggling to find the right talent to fill open positions – and the negative impact it is having on business.

But is it better to leave a position unfilled or take a chance on a potentially wrong fit? Today, a new survey from CareerBuilder brings this question to the forefront.

According to a the survey of more than 6,000 hiring managers and human resource professionals worldwide, more than half of employers in each of the 10 largest world economies have felt the affects of a bad hire. (A bad hire, in the context of the study, was defined as someone who either turned out to be a poor fit for the job or did not perform it well.)

While it should come as no surprise that poor hires can mean revenue and productivity losses, the study sheds light on just how much those costs add up. For example, 27 percent of employers in the U.S. who reported a bad hire said that a single bad hire cost more than $50,000. In Germany, 29 percent of employers report losses of 50,000 euros ($65,231) or more. In the U.K., 27 percent of companies say bad hire costs more than 50,000 British pounds.  Three in ten Indian employers (29 percent) reported the average bad hire cost more than 2 million Indian rupees ($37,150), and nearly half of surveyed employers in China (48 percent) reported costs exceeding 300,000 CNY ($48,734).

Percentage of Employers Reporting Bad Hires
While 66 percent of U.S. employers say they have been affected by bad hires in the last year, the BRIC countries (Brazil, Russia, India and China) have it far worse:

  • Russia – 88 percent
  • Brazil – 87 percent
  • China – 87 percent
  • India – 84 percent
  • U.S. – 66 percent
  • Italy – 66 percent
  • U.K. – 62 percent
  • Japan – 59 percent
  • Germany – 58 percent
  • France – 53 percent

Business Impacts of a Bad Hire: A Global Perspective
The BRIC countries were generally more likely to report a variety of negative effects tied to a bad hire such as productivity and revenue losses while U.S. ranked high in citing an impact on employee morale and cost to recruit and train another worker.  European countries ranked lower in almost every category, which may in part be attributed to slower hiring in those markets.

Lost Productivity

  • China – 57 percent
  • Russia – 45 percent
  • India – 42 percent
  • Brazil – 40 percent
  • U.S. – 36 percent
  • Italy – 31 percent
  • Japan – 28 percent
  • Germany – 25 percent
  • U.K. – 23 percent
  • France – 15 percent

Negative Affects on Employee Morale 

  • China – 37 percent
  • U.S. – 32 percent
  • Germany – 31 percent
  • Japan – 31 percent
  • India – 25 percent
  • Russia – 24 percent
  • Brazil – 23 percent
  • Italy – 23 percent
  • U.K. – 22 percent
  • France – 19 percent

Negative Impact on Client Relations

  • China – 32 percent
  • India – 25 percent
  • Russia – 22 percent
  • Brazil – 21 percent
  • Italy – 20 percent
  • U.S. – 18 percent
  • Germany – 17 percent
  • France – 17 percent
  • U.K. – 16 percent
  • Japan – 13 percent

Fewer Sales

  • China – 24 percent
  • India – 24 percent
  • Russia – 22 percent
  • Japan – 13 percent
  • U.K. – 12 percent
  • France – 11 percent
  • Brazil – 11 percent
  • U.S. – 10 percent
  • Germany – 9 percent
  • Italy – 9 percent

Cost to Recruit and Train Another Worker

  • Brazil – 35 percent
  • U.S. – 31 percent
  • India – 31 percent
  • China – 30 percent
  • Russia – 29 percent
  • Italy – 23 percent
  • U.K. – 22 percent
  • Germany – 15 percent
  • France – 12 percent
  • Japan – 11 percent
Mary Lorenz

About Mary Lorenz

Mary is a copywriter for CareerBuilder, specializing in B2B marketing and corporate recruiting best practices and social media. In addition to creating copy for corporate advertising and marketing campaigns, she researches and writes about employee attraction, engagement and retention. Whenever possible, she makes references to pop culture. Sometimes, those references are even relevant. A New Orleans native, Mary now lives in Chicago, right down the street from the best sushi place in the city. It's awesome.
1 comments
TC4Safety
TC4Safety

I would be curious to learn how many companies polled have had problems with workplace health and safety. We work with a great deal of clients that have seen improvements in their safety record through stronger hiring practices, but rarely have they realized the two factors were even connected!

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  2. [...] and lower the performance and morale of everyone on the team. According to a new survey by CareerBuilder, more than half of employers in each of the 10 largest world economies have felt the effects of a [...]

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  7. [...] Every manager and small business owner has faced the challenge of making a bad hire. From critical projects left uncompleted to employees unqualified for their positions, a bad hiring decision can cost businesses tens of thousands of dollars in productivity, lost opportunities, and management time. As a result, more businesses than ever are using research to better define what a strong employee looks like, and integrating it into the research process. Here’s a closer look at how market research can help you avoid critical hiring mistakes. [...]

  8. […] Přijetí zaměstnanců, kteří nejsou schopni zastávat pozici na kterou byli přijati má více dopadů na zaměstnavatele. Mezi nim jsou nižší produktivita, zhoršení vztahů se zákazníky, snížení morálky ostatních zaměstnanců, snížení prodejů, apod. Kompletní výsledky najdete zde. […]

  9. […] company has incurred unnecessary costs, loss of time and productivity. But do you know how much? A Career Builder survey of more than 6,000 hiring managers, worldwide, reveals some astounding […]

  10. […] also need to factor in unnecessary loss of time for recruiting, training and productivity. A Career Builder survey of more than 6,000 hiring managers, worldwide, reveals some eye-opening global stats about just how […]

  11. […] Lorenz, Mary. What’s the Cost of a Bad Hire? A Global Perspective. [Internet]. 2013 Mai 08 [acesso em 2013 Jun 4]; Disponível em: http://thehiringsite.careerbuilder.com/2013/05/08/whats-the-cost-of-a-bad-hire-a-global-perspective/ […]

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