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Info & Articles - ScorecardHR
27 Jan

The Real Cost of Hiring the Wrong Employee

A great walk through of a real situation mixed with some great info in this article here. This article says a bad hire can cost up to $336,000 Annually or  $28,000 a month!

Real Cost of a Bad Hire

According to a blog post by a well-known recruiter named Jorgen Sundberg, the real cost of onboarding is $240,000 per employee. That’s some serious sticker shock. Sundberg now runs Link Humans, a content marketing company.

He notes that the total cost of recruiting the wrong employee includes hiring, total compensation, eventual severance pay, and other factors like legal fees and totals more like $840,000 when you factor in all of these costs. (This is based on hiring a mid-level manager who works 2.5 years and is then terminated and replaced.)

01 Jan

How much does a bad employee cost the boss?

This is another great article here. Below are some of the points I have taken from this article.

Hiring mistakes happen — but why?

When asked to give a reason for the bad hires, 34 percent of employers said sometimes things just don’t work out. However, a rushed decision topped the list of reasons companies gave for making a bad hire.

  • Thirty-eight percent of employers said they needed to fill the job quickly.
  • Twenty-one percent say not knowing enough about job candidates contributed to bad hiring decisions.
  • Eleven percent didn’t perform reference checks.

The price of a bad hire: It’s more than just money

The price of a bad hire adds up in a variety of direct and indirect ways. For example, 9 percent of companies said bad hires resulted in legal issues and 11 percent said they resulted in fewer sales. The most common effects of a bad hire are:

  • Lost worker productivity: 41 percent
  • Lost time to recruit and train another worker: 40 percent
  • Costs associated with recruiting and training another worker: 37 percent
  • Damage to employee morale: 36 percent
  • Damage to client relationships: 22 percent
06 Nov

Why bad employees don’t get fired by CNN.com

Good information from this article here. Below are the bullet points:

  1. The employee has a relationship with someone higher up.
  2. The boss relies on the employee.
  3. The employee brings more value to the company than he or she costs.
  4. The boss thinks it could be worse.
  5. The boss is afraid of the employee.
  6. The boss feels sorry for the employee.
  7. The boss doesn’t want to go through the hiring process.
  8. The employee knows something.
  9. The employee has everybody fooled.
  10. He or she is not really a bad employee.


09 Aug

Why You Can’t Afford to Hire the Wrong Employee

Another great article here.

Direct costs include:

  • Separation costs — exit interviews, severance pay, higher unemployment taxes
  • Temporary staffing — overtime pay for other employees to perform the former employee’s duties, or the cost of hiring someone from a temporary staffing agency
  • Replacement spending — advertising, agency and search fees, drug testing and background checks, employment testing, travel and relocation costs
  • Training — orientation, certifications, on-the-job training, uniforms

Indirect costs include:

  • Lost productivity — the departing employee spends his or her last days performing poorly or completing exit interviews, etc.
  • Reduced work quality — the new employee must learn the job
  • Lost clients — a result of customer service gaps
  • Reduced morale — the change’s impact on remaining employees
  • Loss of institutional knowledge