The True Cost Of A Bad Hire, And How To Avoid It

Choosing the right candidate for a job is no easy task. There are many factors to take into consideration, such as logistical costs, time and company values. Here at European Recruitment, we aim to help guide you through the process to avoid these common issues. It's tough to give the exact cost of hiring the wrong candidate for the role, but, whatever the figure, any unnecessary spending can be detrimental to a company. For some companies, this issue may not be high on the agenda, but according to Kevin Green – former chief executive of REC – businesses in the UK alone are losing billions every year as a result of hiring the wrong person.

The cost of hiring the wrong person

Logistical costs

In purely logistical terms, i.e. the spend required to take on a fresh employee, the cost of hiring the wrong candidate is considerable. A study has estimated that replacing an information technology sector employee costs on average £6,455, though some sources put it higher. Additional logistical costs could involve agency fees, which may constitute 20-30% of the annual salary of the employee. It is, therefore, important to make sure you’re taking all of the necessary steps required to help you find the most suitable candidate the first time around, to avoid this problem and to help mitigate against rising costs.

Hidden logistical costs include the wages of those involved in the selection and hiring process. Interviews conducted by management-level staff, whose time is more expensive, as well as HR involvement in processing a fresh recruit, can also add up quickly. In addition, individuals required to train the new employee requires more time and money. Hiring the right candidate will avoid a repeat of such costs.

Here at European Recruitment, our experienced team are able to use their specialist industry knowledge and expertise to help you save on these avoidable costs, by providing high-quality candidates the first time around.

Staff performance

Clearly, logistical costs can mount up, but one of the biggest dents in your finances may be caused by reduced staff performance. It would be great if we were all safe in the knowledge that after an employee has given their notice they will continue to function at full capacity, but often that isn't the reality. Added to the time it takes to bring a new employee up to speed, this could result in a significant dip in company efficiency during both onboarding and leaving processes, resulting in further mounting costs.

A study has revealed that it can take almost a year for a new staff member to fully learn the ropes. Anything less than Optimum Performance Level (OPL) will be financially damaging simply because the ability of these employees to generate company revenue may be significantly compromised, despite still receiving their full salary. On the flip side, more experienced employees moving to a different role in the same sector, generally take less time to reach optimum performance. Our team is here to help minimise such issues by providing experienced candidates who can transition seamlessly into their roles, ensuring that time is not wasted hiring the wrong person.

Company morale

As well as financial losses, not hiring the right candidate can have a detrimental effect on company morale. The replacement of an established employee can create a negative atmosphere among other staff. Even long-standing and key employees can be affected, which may undermine efficiency.

Reduced efficiency can have a knock-on effect on a company's reputation and that, too, can have financial consequences. It is crucial, therefore, that your team members feel that they are part of a cohesive force, each playing an essential role in contributing to the business. When selecting candidates, our experienced recruiters will consider factors such as company ethics and values to ensure that candidates fit seamlessly within existing workplace cultures.

Avoiding the cost of a bad hire

A recent study suggested that the most common obstacles to hiring the right candidate were a lack of the required skills (44%), under qualification (42%) and misleading CVs (37%). By working with a specialist recruitment agency like ourselves, businesses can minimise the risks of hiring the wrong person. This is thanks to our extensive experience in hiring suitable candidates within the technology sector, helping us to present you with only the most suitable candidates for your role.


If you're using a recruitment agency, take the time to find the right one. Inevitably some are better than others, and a little research goes a long way. If your business is within a specific field, make sure the agency has experience in that sector. Here at European Recruitment, for example, we specialise in technology, and our clients are confident that our experienced team has the knowledge needed to find the right candidates for their vacancies, helping to keep the cost of hiring the wrong employee to a minimum.


Knowing as much as possible about a potential candidate before they even set foot in the workplace is key. Although often underused, assessments are one of the most effective ways to achieve that. An IKM web-based assessment will provide a comprehensive knowledge and skill profile, while other tests will give an insight into a candidate's personality and behaviour. The more informed you are, the less likely you are to make a costly mistake. When you choose to work with European Recruitment, our team will communicate with you throughout the whole process to ensure that you can make informed decisions.


Who better to provide information on a prospective candidate than someone who has previously managed them in a working environment? References are a precious resource for employers. Taking the trouble to request them - and more importantly, follow them up - can significantly increase your chances of hiring the right candidate.

European Recruitment can take references on your behalf as part of a recruitment process tailored to your needs, helping to make hiring the wrong person for the job is a thing of the past.

Are you looking to hire the right candidates for your roles within the technology sector? Do you want to discuss the true cost of a bad hire in more detail? Get in touch with a member of our team today to find out how we can help.

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