Making a Bad Hire: The Costs and The Solution

Every bad hire starts with the perfect interview.

Once hired, the consequent fragmentation and financial repercussions from the wrong person in the wrong place threatens to make any recruitment process a risk to efficiency. 

In this article, we examine the financial and cultural impact a bad hire has on a company and highlight exactly how our Solutions prime organizations for consistent hiring success. 


At the center of every hiring strategy lies an unnerving possibility, that the perfect candidate might possibly be a mis-hire.

Pre-COVID research by Leadership IQ in 2011 indicated that 46% of new hires fail within 18 months. Later research in 2017 by CareerBuilder discerned 74% of employers to have failed hires within their organizations – that’s two-thirds of employers.

The impact of a bad hire extends beyond the significant financial repercussions all the way through to the wellbeing of both the mis-hired employee and the extended team, with the lack of fit contributing to increased stress levels and poor work/life balance across the board.

In an increasingly remote working world where work and home occupy a blurred boundary, mitigating risks and minimizing damage to company culture is integral to thrive and flourish in what can be an isolating time for many.

In this article, we’ll examine both the cumulative impact of a mis-hire on company culture and financial profit, as well as provide innovative solutions to inhibit mis-hires from ever occurring.

The Financial Impact 

The true cost of a bad hire depends on your specific industry, the level and responsibilities of the role, as well as the extent of residual effects on company performance.

CareerBuilder estimate an average cost of $14,900 for every mis-hire, although calculations are extraordinarily varied across studies and can range up to hundreds of thousands.

Residual factors contributing to the variability of cost largely stem from the impact of poor decision making. A poor decision made by a mis-hire can lead to a loss of clients, a damaged reputation, and a loss of time moderating and supervising the employee. Furthermore, should a mis-hired employee pursue legal action, the overall costs can rapidly escalate and lead to further organizational compromise.

The Cultural Impact

A mis-hired employee’s impact on company culture stems from an attitudinal misfit. Research from Leadership IQ indicates that 89% of hiring failures are driven, from an employer’s perspective by poor emotional intelligence, motivation and temperament. These characteristics can feed into what CareerBuilder dubs a “ripple effect”, where disengagement spreads through the organization and standards for work quality are lowered.

From a mis-hired employee’s perspective, 46% wanted to leave due to a toxic work culture, 40% due to disagreements with management style, 37% due to the job not matching the interview and listing description, and 33% due to a lack of clear expectations for the role.

A fundamental communication gap bridges both an employer’s view of the employee lacking soft skills, and the employee’s view of inappropriate work culture and organizational structure.

Overcoming this rift, according to research by Leadership HQ, means ensuring that there is a strong cultural fit and attitudinal alignment. Emphasizing interpersonal and motivational issues early in the hiring process boosts the likelihood of hiring success and a positive workplace culture.

Forging a Solution

A company’s culture should set a productive standard of attitudes and beliefs that best reflect the organization. Hiring candidates that fit a specific set of attitudes and beliefs that are most conducive to success in the company’s industry means developing a workforce that is appropriate, focused and empowered.

The concept of company culture, whilst fundamentally appealing, was found to be minimally integrated by Leadership IQ, who found that merely 15% of HR Executives noted their company to thoroughly define the attitudes that distinguish their highest performers from other employees.

Failing to identify factors that fundamentally indicate better performance blurs company culture and makes projecting what to look for in candidates difficult.

A Better Way

At 10x, we believe in a better way to empower your people.

Data is central to our initiative at 10x Psychology, from our industry-leading psychometric assessments, to our machine-learning algorithms that interpret and present our data. We are dedicated to empowering businesses with the ability to distinguish exactly what they need more of, and where to find it.

10x Hire

10x Hire streamlines the entire hiring process to amplify your talent management strategy. Results from our accessible psychometrics are automatically channelled in real-time into the dashboard, from where you can access a ranked list of candidates that suit not only the technical skills you’re looking for, but your company culture too.

10x Talent

For those in the recruitment industry, 10x Talent provides a unique Solution to the challenges surrounding candidate experience and talent management. Collaborate with your clients and deliver authentic top talent by matching candidates against key competencies in real-time. Use our tailored interview guides and prompts to deliver an unbiased and consistent hiring experience across your teams quickly and effectively.

10x Optimize

10x Optimize provides an innovative alternative to personal interpretation by assessing your entire cohort on their motivations, personalities, and abilities. Our algorithms scour through every assessment result to present a clear, engaging display of what your company culture embodies, and what you might need to look for in future candidates.

10x Predict

10x Predict takes this a step further by understanding what drives performance in your organization, and, using big data techniques compares this to each individual candidate’s data to provide an employee trajectory of performance and development, allowing you to predict what to expect from a candidate over time, before you even interview them.

Using your current organizational structure to inform future hiring decisions means your company transitions as a whole and avoids fragmentation – promoting sustained and streamlined development where expectations are clear, and motivations aligned.

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