Hiring the wrong person can have serious implications for companies. More than one-half of employers in each of the 10 largest world economies said that a bad hire (someone who turned out not to be a good fit for the job or did not perform it well) has negatively impacted their business, pointing to a significant loss in revenue or productivity or challenges with employee morale and client relations, according to a survey by CareerBuilder.
Among those reporting having had a bad hire, 27 per cent of United States employers reported a single bad hire cost more than $50,000. In the eurozone, bad hires were most expensive in Germany, with 29 per cent reporting costs of 50,000 euros ($65,231) or more. In the United Kingdom, 27 per cent of companies say bad hire costs more than 50,000 British pounds ($77,192). Three in 10 Indian employers (29 per cent) reported the average bad hire cost more than 2 million Indian rupees ($37,150), and nearly one-half (48 per cent) of surveyed employers in China reported costs exceeding 300,000 CNY ($48,734), found the poll of 6,000 hiring managers across the globe.
The BRIC countries (Brazil, Russia, India and China) — markets that house the largest number of employers planning to increase the hiring of full-time employees this year — were the most likely to report being affected by a bad hire in the last year. However, the majority of employers in all top 10 markets reported similar experiences.
• Russia (88 per cent)
• Brazil (87 per cent)
• China (87 percent)
• India (84 per cent)
• United States (66 per cent)
• Italy (66 per cent)
• United Kingdom (62 per cent)
• Japan (59 per cent)
• Germany (58 per cent)
• France (53 per cent).
“Making a wrong decision regarding a hire can have several adverse consequences across an organization,” said Matt Ferguson, CEO of CareerBuilder. “When you add up missed sales opportunities, strained client and employee relations, potential legal issues and resources to hire and train candidates, the cost can be considerable. Employers are taking longer to extend offers post-recession as they assess whether a candidate really is the best fit for the job and their company culture.”
When it comes to negative impacts, 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.
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