Glossary
A plain-language definition from the Curriculo hiring glossary.
The cost of a bad hire is the money and time you lose when a new hire doesn't work out and must be replaced.
Why it matters
A bad hire costs far more than their salary. You pay to recruit them, train them, and cover their mistakes. Then you pay to recruit again. On a small team, one wrong hire can slow a whole function for months and wear down the people around them.
Putting a rough number on it helps you decide how much care to put into screening and interviews.
A simple formula
Cost of a bad hire = recruiting + salary and benefits paid + onboarding and training + exit costs + rehiring + lost output.
A worked example
Here's a made-up case to show the math. A company hires a manager at $90,000 a year. They leave after six months.
- Recruiting cost: $8,000.
- Salary and benefits for six months: $54,000.
- Onboarding and training time: $6,000.
- Severance and exit admin: $5,000.
- Rehiring the role: $8,000.
- Lost output and team disruption, estimated: $20,000.
Total: about $101,000. Some of the salary bought useful work, so subtract a fair estimate of that. The rest is the real loss.
Common mistakes
- Counting only the recruiting fee and ignoring lost output.
- Waiting too long to act once the fit is clearly wrong.
- Blaming the person when the job was never defined clearly.
- Rushing a hire to fill a role, then paying for it twice.
How to lower the risk
Write down the outcomes the role must deliver in its first six months. Screen and interview against those outcomes. Use structured questions so every candidate gets the same test. Check references with specific questions about results.
Read the full guide to the cost of a bad hire, learn how to measure quality of hire, and see what goes into cost per hire.