A bad hire costs far more than most companies expect. In one CareerBuilder survey, employers reported losing an average of $14,900 on every bad hire, and for specialized or senior roles the real number is often much higher. That cost covers recruiting, training, and the salary you paid while the role wasn’t getting done. It doesn’t include the harder costs to measure, like a stalled project, a frustrated team, or a client who noticed.
Most hiring managers know a bad hire hurts. Fewer have looked at what it actually costs.
How much does a bad hire cost?
In a 2017 CareerBuilder survey of 2,257 hiring managers and HR professionals, 74% of employers said they had hired the wrong person for a role. Those companies lost an average of $14,900 on every bad hire. Employers said the biggest hits were lower productivity (37%), time lost recruiting and training a replacement (32%), and lower quality of work (31%).
Replacing that person keeps getting more expensive, too. SHRM’s 2025 benchmarking data puts the average cost per hire at $5,475 for nonexecutive roles and $35,879 for executive roles, and you pay it again every time you rehire.
Here’s what that can look like in real numbers. Say you hire a validation engineer at $100,000 and it doesn’t work out after six months. That’s about $50,000 in salary paid for work that never fully landed, before you count recruiting, onboarding, and the time your team spent picking up the slack. Then you start the search over, and the role sits open again while you do.
For specialized roles in pharma, biotech, engineering, and IT, the real number is often higher. These roles take longer to fill, longer to ramp up, and mistakes can carry compliance or project risk.
The hidden costs that don’t show up on paper
- Lost productivity. A new hire draws a full salary from day one, even while they’re still learning the job. When the hire isn’t a fit, that ramp-up period never ends.
- Manager time. Every hour spent retraining, correcting, documenting performance issues, and eventually managing an exit is an hour your managers aren’t spending on their own work.
- Team morale. Strong employees end up covering for the gap. Over time, that leads to burnout, frustration, and sometimes more people leaving.
- Client and project impact. In regulated environments like GMP manufacturing or pharmaceutical validation, a bad hire can mean delays, rework, or documentation gaps. Those costs go well beyond one person’s salary.
How to calculate the cost of a bad hire
You can estimate your own number with a simple formula:
Cost of a bad hire = Recruiting cost + Salary paid + Training cost + Lost productivity + Cost to rehire
- Recruiting cost: job postings, recruiter fees, and interview time.
- Salary paid: wages and benefits for the time the person was in the role.
- Training cost: onboarding time from managers and teammates, plus any formal training.
- Lost productivity: the work that didn’t get done, or had to be redone.
- Cost to rehire: running the full search a second time. SHRM puts the average at $5,475 for a nonexecutive hire.
Most companies are surprised by the total, because the salary is only one piece of it
Bad hire vs. employee turnover: what’s the difference?
Employee turnover covers everyone who leaves, for any reason. Some turnover is healthy, like a longtime employee retiring or moving up somewhere else.
A bad hire is a specific kind of turnover. It’s someone who was never the right fit for the role. It’s usually the most expensive kind, because you pay to hire, pay to train, get little in return, and then pay to hire again. Part of the problem is that most companies never measure it. In SHRM’s 2025 survey, only 20% of organizations said they track quality of hire.
Why bad hires happen
- Rushed timelines. When a seat has been empty too long, it’s tempting to hire the first person who looks close enough. In the same CareerBuilder survey, 30% of employers who made a bad hire said they felt pressured to fill the role quickly.
- Vague job descriptions. If the role isn’t clearly defined, it’s hard to screen for the right person.
- Hiring for the resume, not the role. Strong credentials don’t always mean a strong fit for your team, your pace, or your environment.
- A limited candidate pool. For specialized roles, the right candidate often isn’t actively applying. They’re working somewhere else.
How to reduce the risk of a bad hire
- Tighten the job description. Be specific about the skills, experience, and work environment the role needs.
- Use structured interviews. Ask every candidate the same core questions so you can compare them fairly.
- Try before you commit. A temp to hire arrangement (link to the temp to hire post) lets you see how someone works on your team before making a full-time offer.
- Work with a specialized recruiter. A recruiter who knows your industry can screen for technical skills and fit, and can reach candidates who aren’t on job boards.
Frequently asked questions
The cost is often felt more at a small business, because one person makes up a bigger share of the team.
The formula above is the best way to estimate your own number, since the impact depends on the role
and how long the person was in it.
Rushing the process. When a role needs to be filled fast, steps like reference checks and skills assessments tend to get skipped.
It depends on the role, but plan for the full time it takes to recruit, hire, and ramp up a replacement. For specialized roles, that can be several months.
Hiring for a role you can’t afford to get wrong?
Clark Davis Associates has helped New Jersey companies find the right people for specialized departments in Accounting & Finance, Engineering, Human Resources, Information Technology, and Pharmaceutical & Biotech. Talk to our team about your next hire.
Sources
- CareerBuilder, “Nearly Three in Four Employers Affected by a Bad Hire, According to a Recent CareerBuilder Survey,” PR Newswire, December 7, 2017:
https://www.prnewswire.com/newsreleases/nearly-three-in-four-employers-affected-by-a-bad-hire-according-to-a-recentcareerbuilder-survey-300567056.html - SHRM, “SHRM Releases 2025 Benchmarking Reports: How Does Your Organization Compare?,” October 15, 2025:
https://www.shrm.org/about/press-room/shrm-releases-2025-benchmarking-reports–how-does-your-organizat