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The true cost of a bad hire:
Mistakes up to $150k& 54% morale lost
Bad hiring decisions aren’t just costly — they’re avoidable. For our latest report, we surveyed over a hundred talent professionals in the United States to uncover the staggering costs (direct and hidden) of mis-hires to equip you with better strategies to fix your hiring process for good.
Uncover the true cost of hiring mistakes
With hiring pressures mounting and traditional methods struggling to keep up, too many businesses are stuck in a costly cycle of mis-hires. This report offers the insights you need to break free. Download for:
The breakdown of direct and hidden costs caused by bad hires
Insights from HR leaders on shifting toward a skills-first hiring process
Strategies to protect your team from productivity loss, morale declines, and retention struggles
“Companies struggle to hire great candidates due to rushed processes, misalignment of role expectations, and ineffective screening tools,” says Nicole Griffin, Talent Acquisition Leader at Korn Ferry. “When hiring managers and recruiters aren’t aligned, or when roles evolve faster than hiring strategies, decisions are often made based on urgency rather than fit.”
Rushed decisions like these make a big dent in companies’ coffers. “An average of 23% of companies report up to five bad hires a year. That’s potential losses reaching close to millions of dollars,” adds Benjamin Buckingham, Managing Director at Lumenii.
Bad hires are an expensive habit
From sourcing and onboarding to lost productivity and team turnover, the real cost of a mis-hire is often more than 10x the initial expense.
Time lost, opportunities missed
Hiring a replacement isn’t quick or easy. Most HR teams need 2–3 months to replace a bad hire, slowing down operations and overloading your existing team.
A-players quit when morale drops
When a bad hire joins your team, it doesn't only affect output. Retention challenges skyrocket, and morale plummets, sowing seeds for further turnover.
Don’t wait for your hiring mistakes to snowball
Arm yourself with the knowledge and tools needed to make smarter, faster, and better hiring decisions.
Direct costs are just the tip of the iceberg
In dollar terms, 48% of businesses spend between $5k-$10k in direct costs, which include hiring manager salaries to screen candidates again, time spent on interviews, job ad costs, and other miscellaneous expenses. Another 29% spend between $10k-$20k.
Those numbers might look fine on the surface. But just like an iceberg, most of the damage lurks beneath the waterline. The real cost of a bad hire isn’t what you spend on recruitment — it’s the unseen toll on productivity, team morale, and lost business opportunities.
🚨 A bad hire can cost companies an additional $30k-$150k+ in indirect costs
Direct costs of a bad hire
(TA salaries, job ads, candidate screening, etc.)
Indirect costs of a bad hire
Training costs, reduced productivity, delayed projects, etc. all add up. Scroll down to see how much.
Hiring mistakes happen because teams move in the dark
HR lacks effective methods for candidate assessments, with 50% lacking confidence their hiring process identifies the best candidates. Why are they perpetually riding the struggle bus?
Find it difficult to verify resume claims, assess soft skills, and determine cultural fit
Lack a standardized method for verifying candidates’ competency levels
Have limited time and resources to properly evaluate each candidate
Skills assessments are a data-backed solution
The report also introduces a skills-first hiring approach that takes the guesswork out of matching talent to roles. That’s because our data shows that:
Companies using skills-focused hiring reduce their time-to-hire by up to 86%
93% predictive confidence in skills-based assessments can help you avoid costly decisions
“The only way to avoid the bad hiring cycle is to move to a new approach to hiring. In my experience, it’s about changing from resume-first hiring to science-based selections. Use structured assessments and competency-based evaluations to measure more than just role fit. We also look at learning agility — their ability to learn and grow. For us, this has almost completely mitigated hiring mistakes and led to reliably onboarding the correct candidates.”
How to fix your hiring process for good
Hiring should be driven by data, not gut instinct. Recruitment experts weighed in on the results of our survey to offer tips for improving your hiring process to reduce the risk of costly hiring mistakes.
“Train hiring managers — not just on interviewing but also on defining job needs clearly and recognizing cognitive biases that lead to poor hiring decisions like the halo effect or similarity bias When hiring managers learn to make more objective decisions, the risk of a bad hire drops significantly.”
“Define clear candidate criteria: Know exactly what skills, experience, and traits success in the role requires. This creates a shared target for everyone on the hiring team.”
“Onboarding is equally important. Even great hires fail in bad systems. A structured 30-60-90 day onboarding plan makes sure employees get ramped up quickly. Assigning a mentor from day one. New hires should have a go-to person for guidance). Host daily reflection surveys to track learning progress and engagement. Offer cross-training employees outside their role, so they grow into leaders instead of staying stuck in a single skill set.”
Protect your business from the costly ripple effects of bad hires
Get the report now (no email required) and discover actionable solutions to
make smarter hiring decisions.
Methodology
This research was conducted online in the US by a B2B audience research company on behalf of Toggl, between February 24th and February 27th, 2025. Participants included 122 full-time employees identifying as working in Human Resources roles.