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What Exactly Is The Cost of A Bad Hire And How Can It Affect Your Business?

                                                              COST OF A BAD HIRE

cost of a bad hire

Cost of a Bad Hire: A 2005 Leadership IQ survey of 20,000 new hires over a three-year period discovered that 46 percent of those hires failed within 18 months. Rather than figuring out why this may be the case, most companies have just assumed that nearly 1 out of 2 hires won’t work out. Moreover, they have done so rather than analyzing and refining the process itself.

A proper hiring process is crucial in this day and age to secure the best talent available on the market. Not having one will result in every company’s worst nightmare, BAD HIRES!

It’s worthy to note that the cost of a bad hire on average is 30% of their first-year salary.


What does this mean? 

  •   An entry-level employee earning $36,000 per annum would cost on average $10,800

cost of a bad hire

                                                               Cost of a Bad Hire



Not only that but it’s also worthy to note that the actual cost of getting a hire is:

  • On average, $4,129 for a new hire 
  • 30 days on average is the time it will take to fill the position the new hire is required for.

That’s a hefty cost to bear over a new hire who has most likely not produced any significant results compared to their cost. Now that we have all this information, how exactly can such monetary and time costs be reduced to the bare minimum? The apparent solution would of course be to improve the hiring process. Improving a company’s hiring process to the peak of effectiveness has many benefits including:


The final question remains how can one effectively increase the hiring process in the shortest amount of time possible? What is the solution?


Using a Learning Management System! (LMS)

An LMS would give you the capability to streamline your hiring process with ease, it allows you to not only schedule interviews with potential candidates but also to set up the interview process in such a way that you only hire the cream of the crop. An LMS will reduce the time and cost of screenings and interviews as most of the work is done on the platform itself, thereby maximizing efficiency.

It’s worth to note that;

  • 94% of recruiters and hiring professionals say their use of a recruitment software (LMS)  has positively impacted their hiring process.
  • 51% of recruiters now use interview scheduling software, with an additional 26% thinking about starting.

What does this mean?

Simply put, using an LMS to schedule interviews, accept applications and hire only the best candidates effectively is the future of hiring and recruiting the best talent. Any company that plans on only hiring the best of talents available should be using one, as we discussed earlier an effective hiring process is paramount to better recruiting and increased employee retention afterward.


What would be the best LMS to help your company Improve Hiring Rates? You might be wondering;

“Now that I know that I’m supposed to use an LMS for better hiring, which one should I choose? Which one is going to give the best value?”


If you’re in need of an LMS that’s capable of improving your hiring rates, making sure you only hire good candidates, and streamlining your hiring process, then look no further than CreateLMS. CreateLMS is the perfect solution your company needs to successfully make good hiresonboard them, and retain them effectively!

CreateLMS is capable of helping your company;

  • Hire faster with greater transparency and compliance
  • Hire based on a candidate’s scores and performance
  • Reduce hiring risk, effort, time, and cost
  • Stay assured with evidence that the best candidate was hired

benefits of createlms

All this and more is what we offer at CreateLMS. A platform that solves issues with hiring using an app-like experience that is semi-automated, consistent, and process-driven.  Our teams make sure you excel and have the platform to make it happen.

So get in touch and let’s show you this in action and within 90 minutes you will know how to fix your current hiring issues.



what is the cost of a bad hire