Talent Talk: The Cost of a Bad Hiring Decision for Your Company, and You Personally

What is the actual cost of hiring the wrong person for a leadership role in your company? In precise numbers, the truth is no one can really say, although you can find some crazy estimates.

A widely cited Department of Labor study says it's 30% of the employee’s first-year earnings. Dr. Bradford Smart, author of Topgrading, estimated the cost of a bad hire at anywhere from five to 27 times their salary.

So, can we agree that the financial impact of a mis-hire could be significant? But if you are leading an entire organization, or a division, or even a small team, what is the cost to your life and your career?

Your success depends on others

A leader’s success is largely driven by his or her ability to field a team of top performers. If you can recruit a top performer within your industry, within your niche, and preferably from the competition, that one single person can add hundreds of thousands, perhaps millions, of dollars to your bottom line, and propel your career at the same time.

A profitable recruitment strategy

The star performers, the top 10%, the A-players — whatever you want to call them — are the only ones making your company money. A recent McKinsey study found that high performers are 400% more productive than others. They are also the ones who will help you get promoted, as they can step in and fill your shoes when the time comes for you to move up. They also reduce your personal stress and can help you maintain some work-life balance.

There are steps you can take to identify, attract, hire, and retain the people you want, and we will explore all those actions in the weeks ahead.