HR Best Practices : What Is the Cost of a Bad Hire and How Can You Avoid It ?
A failed recruitment can cost between €30,000 and €60,000, or even more for a strategic position. Discover the hidden costs, their impact on your company, and how to avoid these mistakes through an optimized hiring process.
How to Define a Failed Recruitment ?
A recruitment is considered failed when the new hire leaves the company within 12 months. Its cost is estimated at between 15% and 25% of the employee’s annual gross salary, which represents a significant expense for the company.
Simulation of a Failed Recruitment :
Let’s take the example of an employee hired at €2,500 gross per month (€30,000 annually), whose trial period is terminated after 2 months. For recruitment and onboarding costs, we use an average rate of 20% of the annual gross salary.
- Gross salary for 2 months of trial period: €5,000.
- Adding employer contributions and various expenses (infrastructure, taxes, etc.), this amount is multiplied by 1.8, i.e. €9,000.
- Taking into account lost productivity, the cost can reach €13,500.
On top of that, you must add replacement costs to get the true financial impact.
Obviously, this figure should be refined by a management controller’s calculations, especially when evaluating the opportunity cost related to the unrealized added value
A Large-Scale Issue :
If a company hires 100 permanent employees (CDI) in a year, about 13% of those hires could fail, meaning 13 premature terminations. The Hiring Process Failure Rate (TEPE) represents an average overall cost between €50,000 and €100,000, when including indirect consequences such as reduced productivity and impact on team morale.
Key Figures :
- 13% of permanent contracts are not confirmed after the trial period (DARES, French Ministry of Labor, 2012).
- 36.1% of permanent contracts end before the 1st anniversary, and 45.6% among employees under 24 (DARES, 2015).
- 71% of HR Directors have already made a hiring mistake (Robert Half study).
- 1 out of 8 hires is perceived as a failure (Development Dimension International).
Risk Factors :
The cost of a recruitment varies depending on several elements:
- The level of responsibility of the position
- The nature of the tasks
- The time spent in the company
- The salary involved
How to Optimize Your Recruitment ?
Define your needs clearly
A successful recruitment starts with a precise job description and clearly defined skills. A vague definition attracts unsuitable profiles.
Attract the right candidates
With the talent shortage, it is crucial to promote your employer brand and communicate effectively about your opportunities.
Use relevant assessment tools
Don’t rely solely on the CV and interview. Skills tests, case studies, and soft skills assessments help secure your decision.
Take care of onboarding
A structured onboarding process maximizes engagement and reduces the risk of failure.
Leverage Our Expertise
At INAUTALENT, we help you recruit the right candidate from the start. Book a meeting with us to discuss your needs and challenges!
If you want to improve your recruitment strategy, don’t hesitate to subscribe to our newsletter The Recruitment Journal by Inautalent for more articles!
