We used an example of a £100k per annum executive to answer one question: “What’s the true cost of a bad executive hire?” We factored in salary, benefits, the cost of the recruitment and sourcing process, and the knock on effects of having a poor performing individual in a role for up to a year. Using data from a range of external sources and our own databases we arrived at a final figure showing this cost to be around three and a half times more than a year’s salary. To demonstrate the scale of this cost we laid it all out in a infographic as well as breaking down how that cost was arrived at.

1. In 2013
It’s a problem that costs UK businesses
OVER £4.13 BILLION
PER YEAR
£50 NOTE
DIMENSIONS
THE TRUE COST
OF A BAD HIRE
THE TRUE COST
OF A BAD HIRE
SO WHAT’S THE TRUE COST OF A BAD HIRE FOR A
£100K PER ANNUM EXEC…
£4.13
BILLION
933.38m
TO PUT THAT INTO CONTEXT:
BURJ
KHALIFA
830m
THE
GHERKIN
180m
THE
SHARD
308m
BIG
BEN
96m
156 mm
85mm
0.113 mm
62%
of UK employers
reported a bad hire.
"As a business owner or manager, you know
that hiring the wrong person is the most
costly mistake you can make."
Brian Tracy
Entrepreneur and Author
THE UK 1 YEARBAD HIRES
+ +
£30,000
Cost of new
recruitment
search
£100,000
Up to a years
salary
£7,500
Car Allowance
£5,000
Pension
£15,000
Company bonus
£9,000
Wasted investment
in that person...
• Induction:
£4,000
• Computer and phone:
£1,000
• Conferences and training days:
£4,000
£100,000
Decrease in sales
£18,000
Negative impact
on client relations
£37,000
Fall in team
morale
KNOCKONEFFECTSBENEFITSSALARYSOURCING
£1,500
Health Cover
= £355,100
£30,000
Cost of original
recruitment
search
£2,100
Time wasted
interviewing
WWW.EXECUTIVESONLINE.CO.UK
01962 893 300
HELLO@EXECUTIVESONLINE.CO.UK
LINKEDIN.COM/COMPANY/EXECUTIVES-ONLINE
TWITTER.COM/EORECRUITMENT
RESOURCES:
https://www.linkedin.com/pulse/article/20130816200159-131079-employee-retention-now-a-big-issue-why-the-tide-has-turned
http://www.americanprogress.org/issues/labor/report/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/
http://www.signium.com/Portals/31/Ireland/Documents/ARE%20YOU%20GAINING%20BY%20RETAINING.pdf
http://www.hrgrapevine.com/markets/hr/article/2014-02-24-high-staff-turnover-costing-business-4billion#.VD5Gx-fDlu
http://realbusiness.co.uk/article/19693-what-is-the-cost-of-a-bad-hire
http://theundercoverrecruiter.com/hiring-revolution-infographic/
https://www.linkedin.com/pulse/article/20130716151946-2967511-the-high-costs-of-a-bad-hire-and-how-to-avoid-them
http://www.moneysavingexpert.com/insurance/cheap-health-insurance
http://www.payscale.com/research/UK/Job=Human_Resources_(HR)_Manager/Salary
http://www.payscale.com/research/UK/Job=Sales_Director/Salary
http://www.payscale.com/research/UK/Job=Chief_Executive_Officer_(CEO)/Salary
WANT TO LEARN MORE?
Check out our ‘Talent Gamble’ Slideshare
to find out more at:
http://bit.ly/talent-gamble
OR
WHAT MAKES MORE SENSE?
A bad exec hire can cost you 3.5 : 1 while a successful exec hire
can make you 50 : 1 (a net effect of 53.5).
A focus on cost rather than ROI leads to costly bad hires.
+50-3.5
1 BAD HIRE CAN COST 1 GREAT HIRE CAN MAKE
TheTalentGamble