CareerBuilder survey: One bad hire costs business more than $50,000 on average

Chicago -- According to a survey released Monday by CareerBuilder and conducted by Harris Interactive, 80% of retail companies report that a bad hire has adversely affected their business in the last year, meaning that hiring the right employees will become a top priority in 2011.

Nearly one-quarter (23%) of the 254 U.S. retail hiring managers surveyed said that one bad hire cost their business more than $50,000 in the last year. One-third (33%) said that one bad hire cost them more than $25,000.

When asked how a poor hire affected their business in the last year,
retail employers reported the following: 45% said it resulted in less productivity; 38% reported lost time to recruit and train another worker; 34% said it had a negative effect on employee morale; 29% reported fewer sales; 19% said it had a negative effect on client relations; and 11% reported subsequent legal issues.

"Poor hires can have a significant effect on customer service, which can negatively impact sales," said Ben Jablow, managing director of WorkInRetail.com. "Bringing the right talent on board is essential to help maintain their bottom line, and keep customers satisfied. As a result, retailers are working to proactively prevent bad hires through target talent research and improved sourcing techniques."

Of retail employers who made a bad hire, 42% said they think they made a mistake hiring someone because they needed to fill the job quickly, followed by lack of understanding of where their target talent is (20%) and unsuccessful sourcing techniques (9%).

Nearly half (49%) said they have an average cost per hire of more than $1,000, up from 11% in 2008.