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True Cost of Hiring the Wrong Person

True Cost of Hiring the Wrong Person

As I continue to evolve as a business owner, I have said on multiple occasions I wish I was a profiler for the FBI. If you don’t know what a profiler does, they are really good at reading all the little cues someone gives during interactions. All the signs, eye blinking, story telling that someone gives are tell-tale signs. The profiler is really good at assessing their psychological, mental and emotional states of the person sitting in front of them. 

 Wouldn’t that be an amazing skill to have when your hiring someone?

Wouldn’t it be helpful to interact with a potential new hire and know they are lying?

According to almost 60% of applicants are caught lying on their resumes! Think about it, those are just the ones who are caught doing it.

I know I sound like I have lost total faith in the current work force.  That's not true, but if you have been in business long enough you know the detrimental effects a bad hire can have from diminishing team morale, poor performance, loss of revenue and sometimes the biggest thing of all, your sanity.

Here is a great example of time wasted. We had probably the worst hire ever last November and she worked for us for maybe a month.  I’m writing this in June, and she is still fighting the appeal process for unemployment.  I’m not kidding when I say if she worked that hard at her job as she did with unemployment, she would still be employed.  As a business owner, you know all of this.  From altering time clocks, love affairs gone bad, secret families, poor work ethics, etc lets dive into why we need to become our own personal profiler for the sake of our businesses, bottom lines and our mental well-being.


First let’s start at the beginning, do you know why most businesses hire the wrong person? I’ve learned this the hard way too…desperation.

All of a sudden you find yourself short staffed and you need someone ASAP.  It’s like getting out a relationship and you are desperate for another one. You might find yourself lowering your standards to try and fit the next person who comes along into the role.  In my experience, hiring out of severe need or desperation always comes back to haunt me.  Remember the unemployment example? Yep…6 months of my life spent cleaning up one bad decision. Even if it takes a few weeks longer, holding out for the right candidate can and will in the long run make your life easier.

 Financial Ramifications

It depends on the position and how much they are getting paid.  The stats are showing it can cost upwards of 30% of that employee’s first year earnings.  Think about what goes into a new hire.  There are interview costs, training costs, unemployment and if they get feisty than you might be looking at a lawsuit.  For a small business, if the position is a managerial one, a bad hire can be a true threat to the health and longevity of the business.


A great example (or a poor one I learned) is a bad manager will definitely ruin the ability for the business to make money and generally leads to lower customer satisfaction. When customers aren’t satisfied they spend less money with you and don’t refer new business.

Team Morale

There isn’t anything like having an employee that everyone can’t stand working with.  The rest of the team doesn’t want to come to work and then usually don’t perform as well.  If it’s a manger that the rest of the employees don’t like or are afraid of it’s no fun for anyone to walk on egg shells.  As the business owner if you interact with your employees I believe you should generally like them (most of the time). 

 Bounce Back

I have found that sometimes the come back after a bad, key employee has been terminated can take months to recover. You have mitigate the damage done work by that employee.  Improving team morale and it takes time to recoup money lost or wasted.


Before all the business owners of the world decide to pull a John Gault move from Atlas Shrugged let me leave you with one final thought.  This is a quote from one of my favorite guys in business…

 If you wake up three days in a row thinking about an employee and you are not having s*x with them, you need to fire them.” -Dan Kennedy

Kassandra Schultz D.C