Hiring the wrong person isn’t just an inconvenience. It can cost your business tens of thousands of pounds. From lost productivity to restarting the recruitment process, the true cost of a bad hire goes far beyond salary alone.
In today’s competitive UK job market, employers must understand these hidden costs and take steps to avoid them.
What Is a Bad Hire?
A bad hire is someone who underperforms, doesn’t align with the company culture, causes disruption to the team, or leaves within the first 12 months. Even when identified early, the financial and operational impact can be significant.
How Much Can a Bad Hire Cost?
It is widely reported that a bad hire can cost between 1.5 to 3 times the employee’s salary. Based on the UK average salary of £35,830 (ONS, 2025), this means a potential cost of £53,000 to £107,000.
Example: Mid-Level Employee on £40,000 Salary
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Recruitment costs: £6,000 to £19,000
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Salary and employer contributions during tenure: £12,000 to £15,000
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Training and onboarding: £3,000 to £5,000
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Lost productivity: £20,000 or more
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Termination and replacement: £5,000 to £10,000
Estimated total cost: over £60,000
Where the Costs Come From
Recruitment and Hiring
Posting on job boards, time spent by HR and line managers, and external recruitment agency fees all contribute. For senior positions, recruitment fees can exceed 20 to 30 percent of the starting salary.
Wages and Employer Contributions
While the employee is in role, you pay the full salary alongside National Insurance, pension contributions, and statutory benefits. These costs are unrecoverable if the hire is unsuccessful.
Training and Onboarding
UK businesses spend over £1,500 per employee on average for training. Additional onboarding costs include manager time, IT setup, equipment, and the reduced productivity that comes with ramping up in a new role.
Lost Productivity
Poor performance affects individual output and often impacts the wider team. Managers also spend additional time overseeing performance or managing the exit process.
Termination and Re-Hiring
Costs here include notice pay, potential legal fees, and internal resources managing the exit. Once the employee leaves, you must then reinvest in a replacement, often under time pressure.
Hidden Costs
In addition to the measurable financial impact, bad hires often cause:
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Lower morale across the team
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Increased staff turnover
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Damage to client relationships
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Reputational impact for the employer brand
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Lost time for senior leaders focused on remediation instead of growth
Prevention Is Better Than Cure
Research shows that nearly one-third of employers in the UK have made a bad hiring decision. The good news is that many of these mistakes are preventable with the right strategy in place.
Key improvements include:
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Structured screening and interview processes
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Emotional intelligence and behaviour-based assessments
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Greater focus on team fit and communication style
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Working with specialist recruiters who understand your industry
Our Solution
We support employers in making smarter, more informed hiring decisions.
Our structured video interview process allows for consistent, unbiased shortlisting. We enhance this with emotional intelligence assessments to help evaluate communication style, decision-making traits, and adaptability.
We also provide hiring managers with tailored interview questions and performance insights, supporting a more informed selection process. Our team-based assessments help ensure your new hire fits not only the role but the team around them.
Final Thoughts
The cost of a bad hire in the UK can range from 1.5 to 3 times the employee’s annual salary, or more. For a mid-level position, that could mean costs of over £60,000. When indirect impacts such as customer relationships, morale, and missed opportunities are factored in, the long-term damage can be significant.
A well-designed recruitment process backed by data-driven insights can help avoid these risks and improve employee retention and team performance.
If you would like support with improving your hiring strategy, assessing candidates, or benchmarking salaries, contact us today.
