Bad Hire Calculator


What may seem like minor costs when making a bad hire after the recruitment process can potentially be extremely harmful to a company. Lost productivity costs and hiring costs are two expenses that occur when making a bad hire. There is now a tool that can tell you just how much your company is spending on these bad hires.

  • Many organizations don't know the true cost of making a wrong hiring decision, according to Thrivemap. Thrivemap developed a calculator that takes an organization's current headcount, annual headcount growth percentage and staff turnover rate and estimates that cost. The final cost estimate accounts for lost productivity costs, as well as hiring costs like advertising and agency fees, Thrivemap said in a press release emailed to HR Dive.
  • As an example, the company calculated the bad hire costs for a company in the hospitality industry with 500 employees, an annual 5% increase in headcount and a 15% turnover rate. The costs added up to £406,038, or more than $500,000.
  • Lost productivity is a cost that businesses experience often but shouldn't ignore, according to Thirvemap. The company said that research it conducted earlier this year found that workers who felt they fit their role and their employer's culture gave their productivity a 7.2 rating out of 10, compared to the 5.3 rating that those who felt they were a bad fit on both counts gave their productivity.

A 2018 report said that turnover is at an all-time high, which puts more pressure on talent pros and hiring managers to avoid hiring mistakes. With turnover and the cost of attrition top of mind for employers, it might be prudent for talent pros to also consider the productivity costs that result from bad hires, too. One example from Thrivemap indicated that the difference in productivity between a good-fit employee and a bad hire can be as high as 36%.

Thrivemap points out that when HR can account for and calculate costs associated with its functions, in this case hiring, it comes closer to its proverbial seat at the table. HR must be able to understand financials, establish its own key performance indicators and show the top brass that it can hit those benchmarks for success, experts have told HR Dive. To stand a better chance of avoiding bad hires altogether, experts have said that talent pros can:

  • Have a robust interview process with multiple people, diving deep into experience that is critical to the role;
  • Use assessments related to the job;
  • Thoroughly go through the reference process;
  • Articulate the company culture.

In addition, any tools that can predict what bad hires are currently costing could help HR departments and talent professional make a case for adopting better sourcing and screening tools within their organizations. Investing in tools that can better identify hires with the right skills and who are the right culture fit might keep bad hire costs from becoming a chronic drain.


SOURCE- Bolden-Barrett, Valerie. (25 July 2019). “Bad hire calculator aims to estimate the cost of failed recruits” (Web Blog Post). Retrieved from

Healthcare Reform Curbs Full-Time Hiring

Originally posted December 12, 2013 by Jon Jimison on

Almost half of U.S. companies are wary of taking on full-time employees as a result of the Affordable Care Act.

And 20 percent are likely to hire fewer employees while 10 percent may actually lay off employees in response to what's been dubbed "Obamacare."

That's according to the findings from Duke University/CFO Magazine's Global Business Outlook Survey, which was concluded Dec. 5.

The survey found American chief financial officials indicated that because of the Affordable Care Act, they may reduce employment growth or even shift toward part-time employees. In fact, more than 40 percent of companies will consider targeting part-time workers for future employment, the survey found.

"These are some negative, perhaps, unintended consequences of the Affordable Care Act that companies are wrestling with right now that might dampen the hiring horizon a bit," said John Graham, Duke Fuqua School of Business finance professor and a director of the survey.

There was, however, a silver lining in the survey. It found that underlying economic conditions are expected to improve next year. Fifty-two percent of U.S. business leaders believe economic conditions for their firms will be better in 2014.

There will still be some expected employment growth, but health care reform has reduced that growth from what it could have been, Graham reported.

Capital spending among businesses might fare better, increasing up to 7 percent next year.

President Barack Obama's signature 2010 health care law requires many companies to provide insurance to all full-time workers, which the law defines as those who work 30 or more hours per week. Some businesses reportedly have given part-time schedules to their former full-time staffers to skirt insurance requirements.

Larger companies that employ 50 or more people are required to provide health insurance under the law. Smaller companies can opt out.

"The inadequacies of the ACA website have grabbed a lot of attention, even though many of those issues have been or can be fixed," Graham said. "Our survey points to a more detrimental and potentially long-lasting problem. An unintended consequence of the Affordable Care Act will be a reduction in full-time employment growth in the United States. Companies plan to increase full-time employment by 1.4 percent in 2014, a rate of growth which is down from last quarter and unlikely to put a dent in the unemployment rate. CFOs indicate that full-time employment growth would be stronger in the absence of the ACA."

"I doubt the advocates of this legislation would have foretold the negative impact on employment," said Campbell Harvey, finance professor at Fuqua and a director of the survey. "The impact on the real economy is startling. Nearly one-third of firms may either terminate employees or hire fewer people in the future as a direct result of ACA."

Health care in a top local concern as well, officials have said.

Changes to health insurance requirements top the list of concerns for local businesses, Christy Proctor, Wilson Chamber of Commerce chairwoman-elect, previously said.

Most Americans will be required to have health insurance in 2014 under the Affordable Care Act. The law requires coverage and includes fines for not getting insurance. There are subsidies for people who fall below certain income levels. Under the law, residents can't be refused coverage for a pre-existing condition.

The issue has become a heated political debate.

Republicans are quick to point out problems with the government-run website. They also point out Department of Health and Human Services enrollment data showing that fewer than 9,000 North Carolinians enrolled from Oct. 1 to Nov. 30.

Democratic Sen. Kay R. Hagan said she and others called for an investigation into the contracting process related to"> HHS Secretary Kathleen Sebelius on Wednesdsay announced that the inspector general of the agency will conduct such an investigation.

"I am pleased that the administration has agreed to investigate the contracting process related to as I urged them to do last month," Hagan said in a statement. "There is no excuse for not having the website ready from day one, and we must learn whatever lessons we can to ensure we never again have an issue like the initial failures of"> I will continue to monitor the progress of this investigation to ensure it is completed in a timely and transparent manner."



How to Set Up New Employees for Success

By Linda Doell

Source: Open Forum

Just because you've successfully weeded out job candidates and settled on a new hire doesn't mean the job of bringing that employee on board is over. In fact, to give the new worker the best chance at success, your work is just beginning.

The Cost of Failure Is High

If you thought the cost of hiring a new employee is high, know it's nothing compared with the cost of losing that employee if the worker isn't integrated into the company from the start.

A staggering 50 percent of executives either quit or are fired within their first three years on the job and the cost of that turnover could be many times the worker's base salary, according to the human resources think tank Human Capital Institute. Couple that with the loss of productivity from an employee who isn't clear about a job's objectives and the cost to a business can be significant.

Individualized Attention Is Best

Sure, orientation programs teach the basic ins and outs of the company to new employees. Often, however, that antiseptic approach gives the new hire the minimum and instills a sink-or-swim mentality.

Onboarding a worker tailors the information more toward the employee and encourages success—something the new hire is eager to do on the job.

Architect and business owner Gerit Lewisch of Pennsylvania says a business should have all its paperwork ready and the technical details in place before the new employee walks in on the first day.

"That will show the new hire that the company is truly interested and that the employer means business," he says. "Keep in mind the hire is eager to show off his or her qualifications and will try to have a running start."

The Devil Is in the Details

When the new employee walks in the door, the following things should already be in place or happen to maximize the worker's first day on the job:

1. Prepare all the paperwork. This includes tax forms, insurance applications, work releases and any other necessary documents to get the worker started.

2. Personally welcome your new employee. Nothing shows how much you care about your new hire than a face-to-face greeting, especially in a small business. On the flip side, do you really want a new hire to get the impression your company is indifferent if you forgo a personal greeting?

3. Discuss job expectations. Know there will be a learning curve for any new worker, but make sure the hire understands the job and its requirements to avoid miscommunications and misunderstandings.

4. Set up the work station. Beyond equipment, make sure to have any computer log-ins, phone system IDs, e-mail accounts and security clearance needed for the worker to do the job.

5. Show your new hire around. Give a tour of your company and introduce the new worker to the other staff. Don't be surprised if the new hire has questions about basic things—remember he or she has a lot to absorb on the first day.

6. Keep it simple on Day 1. Give the new worker a simple task that relates to the job. Let the worker accomplish something on the first day.

The Buddy System

Assign a staff member who is well-versed in your company's culture and expectations to be a mentor to the new employee so the person has a connection to go to if questions should arise.

The important idea here is to get the worker plugged in to the staff as easily and as quickly as possible. The mentor shouldn't be the new hire's direct boss because the boss will be responsible for assessing the worker's progress as he or she settles in to the job.

The rest of the staff, too, should be informed of how the new employee will fit in to the workplace to avoid any confusion. "The company has to make sure that the co-workers understand the needs of the company and that the new employee does not threaten their jobs, but will enhance the team in place," Lewisch says.

Linda Doell is an award-winning journalist with more than more than 20 years' experience as a reporter, editor and blogger.