Cost of a failed recruitment: calculation, impact and solutions

The cost of a failed hire is often underestimated, but it can weigh heavily on your company's finances. In addition to direct expenses such as the remuneration of recruiters, the costs of publishing offers or the use of specialized firms, subsidiary costs are added: reduced productivity, disruptions among employees and relaunch of the recruitment process.

In France, The cost of recruiting between 3,000 and 10,000 euros per post, and errors can significantly increase these figures without guaranteeing satisfactory results. In some cases, the period necessary to compensate for a failed recruitment may extend over months, undermining the profitability of a contract concluded with the employee concerned.

Add to that the time needed to restart the process and find a suitable replacement: it's months of lost efficiency, a recruitment budget to recalculate, a fragile team, and a very real financial risk.

In a tense market where every talent counts, the cost of recruitment and its associated costs is not a fuzzy line in the HR budget: it is a key indicator.

Recruiting is a strategic opportunity to strengthen your team. However, poor selection can lead to additional costs, delays in onboarding, reduced morale and, sometimes, premature departure of the employee. This forces the process to be repeated, amplifying financial and organizational losses.

Find out how to calculate the cost of poor recruitment, how to limit its impact, and tips for sustainably improving your hiring strategy.

What do we really mean by “failed recruitment”?

A concrete and measurable definition

One external recruitment Failure is generally defined by the departure of an employee during the first 12 months after being hired, i.e. during the initial period of his contract. This break can be initiated either by the employer or by the employee himself.

This type of failure can also be measured by the newcomer's inability to achieve the goals set, or by a failure to integrate into the team. These situations often lead to a decrease in productivity and collective demotivation.

Weak signals to detect in advance

Early signs of failed recruitment include early turnover, rapid employee disengagement, internal tensions, and negative reviews about the company. These signs can appear as early as the onboarding phase, such as a lack of involvement, difficulties in integrating with colleagues, frequent delays or absences, and negative feedback from managers and colleagues.

Common causes of a bad hire

The reasons for a bad hire are often linked to inaccurate targeting of candidates, a poorly executed or incomplete selection process, broken employer promises, and absent or insufficient on-boarding. These errors can create a mismatch between the employee and the company, leading to difficult adaptation and non-compliance with defined objectives. These situations also highlight the importance of devoting an appropriate period of time to the evaluation of each candidate.

How much does a failed recruitment really cost?

Why poor hiring costs way more than expected

Direct and indirect costs not to be overlooked

Beyond the figures already mentioned, it is essential for any company to put in place a real proactive strategy in order to reduce the risk and cost of failed recruitment. Indeed, each casting error is not limited to the simple departure of an employee: it has a set of direct and indirect consequences that can have a lasting impact on performance.

The calculation of the cost should not only take into account the gross annual salary paid to the employee and the recruitment costs (publication of an advertisement, call to a firm, sourcing, interviews, evaluation tests, tools used...), but also the related social charges, the time spent by the HR team and managers on the recruitment process, as well as the loss of productivity linked to a vacant or poorly occupied position. This loss can be compounded by the additional workload imposed on other team members, which sometimes leads to a decrease in employee motivation and morale.

Impact on reputation and employer brand

Poor hiring can also be costly in terms of reputation: in a tense job market, employer branding plays a key role in attracting talent. A premature departure or a failed integration often results in negative reviews on social networks or specialized sites, which can discourage future candidates from applying. Indirect costs also include administrative management, whether it is a broken trial period, a contractual termination or a dismissal. In all cases, a new recruitment process must then be launched, with a new budget, a new deadline and sometimes additional recourse to a specialized firm.

Visible costs: what can be easily quantified

The visible costs of a failed recruitment include several clearly identifiable elements. These include recruitment fees (hiring costs), the salary paid to the employee during their employment time, the corresponding social security contributions, as well as the costs related to training and onboarding. These expenses are easily quantifiable, as they are directly associated with the recruitment process and the integration of the new employee into the company (replacement cost).

Estimating hidden costs: what we always underestimate

Hidden costs, on the other hand, are often overlooked but can represent a significant portion of the total cost. They include the decrease in productivity, the negative impact on teams due to the additional workload, general demotivation, as well as the consequences on the company's employer image.

In addition, there is the opportunity cost, which corresponds to what a company could have achieved with an employee who was more competent or better suited to the position. It's a real waste of time and money.

The average cost of poor recruitment according to studies

Studies show that calculating the cost of a failed hire can vary considerably. In France and Europe, this cost is estimated between 30,000 and 150,000 euros, depending on the profile of the position (technician or manager) and when the employee leaves the company. According to the National Business Research Institute (NBRI), a hiring mistake can cost up to 1.5 to 2 times an employee's annual salary, or even more in some cases.

Example of simple and concrete cost calculation for a management position

To better understand, let's take the example of a failed recruitment for a management position with a gross annual salary of 60,000 euros. Applying the range of 1.5 to 2 times the annual salary to assess the cost of failure, this means that the total amount could be between 90,000 and 120,000 euros. To this figure, we must add the direct costs associated with recruitment, which can vary from 20,000 to 50,000 euros, depending on the complexity of the process and the possible use of specialized firms.

Finally, do not forget to include the duration of the drop in productivity and the costs associated with replacing the employee, which can further increase the overall cost.

Concrete example and levers to avoid mistakes

Numerical illustration of poor recruitment

Let's take the concrete example of an executive, with a gross annual salary of €50,000. If the new recruit leaves the company within the first six months, the employer will not only have paid around €25,000 in remuneration and social security contributions, but also invested several thousand euros in direct costs: distribution of offers, interviews, interviews, training time, internal support. Add to this the replacement cost and the drop in productivity, the total amount can easily exceed €80,000. This figure, although average, is often underestimated in internal calculations, even though it reflects a real financial challenge.

Best practices for limiting risks

To avoid these situations, it is crucial to optimize each stage of the candidate journey. This requires a precise definition of needs, a rigorous sorting of profiles, the use of reliable tests to assess technical and behavioral skills, but also through structured onboarding. Good support for the new employee upon arrival, with an involved manager, clear objectives and regular feedback, considerably increases the success rate of a hire. Internal mobility can also be a relevant solution: by focusing on employees who are already integrated into the culture and values of the company, we reduce the risk of error and the costs associated with external recruitment.

Measure and adjust continuously

Finally, we must not neglect the continuous measurement of performance: monitoring indicators such as the turnover rate in the first year, the average cost per recruitment or the average duration of replacement of a vacancy makes it possible to quickly identify flaws in the process and to act before the impact becomes critical. Successful recruitment is the result of a thoughtful investment: it involves not only a financial budget, but also time, energy and human resources. The more the company evaluates and adjusts its practices, the more it increases its chances of attracting and retaining the right talent... and of turning each hire into a real driver of growth.

What are the impacts on the organization?

A disorganization of daily work

Unsuccessful recruitment has a real effect on the organization and often causes disorganization in daily work. When a collaborator is unable to integrate effectively, tasks need to be redistributed to other team members. This can lead to overwork for existing employees, increasing their stress (and impacting employee morale) and causing a decrease in productivity. As a result, the quality of service provided to customers may decrease, affecting the overall performance of the organization.

Long-lasting effects on collective dynamics

The consequences of failed recruitment on collective dynamics can be profound and lasting. A drop in employee morale and a loss of trust among teams can emerge. This negative climate can have a domino effect, increasing turnover within the team. Employees, frustrated by instability and uncertainty, risk disengaging, impacting collective cohesion and productivity.

A strategic risk for some key functions

A failed recruitment in a key or strategic function can have direct repercussions on the business. This can slow down projects, weaken the relationship with customers, and damage the company's image in the market. In the long term, this situation can lead to a loss of market share and a deterioration in the company's reputation, thus compromising its strategic position. In some cases, the length of time allowed for the adaptation of the recruited employee is insufficient, leading to misunderstandings about the responsibilities expected.

How do you avoid recruitment mistakes?

Anticipate risks as soon as the need is defined

To avoid a new failed recruitment, it is essential to anticipate risks as soon as the need is defined. This involves a precise clarification of the profile sought, by identifying the key skills needed, whether technical or behavioral.

It is also important to consider the context of the team and the objectives associated with the position. A well-developed, accurate and realistic job description helps to frame expectations and effectively guide the recruitment process.

Making the assessment reliable during the selection process

The reliability of candidate evaluation is a decisive factor in minimizing errors. The use of concrete scenarios, tests to assess soft skills and structured interviews based on a scorecard makes it possible to objectify the selection.

These tools help ensure a better match between the candidate's skills and the job requirements, reducing the risk of errors during the final choice.

Successful onboarding: the key to sustainable integration

Structured onboarding is essential to ensure a successful and sustainable integration. This includes a well-thought-out integration process, with support from a mentor or a referent manager, regular feedback and an adaptation of missions according to the evolution of the employee.

This approach encourages the new employee to adhere to the company's culture and increases their chances of success in the long term.

Relying on specialized partners

Finally, collaborating with specialized partners can greatly optimize recruitment. Recruitment agencies provide valuable expertise in the selection of candidates. In addition, innovative assessment tools and ATS (Applicant Tracking System) simplify management and increase the reliability of the process.

These solutions make it possible to reduce the costs associated with recruitment errors while improving the employer brand.

The case of complex recruitments: attention to multiplier effects

Recruiting shortage or technical profiles

The recruitment of scarce or technical profiles represents a major challenge due to the scarcity of suitable candidates and the considerable time required to identify them. These processes often require additional financial investments, especially for broadcast campaigns, the use of specialized firms or the use of advanced assessment tools.

If they fail, the consequences are serious: they directly affect business growth by slowing project development while increasing the indirect costs associated with an extended vacancy.

Managerial or responsible positions

Recruitments for managerial positions or positions of responsibility are particularly strategic. An error in choosing a candidate is not limited to impacting the person recruited, but can have negative repercussions on the entire team. A loss of leadership or a poor integration of a manager can weaken the collective dynamic and lead to a cascade of departures.

These HR challenges then take on a critical dimension, with lasting strategic consequences on the overall performance of the company.

Measuring, preventing and improving: a continuous approach

What KPIs should you follow to detect slip-ups?

To quickly identify slippage in your recruitments, it is important to follow relevant key performance indicators (KPIs). Among them, the cost per recruitment helps to control the expenses associated with each hire, while the success rate at 6 or 12 months assesses the company's ability to retain new hires. The turnover rate offers a perspective on the stability of teams, and post-integration feedback makes it possible to gather the impressions of new collaborators on their onboarding experience and their suitability for the position.

How to estimate the ROI of a reliable recruitment process?

Evaluate the return on investment (ROI) of a reliable recruitment process is based on a comparative analysis between the costs avoided through better selection and the value added by the employee in his position. Successful hiring contributes to team satisfaction, improves productivity, and reduces expenses associated with an early departure or additional recruitment.

ROI also includes the reduction of indirect costs, such as demotivation or team disruption, in addition to direct savings on the recruitment budget.

Develop your practices in an agile way

To ensure the effectiveness of your recruitment process, it is essential to adopt a agile approach. This involves regularly readjusting selection criteria based on feedback, using predictive analysis tools to anticipate candidate success, and promoting a feedback culture in order to continuously improve the candidate and employee journey. This proactive approach guarantees recruitment in line with the needs of the company and the realities of the market.

Conclusion

A failed recruitment can have costly and lasting repercussions for a business. Each error in this area has direct and indirect costs, impacting not only productivity, but also the dynamics within teams.

To prevent these situations, it is essential to properly identify needs, to make the assessment of candidates more reliable and to take care of the integration of new recruits. By optimizing the onboarding period and clarifying contract terms from the start, businesses can reduce the risk of failure and improve their hiring process. It's time to take action to attract top talent and maximize the results of your recruiting efforts.

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