Apr 8

4 Hidden Costs: Why Hiring The Wrong Job Applicant Can Cost Your Company Up To R300K

Hiring Talent Online


Companies have never done, spent, or hired the wrong person as much hiring as they do in today. When it comes to costly mistakes, few can compete with hiring a badly matched candidate. This mistake is not rare either – 74% of companies admit to hiring the wrong person for a role. For each of these bad hires, CareerBuilder reports that an average of R286k ($14,900) was lost per wrong candidate.

Hiring the wrong person is not something a business owner or head of HR wants to deal with – not only are there serious financial costs, but also time, energy, and other related costs to the business.

Here’s how the costs of hiring the wrong candidate add up:


On top of the salary that a business needs to pay the new hire, there are often training costs associated with onboarding a new member of staff – especially a candidate who is not up to a company’s expected standard. If the training doesn’t get the candidate to where the company needs them to be, employers can end up paying for severance packages. This, on top of the costs to replace the inadequate employee.

Using an external recruitment agency to search for a replacement candidate can cost an average of $4100 per mid-level job hire in the USA and using an internal team to recruit a candidate can be costly in other ways.


40% of CFOs report that hiring the wrong candidate costs the business in productivity and sales. Taking time to train, retrain, and integrate a new hire into existing teams causes productivity levels to suffer.

Even with the extra time spent on training employees, it is often not enough to guarantee good or even up-to-standard performance. Line managers and supervisors spend about one day per week managing poorly performing employees instead of completing more essential responsibilities.

Employee Morale

Whilst managers focus on trying to train, integrate, or even correct the mistake of hiring the wrong person, other staff members may become disengaged and dissatisfied. A single badly matched employee can bring an entire team down. In many cases, bad hires do not fit in with the company culture or other team members, which causes additional stress for both managers and staff members. 95% of financial executives report that a bad hire negatively affects the morale of a team.


With access to information on just about anything online, job seekers are able to locate reviews and experiences of working for a particular company. A negative review can be left by either the bad hire themselves or an employee who was negatively affected by the bad hire. One bad review can hinder a company’s chances of attracting, recruiting, and hiring future employees who would a great match for a role.

In summary, hiring the wrong candidate is expensive – it costs a company money, time, morale, and even their reputation. There are less costly and time-consuming options out there that are available to hiring managers.

Online recruitment platforms, such as Nomad Now, are being used to tackle the financial costs of recruitment by cutting out the need to go through a recruitment agency. The platform is built using technology that only allows candidates who are a match (skills, experience, and personality-wise) to apply to job adverts. This means lower chances of hiring “the wrong person”.

Sign up as an Employer to access, transact with, and recruit professionals for your staffing needs! Click Here.

About the author 

Julia Paton

Julia studied a Bachelor of Arts degree with majors in Film, English and Psychology followed by a Post-Graduate Diploma in Marketing, both at the University of Cape Town. Whilst at university, she co-founded “Shots Fired Productions” a photography & videography micro-business. In addition to her entrepreneurial spirit, Julia brings to the team international experience gained from working at an advertising agency in Hamburg (Germany) and managing the marketing portfolio at an AI & Data Science Company in Sydney (Australia).

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