Costly Hiring Mistakes and How to Avoid Them

Claire Monroe

Hey everyone, welcome back to The Science of Leading. I’m Claire Monroe, and as always, I’m joined by the ever-wise Edwin Carrington. Edwin, how are you doing today?

Edwin Carrington

Doing well, Claire. Always glad to be here, especially when we’re tackling a topic that, frankly, every leader dreads—hiring mistakes. It’s one of those things that can quietly unravel a team if you’re not careful.

Claire Monroe

Yeah, and I think a lot of people underestimate just how much damage a single bad hire can do. I mean, it’s not just about the money, right? There’s this ripple effect—morale, productivity, even your company’s reputation can take a hit. I remember early in my career, we rushed to fill a role in my department. On paper, the candidate looked great, but within a few weeks, things started to go sideways. Projects stalled, people got frustrated, and honestly, it took months to recover. It was like this invisible tax on the whole team.

Edwin Carrington

That’s a classic scenario, Claire. And you’re not alone—according to SHRM, a single bad hire can cost up to 30% of that person’s first-year salary. But that’s just the visible part. The real cost is often hidden: lost productivity, onboarding expenses, the time managers spend correcting mistakes, and the emotional toll on the team. I’ve seen small businesses lose momentum for half a year because of one misaligned hire. It’s not just about the dollars—it’s about lost opportunity and trust.

Claire Monroe

And it’s so easy to fall into those traps, right? Like, you’re under pressure to fill a seat, maybe the job description is a little vague, or you skip a reference check because you’re in a rush. Suddenly, you’re dealing with way more than you bargained for. I think a lot of leaders don’t realize how those little shortcuts can snowball.

Edwin Carrington

Absolutely. Most bad hires aren’t just “bad luck”—they’re the result of gaps in the process. Whether it’s unclear expectations, skipping structured interviews, or just moving too fast, those shortcuts come back to haunt you. And the impact isn’t isolated. High performers end up picking up the slack, morale drops, and sometimes your best people start looking elsewhere. It’s a chain reaction.

Claire Monroe

So, it’s not just about avoiding a headache—it’s about protecting your team’s energy and your company’s growth. I think that’s a good place to start, because if you don’t understand what’s really at stake, it’s easy to repeat the same mistakes.

Edwin Carrington

Exactly. And as we’ve discussed in previous episodes, the first step is always awareness. If you know what leads to a bad hire, you can start to build a process that actually works, not just for the role, but for the whole organization.

Claire Monroe

So, Edwin, let’s dig into what actually causes these costly mistakes. I know culture fit is a big one. I read that SHRM found 89% of new hire failures are because of poor fit, not lack of skills. That’s wild. Why do you think so many companies still overlook this?

Edwin Carrington

It’s a great question, Claire. I think there’s a tendency to focus on what’s easy to measure—skills, experience, keywords on a résumé. But culture fit is harder to quantify, so it gets pushed aside. The irony is, it’s usually the most expensive mistake. When someone doesn’t align with your values or work style, it creates friction. Communication breaks down, collaboration suffers, and before you know it, you’re repairing morale and trust, not just replacing an employee.

Claire Monroe

And then there’s the automation piece. I mean, AI tools are everywhere now—screening résumés, ranking candidates. It sounds efficient, but I’ve heard stories where great people get filtered out just because they don’t have the “right” keywords. There was that Harvard Business School study—over 10 million qualified workers overlooked by automated systems. That’s a huge loss of potential.

Edwin Carrington

That’s right. Automation can be a double-edged sword. I had a client who automated their entire screening process. The system was fast, but it missed their eventual top performer—a candidate with a non-traditional background. The only reason she made it through was because a recruiter took a second look and saw something the algorithm didn’t. If they’d relied solely on the AI, they would’ve missed out entirely. Automation is a tool, not a decision-maker. It can help with logistics, but it can’t replace human judgment, especially when it comes to soft skills and fit.

Claire Monroe

And then there’s the pressure to move fast. I get it—sometimes you just need someone in the seat. But when you rush, you skip steps. Maybe you don’t do a behavioral assessment, or you cut the interview short. And then you’re right back where you started, only now you’ve got a demoralized team and higher costs. It’s like, the faster you try to go, the longer it actually takes in the end.

Edwin Carrington

Exactly. Rushed decisions almost always backfire. The cost isn’t just financial—it’s emotional fatigue for the team, lost productivity, and sometimes even damage to your client relationships. I always tell leaders, “It’s better to wait for the right person than to hire the wrong one quickly.” And as we’ve seen, the data backs that up. The average cost of a bad hire can be up to 30% of their first-year earnings, and for leadership roles, it can be three to five times their salary. For a small business, that can be devastating.

Claire Monroe

So, whether it’s ignoring culture fit, over-relying on automation, or just moving too fast, the risks are real. And honestly, most of these mistakes are preventable if you slow down and use the right tools.

Edwin Carrington

That’s the key—intentionality. If you’re clear about what you need, and you’re willing to invest the time up front, you can avoid most of these pitfalls. It’s not about making the process longer—it’s about making it smarter.

Claire Monroe

Alright, let’s get practical. If someone’s listening and thinking, “Okay, I get it—bad hires are expensive. But what do I actually do differently?” Where should they start?

Edwin Carrington

First, write precise job descriptions. Be clear about what success looks like, not just the tasks. Define the outcomes, the behaviors, and how the role fits into your strategy. That’s your foundation. Then, use behavioral assessments—like OAD—to get a deeper read on candidates. These tools help you see beyond the résumé, into how someone will actually show up on your team.

Claire Monroe

And structured interviews, right? We talked about this in a previous episode—having a consistent set of questions, scoring candidates objectively. It’s not just about “vibes” or gut feeling. It’s about making sure you’re comparing apples to apples, and reducing bias wherever you can.

Edwin Carrington

Exactly. And don’t forget about the candidate experience. Communicate clearly, give feedback, and treat every candidate with respect. A poor experience can drive away top talent and hurt your reputation. According to CareerPlug, nearly 60% of candidates have declined a job offer because of a bad hiring experience. That’s a huge missed opportunity.

Claire Monroe

And the cost of a bad hire isn’t just theoretical. For leadership roles, it can be three to five times their salary. I mean, if you hire someone at $80,000 and it doesn’t work out, you could be looking at $240,000 or more in total costs. For a small business, that’s a game-changer.

Edwin Carrington

It really is. So, the question for leaders is: How do you balance urgency with quality? My advice—build in time for reflection. Use scorecards, assessments, and structured interviews. And always ask yourself, “What one change would make the biggest impact on our next hire?” Sometimes, it’s as simple as slowing down and asking better questions.

Claire Monroe

I love that. And I’d add—don’t be afraid to revisit your process after every hire. What worked? What didn’t? Continuous improvement is how you avoid repeating the same mistakes. And if you’re not sure where to start, tools like OAD can help you see the patterns and make smarter decisions.

Edwin Carrington

That’s right. Hiring isn’t just about filling seats—it’s about building the future of your business. When you invest in the right people, you’re setting yourself up for growth, not just survival.

Claire Monroe

Well, that’s a wrap for today. Thanks for joining us on The Science of Leading. Edwin, always a pleasure learning from you.

Edwin Carrington

Likewise, Claire. And thanks to everyone listening. Remember, every hire is a chance to build something better. We’ll see you next time.

Claire Monroe

Take care, everyone. Bye for now!