ALTRES Industrial Staffing in Hawaii - Employers: Estimating the Cost of a Bad Hire

Industrial Staffing > Employers > Resources > Estimating the Cost of a Bad Hire

Estimating the Cost of a Bad Hire

In many cases staffing services offer less expensive alternatives to getting your work done. For example, do you know what it really costs you to employ your staff? The “hidden” expenses associated with being an employer are often underestimated. Things like recruiting, interviewing, training, benefits administration, management and turnover really add up! Consider the following expenses for an administrative employee at $20,000 who terminates after one month:

(You can plug values appropriate to your company in the highlighted fields, and the grand total will automatically be re-calculated.)

Cost Area		Your Estimated Cost

HR Time

Create specifications for the position Prepare classified ad Review resumes from 50 ad responses Telephone screen ten candidates Schedule, prepare for and conduct five interviews Conduct assessment testing for three candidates Reference check for three candidates Total HR Time: ($ per hour x hours)		$/hr. x = $



Other Recruitment / Interviewing Costs

Management interview time ($ per hour x hours)		$/hr. x = $
Other interviewers’ time ($ per hour x hours)		$/hr. x = $
Cost of advertising (3" ad run for three Sundays)		$



Salary and Related Costs

Salary (for one month)		$
Benefits (based on national average of 35%)		$
Overhead, administrative expense, etc. (20%)		$



Training / Orientation / Answering Questions

Trainer's time ($ per hour x hours)		$/hr. x = $
Manager's time ($ per hour x hours)		$/hr. x = $



Productivity Losses

Compensating for sub-standard performance (co-workers doing or re-doing bad hire’s work: assumes bad hire is working at 75% capacity)		$/hr. x = $



Grand Total		$

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