Cost of a Bad Hire for Your Remote Workforce


The state of the modern workforce has changed. Commuter and in-office culture is rapidly being replaced by a majority remote workforce due to public health threats posed by the COVID-19 pandemic. This means that hiring needs are being updated, and in turn hiring practices as well.

Between a flood of job seekers newly employable due to widespread layoffs and closures, and essential organizations such as healthcare facilities and grocery stores scrambling to compensate for increased demand by hiring en masse, it can be only too easy to make a fast hiring decision which backfires somewhere down the line. Hiring the wrong candidate can cost any business a significant amount of time and energy, and a troubling amount of money. 

Surprisingly, around 43% of the U.S. workforce already work from home in some capacity. However the volume of workers now being required to stay in their homes, as well as the new challenge of never being able to actually meet a new candidate face-to-face is unique. New benefits, complications, and costs will continue to reveal themselves over the course of this unprecedented moment in modern history. 

Cost of a Bad Hire

The world may be a very different place than it was three months ago, however the threat posed by a bad hire to any business remains just as problematic. According to a LinkedIn survey it costs over $3,000 on average1 to onboard a new employee1. This estimate includes: 

  • The cost of time spent interviewing the candidate and checking their references
  • The revenue lost by the vacant position
  • The salary of the new employee
  • The salary of the hiring manager
  • The cost of drug testing and background checks
  • The cost of advertisements for the job opening 
  • And the days spent training the new employee

Hiring, onboarding, and training is expensive. 

Smart, well-considered hiring decisions are investments in the productive contribution of a new employee. One hopes that the revenue generated by a good candidate will at some point exceed the initial expense of bringing them into the company. 

Bad hires, on the other hand, come at a net loss to the supporting organization. Depending on the nature of the severance, how soon after hiring your bad candidate was let go, and the salary of the position for which they were hired, a poor recruit can cost between 30 and 200% of their total salary. This means that, for example, if your company makes a quick decision and hires the wrong employee on a $60,000 salary, you could be out $78,000 - 1200,000 after their termination. Whether these costs shift under the current circumstances remains to be seen.

This direct financial loss can pose a hard hit to even larger companies. However the loss of time, loss of productivity, and damage to employee morale and engagement caused by a hire with a bad attitude may be even more detrimental to a workforce than the monetary costs. 

The social and cultural problems which may arise in an in-person office setting — poor team engagement, malicious gossip, an employee not pulling their weight — can translate into a virtual setting (it turns out those “private” side conversations you can have over Zoom aren’t actually so private.)

 In addition, a remote workforce comes with its own unique set of challenges. Keeping workflow moving at a steady and sustainable pace requires every employee in a given organization to do their jobs when they are required to do them — they have to be self-motivated, be able to hold themselves accountable, and they must go above and beyond typical standards of communication to stay up-to-date and in touch with their team. If one bad hire can’t (or won’t) keep up with the rest of the team, efficiency falls and productivity is lost. This can also lead to burnout for those who end up picking up the bad hire’s slack. 

Cost of a Bad Hire: How Checkster can Help

Avoiding a bad hire starts with utilizing smarter hiring and interview practices. Performing comprehensive reference checks is one simple technique that organizations can use to determine the quality and hireability of a candidate. Using automated reference checking solutions, such as Checkster’s Reference Insights, makes the task of sorting quality potentials from underwhelming job-seekers even easier. 

For this uncertain moment in history, and for the world after COVID-19, Reference Insights gives businesses the real picture of a given candidate by gathering high-quality feedback in less time. Using this platform allows you to do away with manual reference checking, and elicits candid, honest feedback from your potential hire’s previous managers, coworkers and colleagues.  

As more businesses are changing their policies to accept and include remote workforces, we may be seeing the rise of a new normal. The importance of performing reference checks to ensure that you’re hiring the right candidate for your team cannot be understated, and will continue to be a vital step in the recruitment process as we move forward. 

If you’re concerned about new hires you’ve already brought on board (and perhaps didn’t get a chance to check their references thoroughly), Checkster also has an invaluable tool for checking in on new hires  -- which is all the more necessary since most are now working remotely.

New Hire Insights allows you to check in on new hires (or even just newly remote employees) to see how they’re faring. You can get a quick pulse on their situation: their morale, their onboarding and training thus far, any IT gaps, or even find out any personal hardships they may be facing. Use the instant insights to create an action plan for retaining employees and helping them be productive from afar. It can also help you uncover bad hires sooner, giving you a chance to team with the hiring manager and determine how to respond.  

Final Thoughts: Cost of a Bad Hire for Your Remote Workforce

A bad hire has always been a detriment to any company -- but now more than ever, with major changes to workforce operations, organizations cannot afford to make hasty hiring decisions. Hiring practices must be updated and adapted to meet the demands of an unprecedented shift in the way the world does business: starting with implementing digital tools that will help you make sure you’re hiring (and correctly onboarding) the right people for your remote team.1