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The Litigation Exposure From That One Bad Hire

By Jack McCalmon, The McCalmon Group, Inc.

A CareerBuilder survey reveals insights into the cost of bad hires for employers. The survey included 2,257 full-time hiring and human resource professionals and 3697 full-time workers.

Here are the most meaningful findings:

  • Three out of four employers have made a bad hire.
  • The average cost of the bad hire is approximately $14,900.
  • The average cost of losing a good employee because of a bad hire is estimated at $29,600.
  • 37 percent responded that a bad hire has hurt productivity.
  • 32 percent stated they have lost the time taken to recruit and train a new worker.
  • 31 percent say a bad hire hurt the quality of work.

"Nearly Three in Four Employers Affected by a Bad Hire, According to a Recent CareerBuilder Survey" prnewswire.com (Dec. 07, 2017).


Commentary by Jack McCalmon, Esq.

Missing from these findings is the liability risk from a bad hire.

Employers eventually terminate their bad hires. Most litigation stems from discharges, according to the EEOC.

In addition, retaliation allegations often grow out of terminations. In its most recent fiscal year, the EEOC reported 41,097 retaliation claims, which represented 48.8 percent of all charges filed.

To eliminate the risk of a bad or inappropriate hire, it is crucial that employers use good hiring practices. We have written extensively on this subject:

   

Some other points to consider:

  • Take your time when hiring. Some of the worst hires are a direct result of hiring too fast and without enough due diligence.
  • Avoid hiring friends and relatives. A bad or inappropriate hire that is a friend or relative is more difficult to fire and thus increases your chance of losing good employees.
  • When terminating a bad employee or one just not suited for the position, make certain that you have objective versus subjective reasons for the termination. Know that you may have to prove to a third party that this person was a bad hire.
Finally, your opinion is important to us. Please complete the opinion survey:

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