Eric Handler headshot Written by: Eric Handler

What’s Worse – a Bad or an Average Hire?

Leaders are both responsible for and greatly affected by the quality of the talent the organization brings on board. So it’s important that they have an educated understanding of the true, long-term effects and expenses involved for each type of hire.

Bad hire stories juice the office grapevine, and often graduate to viral legend and cautionary textbook tales, but there’s a hire with far worse consequence: the average hire.

A bad hire becomes evident quickly. Everyone involved knows the hire was a mistake, and must be corrected. Everyone is also keenly aware of the high cost to the company in terms of wasted time and resources, stalled progress and damage to morale – not to mention a loss of credibility for the hiring manager and team.

On the other hand, things aren’t so clear with the ‘Average’ Joe or Jane hire.

Average isn’t so bad; and at times, it’s almost good. So the average hire is tolerated, accommodated for years, and leaders fall blind to the true cost the company is paying by having settled for mediocrity.

Based upon our 40 years of experience, the total cost of a bad executive hire is three times the first year’s total compensation. The silver lining of a bad hire is that the costs end when the person is released; whereas the average hire creates ongoing intangible drag, permeating mediocrity into the company culture that extends beyond the length of service. We peg the cost of an average hire at more than triple that of a bad hire, or 10 times the first year’s total compensation.

At Handler & Associates, we believe that once companies experience the impact and value that hiring a strong leader can have on their business, they will never, ever settle for bad or mediocre again.

Next month, we explore this topic further in the Handler Report, A Contrast of Hiring Costs and How to Hire Excellence.

Additional Resource: Click here to watch a 2 minute video of Zappos CEO Tony Hsieh explaining how bad hires have cost the company over $100 million and what they did about it.

For nearly four decades, Handler & Associates has partnered with clients to deliver high-quality, challenge-ready executive leaders.