The Real Cost of a Poor Hire (And How to Avoid It)

The Real Cost of a Poor Hire (And How to Avoid It)

By Lavender and Sage HR & Recruitment | Expert Insight for SMEs

Hiring the wrong person is more than just an inconvenience; it can quietly erode team morale, disrupt operations, and cost your business thousands. For small to medium-sized enterprises (SMEs), where every role carries weight, the impact of a poor hire is magnified.

The Hidden Costs Behind the Wrong Hire

Most employers think of costs in terms of recruitment fees and salary. But that’s just the surface. The real costs include:

• Lost productivity – A misaligned hire can slow projects, create confusion and drain team energy.

• Increased management time – Line managers spend significant time trying to support or correct performance issues.

• Team morale and culture – When a hire is disruptive or misaligned, the effect ripples across your team, potentially leading to the departure of stronger employees.

• Brand and reputation – If your clients interact with the wrong hire, it can impact trust, service standards, and repeat business.

• Recruitment do-over – You’ll need to restart the hiring process, taking up more time, money and energy.

According to the CIPD, the cost of a bad hire can range from £12,000 to over £30,000, depending on the level and seniority of the role.

Why SMEs Are More at Risk

SMEs often move quickly, lack internal HR infrastructure, or rely on instinct over process. While this agility is a strength, it can lead to shortcuts that undermine hiring decisions:

• Rushed or unclear job descriptions

• Lack of structured interviews or candidate assessment

• Prioritising availability over capability

• Failing to assess values and team fit

This isn’t just a recruitment problem; it’s a business risk.

How to Avoid the Trap: Proven Strategies That Work

At Lavender and Sage, we support SMEs to build recruitment processes that are both human-centred and commercially sound. Here’s how to reduce the risk:

• Be values-led: Hire for alignment with your culture, not just technical fit

• Use structured interviews: Score responses objectively and consistently

• Invest in onboarding: Set expectations clearly from day one

• Work with a recruitment partner: One who understands your sector, your values and your pace

Download: Free SME Guide - The Cost of a Poor Hire

To support SME leaders in making confident, informed decisions, we’ve created a free downloadable guide that outlines:

• A cost breakdown of a poor hire

• A simple 6-step checklist to improve hiring decisions

• Onboarding red flags and how to act on them early

• Questions you should ask your recruitment partner

🔽 Click here to download your free guide: "Avoiding Costly Hires – The SME Leader's Toolkit" (PDF)

Let’s Get It Right, Together

If you’re hiring now or thinking about your team structure in the next six months, we’d love to support you. Our recruitment and HR consultancy is built to help SMEs grow confidently, sustainably and with the right people in place.

📩 Book a no-pressure discovery call to see how we can help your next hire be the right one.