"The average 18-month failure rate across industries is 46%—meaning nearly one in two hires either underperforms significantly or leaves within 18 months. The cost of each of those failures runs between 50% and 200% of that employee's annual salary."
"A company making 50 hires a year at average fully-loaded salaries of $95,000 is sitting on a financial exposure somewhere between $1.1 million and $4.4 million annually. Not from a failed product launch or a bad acquisition."
"Most organizations have more hiring data than they've ever had. They track time-to-fill, cost-per-hire, offer acceptance rates, applicant volume by source. Dashboards are full, yet the same expensive mistakes keep happening."
"Time-to-fill tells you how quickly you processed candidates. It tells you nothing about whether you hired the right person. Those are fundamentally different metrics."
The average failure rate for new hires is 46%, costing companies between 50% and 200% of an employee's salary. For a company hiring 50 employees annually at $95,000 each, this translates to significant financial exposure. Many organizations lack visibility into these costs, which are not clearly reflected in financial statements. Despite having access to extensive hiring data, companies often measure irrelevant metrics, leading to repeated hiring mistakes. Effective hiring requires focusing on the right performance indicators rather than just processing speed.
Read at Fast Company
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