The real cost of a bad hire

Finding good staff has become one of the biggest challenges facing businesses, but according to We Are HR co-founders Leanne Clavan and Grant Barrow, hiring the wrong person can be even more costly.

As workforce shortages continue and competition for talent remains strong, many businesses are feeling pressure to fill vacancies quickly. The pair say that urgency often leads to poor recruitment decisions that create bigger problems down the track.

“The labour market has completely changed,” Grant said. “We’ve got an ageing workforce retiring, younger staff wanting more flexibility and meaning from their work, and everyone feeling burnt out after years of pressure.”

Leanne said employees now have more options than ever before.

“If they don’t feel valued or supported, they’ll leave, even for a small pay rise somewhere else,” she said.

Why businesses get recruitment wrong

According to Leanne, one of the most common recruitment mistakes is rushing the process.

“Leaders are often time poor and desperate to fill the gap so they hire the first person who looks OK without checking if they’re the right fit for the team or the culture,” she said.

“Leaders who say to us, ‘well if they don’t work out we’ll just get rid of them’, are really missing the point.”

Grant said many employers place too much emphasis on technical capability while overlooking personality traits and behavioural fit.

“Hire someone lacking in technical skills and it is addressable to some extent, but hire the wrong personality type and you are going to have problems,” he said.

“It is very hard to change personality traits and a 30-minute interview is just not long enough to get a handle on this.”

The hidden financial impact

The consequences of a poor hiring decision can extend well beyond recruitment costs.

“Hiring a new staff member conservatively costs around $15,000 and $30,000 and getting rid of them is likely to cost you more,” Grant said.

Beyond the financial impact, businesses can also face performance issues, lost productivity, lower team morale and additional pressure on leaders and managers.

Leanne and Grant say taking more time to understand candidates before making a hiring decision can significantly reduce risk and improve long-term outcomes.

Why people stay

While recruitment is important, the pair believe retention remains one of the biggest challenges facing employers.

“There is a saying, ‘people don’t leave jobs, they leave leaders’. This is so true,” Leanne said.

“Feeling genuinely valued and supported by their leader, especially when the pressure is on or if they make a mistake, drives strong retention.”

Employees are also looking for more than just salary, according to Leanne.

“They want flexibility, real support when life gets tough, and genuine opportunities to learn and grow,” she said.

“Above all, they want to feel like they’re not just a number. They want to know their opinions matter and that leadership actually cares about their wellbeing.”

Grant added that workplace culture plays a significant role in retention.

“People stay where they feel respected, where they can grow, and where someone notices when they’re doing a good job,” he said.

A simple place to start

When asked what business owners could do immediately to improve retention, both pointed to a simple leadership habit.

“Start listening better,” Grant said.

“Simple, regular catch-ups with your team, not just when there’s a problem. Just go for a walk and ask them what’s going on.”

Leanne said businesses often underestimate the impact of small, consistent actions.

“Small, consistent actions like that make a much bigger difference than big one-off gestures,” she said.

As businesses continue competing for talent, Leanne and Grant believe organisations that invest in better hiring decisions, stronger leadership and workplace culture will be better positioned to attract and retain quality people over the long term.