Quantity Over Quality Has Consequences

Seventy-three percent of industrial hiring professionals state they feel pressure to hire quickly. Quality Hires, Quality Output: Smart Talent Strategies for Industrial Hiring links rushed hiring to low productivity, poor work quality affecting customers, high turnover rates, and increased safety incidents. The Talogy report is based on a survey of 855 industrial hiring professionals across manufacturing, logistics, construction, and energy.

According to Quality Hires, industrial employers are wrestling with a persistent skills squeeze and operational shortfalls. Production lines can't pause for lengthy searches, seasonal peaks demand rapid scale-up, and turnover creates sudden vacancies. Under those conditions, hiring managers often default to quick solutions that don't always lead to long-term profitability. Hiring managers end up picking the available candidate and skipping prehire steps such as structured behavioral assessments and structured interviews.

As a result, companies ultimately bring on employees who simply aren't a match with their new role. "They might have inadequate expectations for the physical aspects of the job," the report explains. "Mentally, the routine and repetitive tasks, time pressures, high vigilance, isolation, and physical fatigue can be significant."

Talogy's data shows that the cost of making a bad hire can make a massive financial dent. The report reveals that annual hiring for critical skilled roles from 2022 to 2032 will exceed 20 times the projected annual increase in net new jobs. As a result, employers may face a financial impact of more than $5.3 billion annually due to frequent turnover and the subsequent need for ongoing hiring and training.

Additionally, 51 percent of respondents reported increased costs associated with rehiring and training because of bad hires. Talogy also notes that the US Department of Labor estimates the price of a bad hire at 30 percent of an employee's annual salary, which includes costs associated with recruitment, onboarding, training, and severance packages.

The report goes on to explain that while indirect costs are difficult to estimate, they can increase the cost of a bad hire by as much as three or four times the person's salary. Those indirect costs can include factors such as the negative impact a bad hire can have on team productivity and overall morale.