The Rising Cost Of Bad Cultural Fit

Finding and hiring the right candidates is arguably one of the most critical aspects to the successful running of any business. Though finding talent that possesses both the skills and experience required to support your business and that also aligns with your company culture can be challenging for many employers. According to CareerBuilder,  bad cultural fit impacts nearly three in four (74%) hires. 

The financial impact of bad cultural fit in the workplace:

When you hire someone who is not a good cultural fit for your business, you’re likely going to need to spend more money:

  • Replacing them and advertising their role
  • Administrating their resignation
  • Covering their workload by either paying for overtime or for a temp

 According to the REC, the cost of a bad hire at mid-manager level with a salary of £42,000 can end up costing a business £132,015 in total to resolve. There are also qualitative costs to consider, some of which are harder to track like the impact on staff morale, clients and employer brand. 

All these costs will need to be absorbed by the business which can be particularly challenging in smaller organisations where rising costs of bad hiring aren’t easily digestible. According to a report by the REC, 93% of business leaders acknowledge that a poor hiring decision has a direct effect on the performance and financial implications listed, which are: 

  • 41% the time and money spent to recruit the employee 
  • 53% the time and money spent on training the employee
  • 46% the negative impact on staff morale and performance 
  • 36% the general loss of productivity 
  • 24% negative impact on bottom-line and employer branding
  • 21% increased turnover

Hiring the wrong candidate is also a missed opportunity to find the right talent you need to scale your teams. The benefits of sourcing your perfect match are paramount and there are several strategies that businesses can put in place to ensure they effectively screen candidates before making a critical hire. 

Why is cultural fit important? 

According to research by PwC, 66% of C-suite executives and board members believe culture is more important to performance than the organisation’s strategy or operating model. Hiring an individual who is a good cultural fit for your business results in a positive, two-way relationship between you and your new employee. Not only will they effectively collaborate with existing team members, but they will be working for a business where they feel valued and trusted, as priorities and working preferences align. 

This increases their likelihood to quickly adapt and flourish in their new surroundings which in turn, makes them feel confident, motivated, and more likely to have a positive impact on existing team members, as well as:

  • Improve your talent attraction and retention 

Hiring for cultural fit will positively impact your work culture, creating teams are all working towards the same goal. Naturally, this reduces staff turnover and improves your chances of garnering referrals as happy employees help to elevate your reputation amongst their peers. 

  • Enhance employee engagement 

High levels of employee engagement are crucial for business success and mean that your employees are more likely to remain invested for the long haul. 

  • Increase productivity 

When your staff feel comfortable and satisfied with their work environment, naturally they will be more enthusiastic about taking on new challenges and responsibilities. When you hire a good cultural fit for your business, this will have a knock-on effect on your entire team and will result in high-level performance from your employees. 

  • Boost your employer brand 

Happy employees mean loyal employees! Not only will they consider themselves valued team members who actively contribute towards business objectives and goals, but their share in your success will also mean they’re less likely to leave and more likely to promote your brand outside of a work environment. 

  • Lower recruitment costs

According to REC, the cost of a bad hire in most cases, is 3.5 times the basic salary. When you hire the right individual who can develop alongside your organisation, you’ll only need to pay for their recruitment costs once over! 

How to conduct a culture fit assessment at interview 

The solitary positive result of a bad hire is that you can learn from your mistakes and understand what could be improved next time. Although top talent may have all the skills needed to perform in their new role and complete their business-as-usual activities, they won’t perform at the highest level if they don’t fit in with the team, department, or wider company culture.

As well as creating a job ad that will attract the right calibre of candidates to your organisation, the interview stages are a golden opportunity to assess whether or not an applicant fits into your workplace culture. You can ask questions that gauge their personality and strengths, as well as determine whether they’ll get along with existing team members. 

To ensure you find individuals who hit the ground running from day one, make a good first impression with clients, etc., it’s important to ask the right questions at interview to draw out their specific personality traits, drive, and values, such as:

  • Describe a work environment or culture in which you are most productive
  • Describe your preferred management style 
  • What are the positive aspects of your current role and work environment?
  • What is the most important factor in a work environment for you to be happily employed? 
  • What role are you most likely to play in a team?
  • How would your co-workers describe you?
  • What are your expectations of senior leaders in order to work successfully?

It’s important to remember that you are not trying to find candidates who are exactly the same as you and your team, but rather individuals who share your values and who will compliment your existing structure.

How can Barclay Simpson help?  


Barclay Simpson is an international recruitment consultancy that specialises in recruiting professionals for the interrelated disciplines of governance, namely information/IT security, risk, resilience, audit, compliance, legal and treasury. 

When you’re looking to find the right candidates to scale your teams, we can help with effective screening and onboarding to ensure your new employees align with your company values and culture. 


Get in touch today to find out how we can help