The U.S. Department of Labor says it’s about 40% of the person’s first-year salary. So if you’re hiring for a $60,000 accounting role, you’re potentially losing $24,000. That’s not even counting what you lose in morale, productivity, or time.
When you factor in recruiting, onboarding, and compliance risks, one bad hire isn’t just a small setback; it can derail a lot more than expected.
What is a Bad Hire, Anyway?
It’s someone who looked great on paper but didn’t work out in practice. Maybe they lacked the skills. Maybe they weren’t a good team fit. Or maybe they just didn’t care enough to do the job well.
Let’s say you hire an accountant who crushed the interview. But a few months in, the cracks start to show. Deadlines are slipping. Errors are stacking up. The team is picking up the slack. At this point, it’s not just a bad hire. It’s a drag on the entire department.
Bad hires show up in different ways, including:
Poor performance: Missed deadlines, constant mistakes, or subpar output
Cultural mismatch: They don’t vibe with your team or your processes
Attitude problems: Lack of motivation, no accountability, resistant to feedback
Missed compliance: Ignoring the rules and putting the company at risk
Customer issues: Negative interactions that impact your brand and service
Not every bad hire is easy to predict, but there are ways to catch warning signs before they join your team.
The True Cost of A Bad Hire on Your Accounting Team
Business News Daily puts the average cost of a bad hire around $17,000. But the real damage often goes beyond money.
Productivity Takes a Hit
Accounting isn’t the kind of job you can fake. You need someone who’s organized, careful, and fast. One wrong entry can cause a chain reaction, wasting hours of team time, or worse, going unnoticed until it becomes a bigger issue.
If someone’s slowing things down or creating rework for others, productivity tanks. That’s time you’ll never get back.
Team Dynamics Get Rocky
Strong teams rely on trust and rhythm. When one person is clearly underperforming or not a good fit, it wears on everyone else. Resentment builds. Communication breaks down. People start picking up extra work they didn’t sign up for.
You don’t need perfect chemistry every time, but you can use behavioral assessments to find people who’ll mesh better with your existing team.
Clients Start to Notice
Inconsistent work shows up fast, especially if the hire is customer-facing. One tone-deaf email or missed deadline, and suddenly you’re fielding complaints or dealing with negative reviews. Even if it’s behind-the-scenes, sloppiness in accounting can shake a client’s trust.
Compliance Becomes a Risk
There’s no way around it: If your company’s record-keeping doesn’t comply with all federal, state, and local authorities, you could be in big trouble. And your accounting department plays a major role in this process.
That’s why putting the right person in the right role is more than good business. It’s basic protection.
How to Avoid a Bad Hire on Your Accounting Team
Hiring smart isn’t about luck. It’s about being intentional. Here’s how to improve your odds.
1. Conduct Thorough Background Checks
While impressive resumes and glowing references are certainly important, they don’t always tell the full story. That’s why it’s crucial to conduct thorough background checks on all potential hires.
Verify their employment history, educational credentials, and any professional certifications or licenses they claim to hold. A little extra due diligence can go a long way in avoiding costly hiring mistakes down the line.
2. Prioritize Soft Skills
While technical accounting skills are undoubtedly essential, don’t overlook the importance of soft skills like communication, time management, and attention to detail. These skills can often make the difference between a good accountant and a great one.
During the interview process, ask situational questions that allow candidates to demonstrate their soft skills in action. For example, you might ask them to describe a time when they had to meet a tight deadline or communicate complex financial information to a non-technical audience.
3. Use Pre-Employment Assessments
Implementing pre-employment testing, such as cognitive abilities testing, into your hiring process is one step toward avoiding the probability of such hiring mistakes.
Cognitive and reasoning tests and basic accounting knowledge skills assessments can be useful for prospective accounting hires. An applicant can have the perfect resume listing every skill you’re searching for, but you need to know that they can execute those skills, or learn them efficiently.
The use of automated, technology-driven processes grows each year, but 57% of accountants found technology literacy to be the most critical skill for accounting staff, according to Sage. You need someone with basic tech skills, at a minimum, to manage your workflows.
While that’s simply one example, if the skills and reasoning abilities aren’t there, pre-testing candidates will save time and will weed out people from your pipeline more quickly.
Testing for cognitive abilities,behavioral traits, accounting knowledge, and overall critical thinking skills will give you more information about each candidate, which will help you make more informed, data-driven hiring decisions.Remember, a bad hire isn’t just a headache; it’s a potential financial and cultural drain on your organization. Don’t leave your accounting team’s success to chance. Invest in the right hiring tool, such as pre-employment tests, and watch your business thrive.
