One properly sourced Australian figure, an honest account of where the money goes, and a warning about the numbers you will find everywhere else.
$7.3 billion a year
The cost of wrong hires to Australian small and medium businesses, with a single bad hire costing up to $16,000.
Research commissioned by SEEK and conducted by advisory firm Nature, surveying more than 950 small businesses across Australia and New Zealand. Reported by SmartCompany, February 2026. Checked 5 August 2026.
That is the one figure on this page with a named commissioner, a named research firm and a stated sample size. Everything else you will read on this topic deserves more scepticism than it usually gets, and the second half of this page explains why.
A bad hire is not one cost, it is six, and only the first is obvious.
| Cost | Why it is bigger than it looks |
|---|---|
| Wages paid for work not done | The visible one. Also the smallest on this list |
| The vacancy, twice | You carried an empty seat before, and you carry it again after. Two vacancies for one hire |
| Your hours, twice | The 13 to 29 hours a hire takes, run through a second time from the beginning |
| Supervision and rework | Someone competent stops doing their own job to check and redo the work |
| The effect on everyone else | Good people notice who is carrying whom. This is the cost nobody puts a number on and the one that lingers |
| Customers | In a trade, a bad hire meets your clients. That damage does not end when the employment does |
Notice how many of those are the same costs as an unfilled role, paid a second time. That is the useful way to think about it: a bad hire is a vacancy you also paid wages for. The weekly arithmetic is on what an unfilled role costs you every week.
Search this topic and you will meet confident multipliers: a bad hire costs 30 per cent of first year earnings, or 2.5 times salary, or $50,000. They are repeated everywhere and are almost never traceable to a method.
What to check before you quote one: who paid for the research, how many businesses were surveyed, in which country, and in what year. A figure that cannot answer those four is marketing, not evidence.
Most of the numbers in circulation are American, some are over a decade old, and a good many come from companies selling the software that supposedly prevents the problem. That does not make them wrong. It does mean you should not put one in front of your accountant.
This is also why the figure at the top of this page is stated with its commissioner, its research firm, its sample and its publication date, and why there is only one of them.
Rushing, because the seat is costing money.
It is a genuinely difficult position. The empty seat bills you every week, the pressure to end that is real, and the cheapest looking way out is to appoint the best of a weak field. That decision converts a $2,250 a week problem into a problem that costs the same amount and also has to be managed, supervised and eventually undone.
The honest framing: filling a role slowly is a known, weekly, predictable cost. Filling it badly is an unknown cost with a long tail. Given the choice, take the one you can measure.
None of this is complicated, and most of it costs nothing.
Those five are effectively what the Skilled Screen is: licences verified, screened against your brief, history checked, rate locked, and if one step fails the name never reaches you.
You pay nothing until your hire starts, and if they leave inside the first 90 days we replace them free. That does not make a bad hire costless to you, and it would be dishonest to suggest it does. Your time and disruption are still yours. What it does mean is that the risk is not sitting entirely on your side of the table.
Research commissioned by SEEK and conducted by advisory firm Nature, surveying more than 950 small businesses across Australia and New Zealand, put the cost of wrong hires to Australian small and medium businesses at $7.3 billion a year, with a single bad hire costing up to $16,000. Reported by SmartCompany in February 2026.
That figure circulates widely and is rarely traceable to a method. Before quoting any multiplier, check who paid for the research, how many businesses were surveyed, in which country and in what year. Many of the numbers in circulation are American, older than a decade, or published by companies selling software that claims to solve the problem.
The effect on the people who stay. Good employees notice who is carrying whom, and that cost has no invoice and outlasts the employment. The second is that you pay for the vacancy twice, before the hire and again after.
Usually yes. An empty seat is a known, weekly, predictable cost. A wrong hire costs roughly the same in lost output, adds wages, supervision and rework on top, and is much harder to reverse. Given the choice, take the cost you can measure.
Verify licences yourself from the register rather than the resume, ask about the actual work job by job instead of relying on job titles, agree the rate before anyone becomes attached to the outcome, check references at the end rather than the middle, and do not lower the bar just to end the vacancy.
If they leave inside the first 90 days we replace them free, and nothing is payable until your hire starts. That does not make a bad hire costless to you, because your time and the disruption are still yours, but the risk is not sitting entirely on your side.