When companies are desperate to fill positions, they sometimes settle for what they can find on short notice instead of hiring the best. Some companies are also slow to act when they hire someone who ultimately underperforms. For a company to thrive, you need the most talented employees in the industry. Yet, few companies realize how much mediocre talent can cost your business. In this post we’ll cover how much settling for mediocre talent may be costing your business.

The Cost of Not Topgrading

One reason that companies retain employees who underperform is a fear that their replacement will perform even worse. These fears aren’t unfounded. Studies show that 50% of replacements are the same quality as the employee who previously held the position, while 25% perform worse and 25% perform better. Topgrading can help with this problem. Jack Welch has long advocated the importance of topgrading in the interview process. If you use an evidence-based screening process during interviews, you’ll more likely to hire high performers, which, in turn, eliminates the need to keep on mediocre talent. This is important because research indicates that top talent accounts for 80% of a company’s productivity.

The Cost of Mis-hires

Mis-hires are costly. While it may seem like having an unfilled position is even more costly because your other team members have to pick up the slack, what you really need is to find great talent faster. When you hire the wrong talent, they won’t be effective in their job and others will still need to pick up the slack. Eventually, they will either quit or you will need to fire them. Then, you have to put even more time and energy into finding a replacement. Another cost of a mis-hire is missed opportunity. Every time you hire a mediocre performer, you have missed the opportunity to hire a great performer who can really contribute to your team. You also miss out on business development opportunities because you don’t have the talent in place to follow through.

Don’t Skimp on Talent: Hiring Mediocre Talent Is Worse Than Hiring Bad Talent

Having mediocre talent in your organization is worse than having bad talent because they have a bigger effect on company culture. Truly bad performers don’t stay long. Within a month, they either quit or are forced out. Mediocre talent can stick around for months or even years. Mediocre talent sets a bad example for the rest of the team. You don’t want employees to think you settle for anything other than the best. Plus, the more competent team employees will start to resent the company, especially if they’re making the same amount of money as the mediocre talent. You don’t want your best talent leaving you for a company with higher standards.


Onboarding is also an important part of the equation. An effective onboarding strategy can help ensure high-quality candidates live up to their potential and thrive in your company. At the same time, you don’t want to waste money and time on providing on-boarding to a mediocre candidate who won’t last or contribute to your company.

Especially when you and your company are under a great deal of pressure, it’s easy to make the mistake of settling for mediocre talent. Yet, mis-hires can cost your company more than you think. Mediocre talent not only costs you time and money, it also hurts your company’s reputation and can stir up resentment among your higher performers.


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