Hiring the wrong person hurts. But in finance, where accuracy, trust and commercial impact matter more than most, it can also be very costly.
From the costs of advertising the role, damaged team morale, and regulatory risk, the ripple effects of a mis-hire hit hard and can linger long after the person has left the building.
So, what’s the true cost of a bad hire in finance? And more importantly, how can you avoid making one?
The Numbers Stack Up (and Not in Your Favour)
Studies consistently show how underestimated this problem is. A report by the Recruitment & Employment Confederation (REC) found that 85% of HR professionals have worked for a business that hired the wrong person for a role. And, sadly, nearly half of all new employees fail within the first 18 months.
How much does that cost? More than you’d think.
According to the same report, a bad hire at middle management level with a salary of £42,000 could end up costing a business £132,015 once you factor in training, recruitment, loss of productivity, morale impact and backfilling costs.
In finance roles, where mistakes carry higher stakes, the impact can be even more severe. A bad hire can lead to compliance failures, delayed filings, regulatory penalties or loss of investor trust.
The true cost isn’t just monetary. It’s also the opportunity cost of not hiring someone who could’ve accelerated growth or improved financial processes.
What’s Really at Stake for Your Business?
- Hard Costs – Upfront and Ongoing
Hiring someone new isn’t cheap, even when it goes well. Even after you’ve advertised the role, interviewed and made a job offer, you’ll still have other costs to pay for.
Recruitment fees
Whether you’re using a retained or contingent model, recruitment fees are usually around 20% of the annual salary. If you have to pay this twice in 6–12 months, that’s budget you won’t get back.
Training and onboarding
From ERP system logins and internal finance process walkthroughs to compliance training and team induction sessions, getting a new person up to speed takes time and can cost around £1,530 on average.
Monthly salary
Each month a mis-hire is on your payroll, it costs your business and adds no value. It’s not just the salary either. Add National Insurance, pension, software licences, hardware and lost management hours, and you’re paying thousands for disruption.
Rehiring costs
Then, if it doesn’t work out, you’re back to square one. Another vacancy to advertise. Another onboarding process. All while your team remains under pressure, and deadlines loom.
- Lost Productivity
Employing the wrong person can also have several knock-on effects within your business. First of all, it can dent productivity.
Other team members pick up the slack
When the new person underdelivers, your other colleagues absorb their workload. That breeds resentment, reduces motivation and can contribute to burnout or even push your best people out the door. If you have five team members working at 80% productivity for 10 months to cover the bad hire, it’ll cost you almost £30,000.
Project deadlines slip
From audit preparation to budget forecasting, finance teams don’t have room for inefficiency. One person dropping the ball can delay month-end reports, disrupt decision-making or jeopardise compliance timelines.
Time lost managing issues
Instead of focusing on strategic planning for your business, you’re stuck dealing with performance management and then having to go through the whole re-hiring process.
Try building a simple 30-60-90-day performance framework into your new recruit’s onboarding. Set clear expectations, align on KPIs early and set regular feedback meetings. It’s an easy way to protect productivity and give you an early indication about whether things are going to work out.
- Cultural Disruption
In a finance team, cohesion is critical. Bringing in the wrong person can quietly grind down that cohesion, often before the numbers show it.
Damages morale
High performers want to work in high-performing teams. If a new joiner is disruptive, inconsistent or clearly not up to standard, it lowers the bar for everyone and affects retention.
Creates friction
Finance doesn’t work in a silo. From commercial and ops to board-level conversations, poor communication or collaboration skills in one team member can slow down the whole business.
Top performers question their own future
Finding people who fit within your company culture is so important. If your best people feel surrounded by the wrong attitudes or skill levels, they’ll start to look elsewhere.
- Reputational and Regulatory Risk
When it comes to finance hires, you’ll need to consider more than just the new recruit’s day-to-day performance. You’ll also need to think about risk.
Investor scepticism
An inaccurate forecast or late budget submission can knock investor confidence and stall potential funding rounds.
Loss of trust with stakeholders
Errors in reporting or inconsistency in financial outputs lead to probing questions from the board, lenders or external auditors.
Fines and regulatory breaches
Misinterpreted VAT filings. Incomplete ESG reporting. Misalignment with IFRS or FCA expectations. These aren’t just operational blips, they’re legal liabilities.
Don’t just hire for technical skills; test for regulatory awareness and attention to detail. At Core3, we can help by running scenario-based screening exercises and assessing candidates’ track records under pressure, especially for high-risk roles.
Why Bad Hires Happen (And What You Can Do About It)
Even the most experienced hiring managers and decision makers can fall into hiring traps. Some of the most common reasons we’ve seen are:
Rushing the hire because the gap is urgent
You’re under pressure and you need someone yesterday. A third of all bad hires happen because businesses rush the process, but speed shouldn’t compromise suitability.
Over-relying on CVs instead of assessing the actual business impact
A polished LinkedIn profile doesn’t mean someone can manage your cash flow or be on top of regulatory reporting.
Missing cultural alignment because the candidate “ticks all the boxes”
They might have the right credentials, but if they clash with the team or underwhelm in communication, the fit just won’t last.
Working with generalist recruiters who don’t understand modern finance teams
Hiring a finance leader isn’t the same as filling a generic commercial role. Your chosen recruitment partner will need sector fluency and contextual understanding of finance’s evolving role.
How Core3 Helps CFOs Hire Smarter
We get it. The pressure to hire is real, but so is the risk of getting it wrong. That’s why our Core3 Method focuses on long-term performance, not short-term fixes.
Here’s how we work differently:
- Access to pre-qualified, commercially minded finance professionals
We look beyond the CV. We understand candidates as individuals and assess their cultural fit, motivations, and long-term potential so we can help businesses find people who aren’t just right on paper but are the right fit for their team. - Market intel on salary benchmarks, benefits, and competitor hiring trends
Want to know what your competitors are offering? Or what does a top Financial Planning and Analysis lead cost in Bristol vs. London? We’ve got that data. Check out our 2025 salary guide. - Support on team structure, succession planning and talent retention
We’re not just here for your next hire. We build lasting relationships with our clients so we can help build the whole team, sustainably and strategically.
We’ve helped dozens of CFOs and Finance Directors across the UK build smarter, stronger teams, from newly created roles to full finance leadership restructures.
Don’t let a bad hire cost your business. Reach out to one of our team members, and let’s discuss how we can find the right candidate.
