The Hidden Costs of Hiring the Wrong HR Person (and How to Avoid Them)

When businesses decide it’s time to bring HR expertise in-house, the stakes are high. Whether you’re scaling quickly, dealing with complex compliance issues, or trying to improve retention, hiring the right HR person can transform your business.

But hire the wrong one?

It’s more than just a bad fit it’s one of the most expensive mistakes you can make.

In fact, research shows that a single bad hire can cost a business 3–4 times the role’s annual salary when you add up direct and indirect losses. And in HR, where decisions directly affect your people, culture, and compliance the fallout can be even greater.

Let’s explore the real cost of getting it wrong and how to avoid it. 

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💸 The True Cost of a Bad HR Hire

1. Financial Drain: Recruitment, Salary & Replacement

Hiring is expensive. Between job board fees, recruiter costs, interview time, and onboarding, you’re often investing £10,000–£20,000 before your new HR hire even starts.

If that person isn’t right for the job:

• You’ll pay for severance or exit costs.

• You’ll invest again in replacement recruitment.

• You may even face legal costs if things turn sour.

📊 Example: A £60,000 HR Manager who leaves after 6 months could cost over £150,000 once you factor in wasted salary, lost productivity, and rehiring.

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2. Compliance & Legal Risk: Mistakes That Cost Millions

HR isn’t just about people it’s about protecting your business from risk.
A poorly skilled HR person might:

• Miss crucial legislative updates, exposing you to legal claims.

• Mishandle grievances or dismissals, leading to costly tribunals.

• Fail to put robust policies in place, leaving your company vulnerable.

The UK average award for an unfair dismissal claim is around £15,000–£20,000, but reputational damage and time spent in court can multiply that significantly.

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3. Cultural Damage: The Cost of Lost Trust

Your HR team is the guardian of your culture. If they lack emotional intelligence, communication skills, or credibility, the ripple effect can be devastating:

• Staff disengagement rises as trust in HR drops.

• Key talent leaves because issues aren’t handled well.

• Toxic behaviours go unchecked, creating deeper organisational problems.

A single poor decision in HR can undo years of work in building a strong culture.

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4. Missed Strategic Opportunities

The right HR person does more than keep you compliant they help your business grow.
The wrong hire often operates reactively, leaving opportunities on the table:

• No clear people strategy aligned with business goals.

• Weak leadership development and succession planning.

• Missed chances to improve retention, productivity, and profitability.

In fast-growth sectors like tech or finance, this lack of strategic foresight can slow down scaling and impact valuation.

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🧭 Why Businesses Get HR Hiring Wrong

Even with good intentions, many companies make these common mistakes:

• Rushing the hire because HR is “urgent” rather than strategic.

• Focusing on CVs over competencies hiring someone with corporate experience but no SME adaptability.

• Overvaluing HR admin skills and undervaluing strategic or commercial acumen.

• Not testing values alignment  a cultural mismatch is often more damaging than a skills gap.

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✅ How to Avoid the Costly Mistake

The good news? With the right approach, you can dramatically reduce the risk of a bad HR hire.

1. Clarify What You Really Need

Before writing a job description, define the business outcomes you want HR to achieve in the next 12–24 months. Are you seeking compliance, culture change, scaling support, or leadership development? Each requires a different skillset.

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2. Think Flexibly – Don’t Default to Full-Time

Many businesses don’t actually need a full-time HR leader especially early on. A fractional or outsourced HR consultant can often deliver higher-level expertise for a fraction of the cost.

Platforms like Link into HR Consulting® connect you with vetted, experienced HR consultants who can provide the expertise you need, whether that’s 5 hours a week or a major transformation project.

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3. Use Assessment Tools

Behavioural profiling tools such as Thomas PPA or Motivational Maps help you understand how a candidate will actually behave in the role not just how they interview. Combining these with structured competency interviews reduces the risk of bias and improves hiring accuracy.

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4. Prioritise Commercial Credibility

Modern HR is a strategic business partner, not just a policy writer. Look for evidence of:

• Driving measurable business outcomes.

• Supporting leaders through change.

• Aligning people strategy with commercial goals.

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5. Trial with a Project First

Before committing to a full-time hire, consider engaging someone on a short-term project (e.g. building a people strategy, leading a restructure). You’ll see their impact in action and reduce long-term risk.

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🚀 Final Thoughts: HR Should Be a Profit Centre, Not a Cost Centre

Hiring the right HR professional is one of the most strategic investments you can make  but hiring the wrong one can become a six-figure mistake.

By slowing down the hiring process, defining outcomes clearly, and considering flexible or project-based expertise, you’ll not only save money but also position HR as a true driver of growth and culture in your business.

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🔎 Ready to Get It Right First Time?

If you’re scaling and want access to trusted, vetted HR experts without the recruitment risk, Link into HR Consulting® can match you with the right consultant for your business  quickly, flexibly, and cost-effectively.