Hiring the wrong person is costly, and not just in the obvious ways. Most people think of the expenses that come with replacing someone: new recruitment, onboarding and another salary to cover. But beneath the surface are hidden costs that quietly drain time, money and productivity. And many of those costs sit in the background-check process itself.
In this blog, we’ll look at the true cost of a bad hire, the inefficiencies that make checks more expensive than they seem and how our ROI Calculator helps you put a number on it.
It’s no surprise that a bad hire hits the bottom line, but the size of the impact often does. Research shows a bad hire can cost up to 30–40% of that employee’s annual salary. That means a wrong decision for a $100,000 role could set you back $30–40k.
And that’s just the direct costs. The ripple effects are bigger:
As Neil Rose, CEO of Referoo, puts it:
“It’s not just about the salary wasted. A bad hire slows the whole team down, impacts client outcomes and creates a cycle of extra recruitment spend. The hidden costs often outweigh the obvious ones.”
All of this makes the real cost of a bad hire far greater than their pay cheque.
Background checks exist to prevent bad hires, but the way they’re run can add unnecessary cost. Many HR and TA teams still spend hours on:
Take references as an example. Traditional reference checking can take 30–60 minutes per candidate just to connect with three referees. Multiply that by every role and it’s clear how much recruiter time is being lost.
If you’re working across disconnected systems for reference checks, police checks and academic verifications, you’re not just paying the check fee. You’re also paying in wasted time, slower hires and extra pressure on your team.
With Referoo Hub, all your checks, from ID to professional qualifications, run in one process. One platform, one request to the candidate, no wasted time.
Neil explains:
“We talk to HR teams every day who are juggling five different systems just to get one hire over the line. That’s hours of lost productivity, time that could be spent building a better candidate experience instead.”
Every day a role sits vacant is a day of lost productivity. Slow or inefficient background checks drag out your time-to-hire, and those delays carry their own price tags.
These aren’t abstract risks. We’ve seen schools forced to shuffle timetables because teacher checks weren’t cleared and childcare providers unable to open rooms because staff were still waiting on clearances. In finance and healthcare, delays can hold up compliance or even compromise safety.
As Neil notes:
“Candidates today won’t wait weeks for checks to clear. If you’re not moving fast, you’re losing talent, and the costs of replacing them are far higher than investing in a faster, smarter process.”
Knowing about these hidden costs is one thing; measuring them is another. That’s where our ROI Calculator comes in.
It helps you put real numbers around:
For many teams, the eye-opener is that the vendor’s check fee is often the smallest part of the expense. The bigger cost is the wasted recruiter time and the candidates lost along the way.
If you’re nodding along to the challenges above, you’re not alone. Many HR and TA teams are already cutting costs and delays by switching to Referoo Hub, the all-in-one platform that brings every check into a single, automated workflow.
With Referoo Hub, you can:
By centralising your background and reference checks, you remove the bottlenecks that slow your hiring and free your team to focus on what matters most – engaging and onboarding great people.
In high-stakes industries like finance, healthcare, education and childcare, you can’t afford slow or clunky checks. The risks are too high and the cost of inefficiency is too great.
By moving to an integrated, automated process, you protect your team’s time, improve your time-to-hire and keep compliance airtight. That means better hires, less pressure and a stronger ROI on every check.
As Neil sums up:
“Efficiency in background checks isn’t about cutting corners. It’s about removing the friction points that slow your team down. When you get it right, you hire faster, reduce risk and give candidates a much better experience.”
Want to see what your checks are really costing you? Try our ROI Calculator today.
And if you’re ready to see what a faster, smarter process looks like, book a Referoo Hub demo. We’ll show you how to cut the clutter and keep your hiring moving.