Why poor hiring decisions are the most expensive mistakes a company can make

After years of working and researching in education and career development, I have seen a recurring issue in how many Vietnamese companies handle recruitment. Despite an increasingly competitive business environment, many businesses still treat hiring as a low-priority task.

They often view it as a formality, posting a vague job ad, requiring applicants to "have experience," and waiting passively for resumes to arrive. This approach not only drives away talent but also leads to hidden costs in human resources.

One survey found that each unsuitable employee costs a company, on average, 1.5 times their annual salary. Poor performance, internal conflict, and replacement expenses all contribute to this loss.

For example, if a company pays VND20 million (US$760) a month for a position, a bad hire could cost more than VND300 million. By contrast, investing in a proper hiring process, building an employer brand, writing clear job descriptions, and ensuring fair screening costs much less.

Yet many companies still repeat three common mistakes.

First, they focus too much on experience. Many employers demand that candidates "must have three to five years in the industry," forgetting that skills, attitude, and adaptability matter more for long-term success.

One of the world’s largest tech corporations conducted an internal study and found that performance did not correlate with years of experience. Instead, it was strongly linked to problem-solving ability and collaboration skills.

Second, they post poor-quality job ads. Many listings consist of just a few lines, such as "Sales staff needed. Salary negotiable." These ads fail to attract qualified candidates. People do not know what the job involves, what they will learn, or what rewards they can expect. A good job ad should act like a career invitation: Clear, honest, and inspiring.

Third, they lack a long-term hiring strategy. Many businesses only recruit when there is an urgent need. This leads to rushed decisions and poor hires. In contrast, successful companies maintain a pool of potential candidates and treat hiring as a continuous process, not a last-minute solution.

A young woman shakes her recruitment manager's hand after a job interview. Photo by Pexels

To fix this, managers must stop seeing recruitment as a cost and start treating it as an investment. But what kind of investment?

First, in employer branding. Candidates want to know they are joining a professional, growth-oriented environment.

Second, in the hiring process. This includes writing transparent job descriptions, conducting structured interviews, and using multi-angle evaluations.

Third, in candidate experience. Treating applicants with respect, even those who are not selected, helps build a positive image of the company.

People are the backbone of every organization. No matter how brilliant a business strategy may be, it cannot succeed without the right team to carry it out. Many startup founders in Vietnam admit that their biggest failures were not due to bad ideas or lack of funding, but because they hired the wrong people.

Hiring the right talent saves time and money. It also builds a healthy culture and strengthens a company’s competitiveness. In today’s world, efficient recruitment is no longer a "nice to have" but a must for any business that wants to grow sustainably.