The Cost of a Bad Hire starts with an impressive CV. A charming interview. Confident answers.  “They seem perfect.” You take the leap.

Then the cracks begin to show. Deadlines missed. Excuses multiply. Your team starts whispering.
Your top performers are frustrated, spending hours picking up slack.

You’ve already invested weeks in onboarding, training, and orientation with payroll rising; time and money you can’t get back.

Then comes the truth.

  • The degree? Fake.
  • The references? Fabricated.
  • The “five years of experience”? An illusion.

And suddenly, that one hire isn’t just underperforming, they have compromised your systems, mishandled funds, or leaked sensitive data.

Now you’re dealing with damaged trust, shaken morale, and that one HR nightmare of starting all over again.
Add legal risks, reputational damage, client doubts and the cost becomes far greater than a bad hiring decision.

Because a wrong hire doesn’t just affect one desk. It ripples through your culture, your budget, your credibility.

Every wrong hire costs more than money, it costs trust.
And trust, once broken, takes far longer to rebuild than a résumé takes to fake.

In Kenya, and in any growing economy in Africa, where businesses are scaling quickly and hiring pressures are high, the stakes have never been higher. One fraudulent employee can cost you millions.

Let’s break down the real cost of a bad hire, most employers don’t calculate it, and what you can do to protect your organisation.

The Direct Financial Cost

A bad hire typically costs a company between 6 to 12 months salary of the the employee.

Here’s is a simple example:

  • Entry-level position (KES 50,000/month): A bad hire costs -KES 300K – 600K
  • Mid-level manager (KES 150,000/month): A bad hire costs -KES 900K – 1.8M
  • Senior executive (KES 400,000/month): A bad hire costs -KES 2.4M – 4.8M

These costs come in many forms but mainly include:

  1. Recruitment expenses (ads, agency fees, interview time)
  2. Onboarding and training investment
  3. Lost productivity during the hiring process
  4. Re-hiring expenses to fill the position again
  5. Termination cost

And you will be lucky if there are no legal fees to be paid as a dispute may be unavoidable.

But that’s just the beginning.

The Hidden Costs You Don’t See

  1. Employee Fraud and Theft

Real examples:

  • A major Kenyan bank fired over 1,200 employees after uncovering a KES 2 billion internal fraud scheme
  • The Postal Corporation of Kenya terminated 29 staff members for falsified academic credentials
  • Government audits in 2025 revealed 859 forged certificates among public servants

  1. Fake Academic Credentials

The Kenya National Qualifications Authority has identified over 10,000 fraudulent certificates across various public sectors.

Hiring someone with fake qualifications means:

  • They lack the skills needed for the role
  • Your projects and deliverables suffer
  • Your company’s credibility is at risk
  • You may face legal consequences if discovered during audits

  1. Team Morale and Productivity

A bad hire doesn’t just affect one desk.

When an unqualified or dishonest person joins your team:

  • High performers become frustrated
  • Team productivity can drop up to 30%
  • Good employees start looking for other jobs
  • Company culture suffers

The cost is Lost productivity, increased turnover, and a damaged employer brand.

In August 2025, the Employment and Labour Relations Court upheld an employer’s right to terminate a hire based on adverse background check results during probation, but only if proper screening procedures were followed.

Without evidence-based vetting, you’re gambling with your organization at the dealers table.

If you still rely on CV reviews (easily falsified), reference checks (unreliable), “Gut feeling” interviews (subjective and risky) and manual verification (slow and incomplete).

You might get results but the problem is that these methods don’t catch fraud until it’s too late.

By the time you discover the degree is fake, the references are from best friends, the previous employer never existed or there’s an undisclosed criminal record, you’ve already invested months of salary, training, and trust.

 

The Solution to the cost of a bad hire: Evidence-Based Hiring starts with Background checks

Evidence-based hiring means verifying every claim a candidate makes before they join your team. This approach empowers you as a HR professional to make decisions based on evidence, not bias, and helps minimize employee-related risks proactively.

At Peleza, we help employers:

  • Verify national IDs in real-time
  • Confirm academic credentials
  • Check criminal records
  • Validate previous employment history
  • Conduct social media checks

The result?

You hire with confidence. Your team is built of competent credible and trusted people. Your business is protected.

Background Checks Real ROI: What You Save

Let’s say you are hiring 10 employees this year at an average salary of KES 100,000/month.

Without background checks:

  • 1-2 bad hires (industry average)
  • Total loss: KES 3.6M – 12M

With Peleza background checks:

  • Investment: KES 50,000 – 100,000 (for 10 comprehensive checks)
  • Bad hires prevented: 1-2
  • Net savings: KES 3.5M – 11.9M

The cost of a bad hire is too high to ignore.

But the solution is simple: verify before onboarding.

Here’s what you can do today to start your evidence based hiring.

Book a free demo and see how Peleza can protect you with evidence based hiring: Book demo

 

About Peleza

Peleza is Kenya’s leading background check and identity verification company.

We help businesses make evidence-based hiring decisions through real-time ID verification, academic credential checks, criminal record searches, and employment history validation among other checks, all fully compliant with Kenya and global Data Protection procedures.