Bad hires are certainly a concern. I think this is the reason why people buy screening products such as personality tests. Paying $100 for a screening test that promises to prevent the $100k cost of a bad hire seems like a pretty good bargain. It reminds me of Pascal's Wager, where you give a little bit to the church in order to avoid the infinite risk of hell.
The test seemingly has to be 0.1% effective, to pay for itself. The thing that's hard to imagine is that the test is even less than 0.1% effective, because it's a scam. This is also how things are sold like a $5 extended warranty for a flash drive.
And, as always, lets pretend false positives do not exist.
Do you know what's even more expensive than a bad hire? It's letting an extraordinary hire go away because your snake-oil test did not work. But that loss won't make onto a spreadsheet, then, who cares?
The test seemingly has to be 0.1% effective, to pay for itself. The thing that's hard to imagine is that the test is even less than 0.1% effective, because it's a scam. This is also how things are sold like a $5 extended warranty for a flash drive.