UK businesses are failing to hire the right person for two out of every five vacancies, a new report from the Recruitment & Employment Confederation (REC) has found.
This is despite the significant financial costs of making hiring mistakes, according to the research, which was comprised of a poll of 500 HR staff and interviews with agency heads.
A new report by the Recruitment & Employment Confederation has found that UK businesses are losing billions by making bad hires for two-fifths of vacancies.
The report, ‘Perfect match: Making the right hire and the cost of getting it wrong’, reveals that 85 per cent of HR decision-makers admit their organisation has made a bad hire, while one-third (33 per cent) believe that these mistakes cost their business nothing.
However, the report also found that a bad hire at mid-manager level with a salary of £42,000 can cost a business more than £132,000. It was discovered that the hidden costs involved in bad recruitment include money wasted on training, lost productivity, and increased staff turnover. This adds up to billions across the UK, according to the report.
The REC also revealed that almost four in ten employers (39 per cent) admit the interviewing and assessment skills of their staff should be improved.
REC chief executive Kevin Green said: “Getting recruitment right is even more important during a time of economic uncertainty because businesses need to ensure they’re not wasting money. Our calculations show that UK businesses are wasting billions every year because of the volume of hiring mistakes being made.
“Shockingly, we discovered that employers are completely underestimating the financial impact of getting recruitment wrong, and not learning how to improve.”
The REC said the first mistakes occur early on in the hiring process, when the company first identifies the need for new talent and the role is defined. According to the report, businesses spend an “inadequate” amount of time reviewing the needs of the hiring outfit.
However, report also said the job specification can be “misleading,” or incorrectly place the focus on “competencies instead of potential”.
The REC revealed that at the next stage in the hiring process, when companies start to entice candidates, they are not accessing talent pools big enough. The language used in job adverts can be “biased” towards certain candidates and a “limited budget” may result in not enough talent being reached.
According to the REC, the number of hiring managers who blame the depth or breadth of the candidate pool for the reason they made a bad hire was found to be almost half at large businesses.
The REC advised businesses to be “confident in recognising hiring mistakes made in the past and aim to rectify these through improved recruitment”.
Posted by Jon Aspinell on 29th June 2017
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