A new report from the Recruitment & Employment Confederation (REC) has determined UK businesses are failing to hire the right person for two out of five roles, costing billions every year.
Produced in partnership with Indeed, Perfect match: Making the right hire and the cost of getting it wrong defines the real cost of poor hiring, highlights the common mistakes made by employers, and provides practical advice to businesses determined to avoid financial risks at every stage of the hiring process.
According to the findings, 85% of HR decision makers admit to their organisations having made a ‘bad hire’ in the past, a ‘bad hire’ at mid-manager level with the average salary of £42,000 could potentially cost a business up to £132,000 in damages; with hidden costs including increased staff turnover, training and lost productivity. However, a third (33%) stated the ‘bad hires’ did not affect their business financially.
Kevin Green, the REC’s chief executive 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. This report outlines the hidden costs of making hiring mistakes, and outlines how employers can implement a robust selection process to minimise this risk and improve performance.”
Furthermore, four in 10 (39%) acknowledge the assessment and interviewing skills of their staff needs to be improved.
According to Leadership Data IQ, more than 40% of recruits turn out to be ‘bad hires’ within 18 months, and the number of bad hires made in Q1 2017 (745,880) multiplied by average weekly earnings for full-time employees (£539 per week) is £402,029,320 per week, data from the Office for National Statistics (ONS) has revealed.
To find out more about how to access the report, click here