How much hiring the wrong person is costing your business
When it comes to recruiting new employees, getting it right the first time is particularly important and the cost of hiring the wrong person will undoubtedly overshadow their value to the organisation. Whether there’s a lack of required skills, poor quality work or simply a bad culture fit, when a new employee doesn’t work out, it can result in a range of costs. The direct and indirect and short and long-term impact on time and money can be a much-underestimated threat to your organisation.
A report from the Recruitment & Employment Confederation (REC) has found that for a shocking two out of five roles, UK businesses are failing to hire the right candidate despite the financial implications.
Over a third (33%) of companies believe that hiring mistakes cost their business nothing, when in fact, a poor hire at mid-manager level with a salary of £42,000, for example, can cost a business more than £132,000.
The accumulative costs involved in bad recruitment include increased staff turnover, money spent on training and lost productivity. It was also revealed that hiring the wrong person can have a negative impact on morale and productivity amongst existing staff, which often results in worse monetary losses than those related to the recruitment.
In addition, 85% of decision-makers within HR admit their organisation has made a bad hire, and 39% of employers admit that their interviewing and assessment skills for candidates could be improved.
REC Chief Executive, Kevin Green, comments: “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.”
Chris Pestell, Regional Business Manager at Bond Williams, says it’s not just about hiring the right person for the job, but ensuring that successful candidates become long-term members of staff:
“Staff turnover is expensive and effective retention starts with getting the onboarding process right. In the short term, be clear about what you want, employ second interviews and capability tests if needed and ensure you have a system in place for integrating new staff. Longer term, you need to invest in a comprehensive management and appraisal process and ensure two-way communication. This will go a long way in reducing the chances of a ‘bad hire, improving staff retention rates and ultimately, reducing overall recruitment costs.”
Using a professional and reputable recruitment agency like Bond Williams, can significantly reduce the risk of hiring the wrong person, as the consultants are experienced at understanding your requirements and pre-qualifying candidates before they even get to the interview stage. The only problem you should be facing is how to decide between two great candidates.