How much hiring the wrong person is costing your business
When it comes to hiring new employees, getting it right first time is particularly important. The cost of a bad employee is likely to largely overshadow their value to the organisation, not to mention the amount of time and energy wasted during the recruitment and on boarding process. A bad employee can result in a range of costs, both direct and indirect, short and long term and can be a much underestimated threat and cost to your organisation.
A new 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 impact it is having on the company.
Over a third (33%) have overlooked the financial impact believing 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’s even possible that a bad hire’s impact on morale and productivity could rank ahead of monetary losses.
REC has created a report to promote good practice recruitment to UK business in all sectors.
The report found that 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.”
Adam Rich, Recruitment Consultant at Bond Williams Professional Recruitment adds it is not just about hiring the right candidate for the role but also ensuring that successful candidates become long-term members of staff through a robust on boarding strategy:
“In essence, retention of staff for many companies is a key focus, by ensuring both the hiring and on boarding process is robust you will further increase both retention and reduce costs per hire. Turnover is expensive so it is vitally important to protect your people investment with a thorough recruitment strategy, seamless on boarding process, employee engagement plan and a comprehensive appraisal and ongoing leadership programme. Two way inclusive communication will go a long way to embedding employees within the business and reduce the chances of further turnover”.
With over 150 years of combined recruitment experience in the Hampshire and Dorset marketplace Bond Williams are on hand should you need additional support in sourcing Accounting, IT, Office support or HR staff for your business? Reward please do not hesitate to contact Adam for further advice and guidance regarding HR, L& D, recruitment or reward. 01202 233777