UK businesses are failing to hire the right candidate for two out of five roles, despite the financial costs of getting it wrong, a new report from the Recruitment & Employment Confederation (REC) has found.
The report found that over eight in 10 (85%) of HR decision-makers admit their organisation has made a bad hire, and four in ten (39%) employers admit that their interviewing and assessment skills for candidates needs improving.
One-third (33%) believe that hiring mistakes cost their business nothing, when in fact, a poor hire at mid-manager level with a salary of £42,000 can cost a business more than £132,000.
The accumulative costs involved in bad recruitment include money wasted on training, lost productivity, and increased staff turnover.
REC Chief Executive, and Member of Recruitment Grapevine’s Advisory Board, 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.”
Bill Richards, UK Managing Director, Indeed, adds: “Hiring is one of the most important aspects of business growth, but one of the most costly if done wrong. In today’s tight labour market there is a full-blown battle for talent, and employers need help navigating the terrain.
“The good news is that when it comes to connecting candidates to open positions, search engines like Indeed have emerged as a powerful tool for employers. Our mission is to help people find the right job, and the insights raised in this report will help hirers source and retain candidates to meet their business needs.”