Poor hiring decisions generate losses of up to £15,000 for UK businesses, as two thirds (66.1 per cent) of recruitment professionals admit to losing a significant amount of money on hires that haven’t worked out. This is according to the latest research from CV-Library.
The study, which explores the attitudes of 200 in-house and agency recruiters across the UK, also finds that 19.5 per cent of recruitment professionals have lost out on between £15,000 and £30,000 for their business, while 14.4 per cent admit to losses of over £30,000.
Three quarters (78 per cent) of recruiters estimate that it costs their business up to £10,000 to hire a new recruit. More than half (55.3 per cent) believe that vetting candidates properly before they hire them would ensure poor recruitment doesn’t cost their business.
A further 21.3 per cent believe that keeping recruitment costs down by using tools like job boards and social media could help.
Lee Biggins, founder and managing director of CV-Library, comments, ‘To see in black and white just how much money bad recruitment is costing businesses is quite concerning. Today’s labour market is candidate led, and increased competition can often mean that businesses are rushing to snap up new hires, often missing out key stages of the vetting process in a bid to stay ahead of the competition.’
Another key issue is that many businesses are failing to keep up with the latest candidate trends, which is placing them in a compromising position when it comes to finding the best recruits.
In fact, 52.1 per cent say they don’t bother keeping on top of these trends, despite 68.1 per cent who believe that it is beneficial to do so. A further 59.7 per cent say these trends do not influence their recruitment strategy.
Biggins continues, ‘Over the past couple of years, we’ve seen some of the top companies in the UK adapt their hiring processes because they’re on top of the latest trends. For example, Deloitte have taken a university blind approach to the screening process, while KMPG shortened its recruitment process to accommodate future working generations.
‘It’s these moves that will really set businesses apart from the competition in the future, and ultimately attract the best candidates in the long run, because they understand how candidates want to be approached and assessed.’
Recruitment professionals do understand the need to implement a strong recruitment strategy, respondents believe that workers can be affected by poor hires. In fact, respondents cite high staff turnover (44.4 per cent) and decreased productivity (16 per cent) as some of the biggest risks, followed by financial loss (22.2 per cent), low morale (8.3 per cent) and poor employer branding (6.9 per cent).
Biggins concludes, ‘Many businesses fail at the first hurdle because they don’t recognise how important it is to invest in a strong recruitment strategy. Poor hiring decisions can have a detrimental effect on your business outputs, but also, the morale and productivity of staff.
‘Understanding that certain hires can make or break your business is key and these mistakes can quickly be avoided if you are investing in the right tools to help you vet candidates, hire efficiently, and successfully onboard new starters.’