UK firms paying the price for hiring mistakes

UK businesses are failing to recruit the right person for two out of five roles despite the significant financial costs of making hiring mistakes.

That’s according to a new report from the Recruitment & Employment Confederation (REC) entitled Perfect match: Making the right hire and the cost of getting it wrong, which reveals that some 85% of HR decision-makers admit their organisation has made a bad hire, while a third (33%) mistakenly believe that these mistakes cost their business nothing.

However, a poor hire at mid-manager level with a salary of £42,000 can cost a business more than £132,000, and the hidden costs involved in bad recruitment include money wasted on training, lost productivity, and increased staff turnover. Some four in ten employers (39%) admit that the interviewing and assessment skills of their staff should be improved.

REC Chief Executive, Kevin Green, 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 research enables recruiters to explain to their clients why getting recruitment right is so important, and provides a cost/benefit analysis of why it makes sense to use a professional recruitment expert to minimise risk and improve business performance.”

Perfect match: Making the right hire and the cost of getting it wrong has been produced by the REC in partnership with Indeed as part of the Good Recruitment Campaign, an initiative to promote good practice recruitment to UK business in all sectors.

Bill Richards, UK Managing Director, Indeed, added: “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.”