The Perfect Match28 Jun, 20173 minutes
The Cost of a Bad HireDue to the skills shortage mentioned in our last blog, hiring managers...
The Cost of a Bad Hire
Due to the skills shortage mentioned in our last blog, hiring managers in almost every sector are finding it difficult to fill their vacancies. When candidates are scarce, employers can make hasty hiring decisions that they later regret, with 85% of HR decision-makers admitting their business has made a bad hire. So what is the cost of a bad hire? A recent report for the Recruitment Employment Confederation (REC) has discovered that employers are underestimating the financial impact of getting recruitment wrong and are not seeking to improve their processes and practices, so that they make fewer hiring mistakes in the future.
33% of hiring managers 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 report explains how a bad hire will have a negative impact on much more than just a company’s finances; staff morale, a loss of productivity, and potentially a company’s reputation can all take a hit, which in turn translates to weakened performance.
So what should hiring managers do to avoid making a bad hire?
According to the REC, if employers are to successfully address the high level of bad hires (85 per cent) they must accept that hiring the right candidate for the job takes time, and must develop and execute soundly a comprehensive resourcing plan. If hiring needs are not properly defined, tested against, and adequately addressed, the proportion of those admitting to bad hires will hit a new record.
Action points from the report include:
- When defining the role employers should move beyond listing the scope and responsibilities of the job; define the required skills, knowledge, and personal qualities.
- Hiring managers should take their time over hiring decisions – most regretted decisions are a result of filling the position quickly. Look beyond the candidates’ skills and look for traits that match the company values and vision.
- When working with a recruitment agency, employers should make sure the briefs they provide recruiters are detailed and clearly state their needs; helping recruiters to understand company goals, values, and vision.
- When working closely and collaboratively with a recruitment partner use different recruitment platforms and assess and reach candidates of diverse backgrounds.
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