The cost of a bad hire: 1 in 10 recruits are regarded as a ‘poor hiring decision’

• 70% of HR directors have taken on a new employee who did not meet expectations
• 91% of HR directors find it challenging to find skilled talent

London, 23 March, 2015 – One in 10 new recruits are regarded as a ‘poor hiring decision’ according to the latest report, Management Insights: How to avoid common hiring mistakes from leading recruitment specialists, Robert Half UK, with 70% of HR directors admitting that they have hired someone who did not meet expectations¹.

As companies turn their attention to growth and profitability, the implications of a bad hire can be far more costly than first realised.  More than half (52%) of HR directors said that loss of productivity is the biggest problem associated with making the wrong recruitment decision. Almost a third (30%) said that a poor hire reduces staff morale whilst one in five (17%) HR directors said that it has resulted in significant financial costs.  These can include the employee’s salary and lost performance; education and training costs to raise performance levels; impacted productivity of the employee, colleagues and management; potential loss of revenue and the ultimate cost to re-recruit for the role.

UK hiring managers were asked, “Which one of the following, in your opinion, is the single greatest impact of a bad hiring decision?” Their responses:           
                                             

Source: UK Survey of 200 hiring managers

Phil Sheridan, UK Managing Director at Robert Half, said: “In today’s business environment, competition for top talent is high and the job market is changing at a rapid pace.  It is therefore essential that every employee demonstrates measurable results towards a company’s growth and strategic goals.

"To minimise the risk of a bad hire, employers need to continuously evolve their recruiting processes, ensuring they have the right people and practices in place to identify and secure the most sought after candidates. Businesses should also ensure they work closely with the HR department and a specialised recruiter to establish a robust recruitment strategy. "

Further research from Robert Half found that the vast majority (91%) of HR directors find it challenging to identify and recruit skilled professionals. The prevailing war for talent is anticipated to increase substantially over the next 12 months due to an ongoing skills shortage in the market.  When identifying  the challenges in sourcing and recruiting talent, over a third (35%) of HR directors cited a lack of niche or technical experts, followed by general demand outweighing supply (30%) and a lack of commercial business skills (22%). Only 13% cited slowed hiring during the recession resulting in a lack of candidates with the right skills.

Robert Half offers the following recruiting dos and don’ts:

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Notes to editors

¹ The survey was developed by Robert Half UK and is conducted by an independent research firm.  The study is based on more than 200 interviews with senior HR executives from companies across the UK, with the results segmented by size, sector and geographic location.