Small firms waste thousands on ropey recruits

The vast majority of companies are still choosing the wrong candidates - and spending a fortune doing it, a survey suggests.

by Michael Northcott
Last Updated: 27 May 2011
Employers are suffering as a result of hiring hopeless candidates through the usual channels, according to the study, by talent management company SHL. Of the companies surveyed, a whopping 88% said they have regretted hiring someone in the last 12 months; 47% said their regrettable recruit turned out to lack the appropriate skills, while 35% said they had failed to perform to the requisite standard. Given the cost of the recruitment process (particularly where recruitment agencies are involved)– and the additional cost of attempting to train someone who isn’t up to the job – that adds up to an expensive problem. And expensive problems are not what UK plc needs just at the moment…

The good news for recruitment agencies is that this doesn’t seem to have put employers off using their services. 62% of employers plan to use one at some point this year: evidently paying those fat commission fees is seen as a better option than wasting valuable time interviewing people who are dribbling onto their own CV. Almost half said they would accept a charge of up to £4,000 per hire, equal to around 15% of the average UK salary of £25,900.

And the survey also contained some cause for general optimism – because hiring is still on the increase, despite these numerous instances of disappointment. In fact, two thirds of small businesses will be looking to recruit someone in the next twelve months – although given the current financial climate, and all the belt-tightening that requires, they’ll be hoping to recruit fewer duds this year.

The findings of the survey are very convenient for SHL, obviously which is trying to plug its online objective assessment tools – it argues that if employers leave the initial candidate-sifting to the cold indifference of a computer program, they can weed out unsuitable candidates without the need for an interview. These tools are often considered to be the preserve of larger corporations, but SHL insists that even smaller enterprises of fewer than 250 employees should be making more use of them too. And if the companies concerned save a few quid by eradicating the bad decisions which land lousy recruits, that may be true.

Of course, recruitment failures on this scale won’t just be solved by better assessment tools; if a recruit turns out to be lacking in the correct skills, that’s clearly an interviewing problem, while if they fail to perform to the expected standard, that may well be a management problem. But anything that helps make managers’ lives easier – and the recruitment process cheaper – clearly has a lot going for it.

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