Right now, employers in the Engineering and Technology sector are finding it increasingly difficult to attract people to the jobs available. The UK’s unemployment rate is the lowest since the 1970s, meaning demand for staff is increasing as the talent pool shrinks, not helped by the post Covid great resignation.
When candidates are scarce, there is a temptation to make hasty hiring decisions. While speed is important in a modern hiring process, if it leads to poor hiring decisions it can be very costly.
Often employers are completely underestimating the financial impact of getting recruitment wrong and are not seeking to improve their processes and practices, so that they make fewer mistakes and get it right more often.
Having worked in the sector for over 20 years we have detailed data that shows how bad hires are not isolated incidents but frequent occurrences. On average companies have a retention rate of 80% in the first 12 months.
If employers fully understood the costs of a bad hire they would understand that this level of retention is having a material impact on their business. Failing to measure its damaging impact means they don’t learn how to avoid it next time. This behaviour is putting the success of UK businesses at risk.
The potential costs of a bad hire can encompass more than the time and money spent on repeating the recruitment process. A bad hire will have a negative impact on staff morale, a loss of productivity and potentially even an impact on your reputation and brand. All this translates to weakened performance. In fact, we calculate that for a mid-level engineer, the cost of a bad hire can be over three times their salary.
It is essential that you develop a process that will ensure you get it right more often. You need to start with a clear idea of what success looks like for your business. Creating a robust selection process will help you source candidates in an increasingly competitive market.
With the right processes and procedures in place the first-year retention can be increased to as high as 96%, saving your business hundreds of thousands of pounds per annum, and making talent attraction more effective.
It is now more important than ever for employers to attract and retain the right people and ensure good practice remains a priority as they compete for talent and search for the perfect match for every job.
If you would like to understand better the true cost of bad hires to your business, try our bad hire calculator HERE.
Also happy to share the simple steps you can take to prevent them happening, please feel free to book a call with me today.