Almost half of business leaders regret hiring their latest new recruits in a rush, as companies struggle to hire people with the right skills in a bid to boost growth in the wake of the pandemic, according to new research.
A significant 46% of senior decision makers say they have made a bad hire in the past 12 months, with small businesses affected the most, according to new research from recruitment consultancy Robert Half.
The temptation for business owners and recruiters to panic hire to plug skills gaps in their business has been growing over the past year as companies switch back into expansion mode.
This rush to recruit coupled with the so-called ‘great resignation’ has also pushed up salaries. A failed new hire will be costly for businesses at any time, but especially in the current environment as management look to tighten their belts amid escalating energy prices, rising inflation and a cost-of-living crisis.
More than half of business leaders in the survey said the pressure to pay new hires more than current employees added to the burden of poor recruitment decisions. Average starting salaries for professional services roles have increased by 4.9% in the last six months alone.
Three in five (61%) respondents to the survey said that settling for a candidate whose skills did not match the role requirements was the main issue in employing a bad hire, closely followed by rushing the hiring process (56%).
With the need for businesses to recoup losses and accelerate growth, seven in 10 (70%) businesses said that the impact of hiring an unsuitable candidate was worse than it was a year ago. Smaller companies reported greater challenges compared with larger organisations, with 82% reporting increasingly severe negative impacts.
Matt Weston, Senior Managing Director for the UK, Ireland, UAE and Benelux, Robert Half, said: “Bad hires tend to happen when businesses are unable to take the time required to plan a process, assess candidates and do their due diligence, which leads to rushed decisions and making the wrong compromises, especially in today’s tight market.”
Almost half of business leaders polled said that it was time to learn from past mistakes,
with 44% agreeing that better vetting was the most important step in improved recruitment. Identifying experience, knowledge and skills is vital to better hiring, but some leaders said that some compromise, such as hybrid or remote working, may be required.
Weston said: “With companies turning their attention to retaining talent and acquiring fresh skills to enable growth that can offset rising costs, making the right hiring decisions has never been more important and quite often bad hires can happen because the job description wasn’t right from the outset. With the widespread struggle for talent due to an ongoing skills shortage, headhunting could be a way to help reduce the risks involved with bringing a new employee on board.”