Small employers losing money from bad hires

Small employers are losing money because they hire three unsuitable staff every year, but spot ‘bad apples’ quicker, according to Indeed.
May 25, 2023

The job site found that 74% of companies with up to 49 employees admitted to hiring three candidates annually who didn’t work out, with inadequate soft skills the biggest cause of mismatch.

Around half of those who hired unsuitable candidates said soft skills were an issue, while 45% said the new recruits lacked role-specific skills. On average, one-third of candidates who made it to interview were considered unsuitable for the role.

One in 10 small companies surveyed by Indeed said they hired more than five unsuitable candidates a year.

Other common reasons for jobs not working out were salary expectations (37%), visa requirements (36%) and lack of hybrid working options (35%).

However, despite suffering regular role mismatches, small businesses spot them a third quicker than larger companies, according to Indeed. The average small business took 12 days to realise a new employee was not working out, compared to 18 days for companies with more than 250 staff.

Two-thirds of companies said mismatched candidates got too far in the process, meaning that around a third who progressed to the interview stage ended up being unsuitable for the role.

Many blamed inefficiencies in the hiring process, such as receiving too many irrelevant applications (67%) or the recruitment process taking too long (68%).

Issues that could have been spotted earlier – such as the candidate’s right to work – were often at fault.

In the US, Indeed offers a ‘pay for results’ model where companies only pay for their service when a qualified applicant begins an application, and it is now introducing it to the UK. It claims this leads to 35% fewer applications to review per hire.

Raj Mukherjee, EVP and general manager at Indeed, said hiring mismatches could send small businesses “reeling backwards”.

“The cost of making the wrong hire can be measured in hours lost and financial loss from open roles, neither of which any business can afford,” he said.

“The problem is that the hiring process is too complex, deeply inefficient and simply too slow and we know the frustration this causes employers and jobseekers.

“Recruitment is fundamentally human centric and by improving matching we can help fast forward to meaningful interactions between people, which is when the real magic happens.”

Original Article: Personnel Today

For all your recruitment challenges – contact our HR & digital recruitment specialist Gareth Allison on 02920 620702

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