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NEWS RELEASE - 'Hiring the Wrong People is Draining Business'
Companies worldwide are significantly damaging their bottom line through poor recruitment policies, according to new research from SHL. Release Date: 19 Jan 04
The global survey of HR professionals reveals that the average firm spends upwards of AUD$4,500 per head on hiring, yet one in five businesses claim that half the people they recruit don’t work out in the long term. As a result, companies are wasting millions every year through poor recruitment decisions.
Large recruiters in both public and private sectors take on thousands of new staff every year and the costs quickly mount up. For example, based on these findings the cost of hiring 1000 new staff at AUD$4,500 per head is AUD$4,500,000.
The research shows that a further 30 per cent of businesses state that a fifth of all new recruits aren’t up to the job. Having the wrong people in the wrong job means poor productivity, lost opportunity and directly hits the bottom line - even before the cost of recruiting replacements is considered.
SHL’s research also reveals that the majority of companies surveyed (63 percent) recruit less than 10 per cent of the candidates that apply for job vacancies. Not only does this create a lengthy sifting process for HR and line managers but it represents a further drain on resources through extended candidate attraction and screening processes.
John Bateson, CEO, SHL Group plc said: “In a climate where cost savings have dominated the business agenda for a number of years, it’s interesting to see that companies worldwide are pouring money away through their recruitment policies. Businesses need to re-evaluate the methods they are using to make decisions about candidates. In an increasingly performance driven economy, talent is critical to the success of the organisation. Objective assessment methods, such as ability testing or personality questionnaires can not only help businesses to efficiently shortlist the most suitable candidates, but can also help to validate decisions made in the interview stage.”
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