Poor recruitment practices cost small businesses £69m

Hiring the wrong staff is costing UK small and medium businesses £69m every year, new research has revealed.

Every year small and medium firms invest around £300m a year in hiring 250,000 new employees. However, making the wrong choice is costing them dearly.  Research from Jobsite.co.uk reveals that 22% of new starters leave within six months.

As a result, many companies are facing additional recruitment costs of around £1,200 a time to find a replacement.

The cost of losing staff is not only financial. Research shows that losing just one or two employees in a year can cause a major disruption with more than 70% of bosses believing employee departures have a negative effect on business performance (in some sectors this is as high as 81%).

Yet, small firms are doing little to help their cause. Despite increasing popularity of online job recruitment tools among candidates, smaller firms are largely yet to catch on with just a quarter using online job boards. By relying on word of mouth referrals and agencies, small firms are not recruiting in large enough volumes to be able to validate and benchmark their decision making processes.  They also tend  to not use best practice selection methods such as psychometric tests and competency based interviews. 

"Gut feel" recruitment is resulting in hiring the wrong people which can be seriously detrimental to the productivity – and even the future – of small and medium companies, particularly in the current economic climate.

Recrion is a People Management Specialist that advises on robust selection strategies in order to minimise risk, improve processes and reduce the costs of recruitment.  Visit www.recrion.co.uk or call +1780 484910 for more information.