Provided by: RS Risk Solutions LTD
SMEs Recruit Three unsuitable Hires Each Year
New research from a survey conducted by global hiring platform Indeed has found that small businesses hire an average of three mismatched employees yearly. Specifically, one-third of candidates who made it to interviews were considered unsuitable for the role, and annually, 74% of small and medium-sized enterprises (SMEs) (companies with up to 49 employees) hired three candidates who didn’t work out. Worse still, according to Indeed, 1 in 10 SMEs hired more than five unsuitable candidates yearly.
Although “bad hires” occur in all types and sizes or organisations, their effect may be felt more keenly by smaller companies with fewer resources to absorb recruitment losses. Besides, according to Oxford Economics and Unum, hiring a new employee costs £30,165 on average. Such costs can be recouped when employees progress as anticipated. In contrast, mismatched employees – failing to perform or leaving shortly after recruitment – could leave SMEs with substantial out-of-pocket costs.
Reasons for Mismatched employees
The most common reason cited (50% of those surveyed) for hiring unsuitable employees was a lack of soft skills. This statistic may point to a growing desire for candidates with suitable social and communication credentials, a trend that could persist with artificial intelligences (AI) growth. Specifically, AI tools could replicate a wide range or technical skills in the future, making soft skills increasingly important for talent acquisition strategies.
Other reasons cited for mismatched employees included:
• Lack of technical skills (45%)
• Salary expectations (37%)
• Expectations of the role (37%)
• Visa requirements (36%)
• Lack of flexible working options (35%)
Overall, Indeed’s research points to a systemic issue with hiring practices. In fact, 38% of candidates dropped late in the process were rejected for technical reasons-such as right-to-work issues- that could have been identified earlier in the proceedings. Additionally, more than half (55%) of all employers agreed that hiring was inefficient, with 68% saying it takes to long and 67% saying they receive too may irrelevant candidates.
Conclusion
In light of Indeed’s research, its critical for all organisations-Particularly SMEs_ to consider ways to reduce their numbers of mismatched hires and streamline recruitment processes, not least because the costs associated with poor hires are significant-including hefty re-hire fees and productivity losses.
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