Talent shortages and a competitive employment market are taking their toll as bad hiring decisions leave under-resourced businesses at a loss.
According to new research released this month by Hudson, 44 per cent of new hires are considered "not good", demonstrating the need for businesses to improve their recruitment processes.
The research, which forms part of the Hudson 20:20 Series white paper Next Generation Recruitment: Battle Strategies for the Talent War, revealed how businesses make the wrong hiring decisions while operating under the multiple pressures of time and cost constraints. In particular, the research revealed the failure of employers to adapt to a market defined by low unemployment and a mobile workforce.
"The current employment landscape is complex and there is increasing pressure on organisations to both find the right people to fill particular roles and improve the overall quality of new hires," says Mark Steyn, chief executive officer, Hudson Australia/New Zealand. "It's particularly tough to source the right people at the senior end of the market."
According to Steyn, the cost of a bad hire can be enormous - not just to productivity but also to employee engagement, staff morale, as well as wasted resources and investment through the recruitment process.
"Organisations are clearly feeling the effects of skills shortages with over half (53 per cent) of all organisations saying they are very or somewhat under-resourced and 92 per cent saying that shortages are placing increasing amounts of pressure on existing staff and their businesses," says Steyn.
Adding to these shortages, according to Steyn, is a "restless and mobile workforce". "People are now increasingly confident they can move, with six in 10 employees seeking a new job and over 80 per cent saying they plan to leave their current role within the next two years. These figures are incredibly high and potentially, employers could begin to lose talent faster than they can hire."
In response to these pressures and to improve the quality of new hires, employers must change their hiring processes.
"Evaluating a potential employees' attitudinal, motivational and cultural fit with an organisation pays significant dividends in the longer term," says Steyn. "Our research shows that when formal procedures are used to measure motivation or cultural fit, 91 per cent of hires were regarded as excellent or good."