The skills shortage and bad hires: how can employers mitigate this?

Over half of businesses (61%) admit settling for candidates that did not sufficiently match the job role, while 56 percent rushed the hiring process.

The new research from specialist talent solutions consultancy Robert Half also shows that 46% of senior decision makers believe they have made a bad hire in the past 12 months, with small businesses more likely to feel the impact.

Also, more than half (53%) of business leaders feel pressure to pay new hires more than current employees, adding to the burden of making a bad hire.

“Bad hires tend to happen when businesses are unable to take the time required to plan a process, assess candidates and do their due diligence, which leads to rushed decisions and making the wrong compromises, especially in today’s tight market,” says Senior Managing Director for the UK, Ireland, UAE and BeNeLux, Matt Weston.

Recruitment demand

 Economic resurgence and appetite for growth over the past 12 months has increased recruitment demand, leading to a talent shortage that triggered poor hiring decisions.

Three in five (61%) respondents felt that settling for a candidate whose skills did not match the role requirements was the main component in employing a bad hire, closely followed by rushing the hiring process (56%).

Mistakes like these will always be frustrating, but with urgency from businesses to recover losses and accelerate growth strategies, seven in 10 (70%) of businesses agree that the impact of making a bad hire is worse than it was 12 months ago.

SMEs feel the pain more deeply than larger organisations, with 82 percent reporting increasingly severe negative impacts.

What are the implications of a bad hire?

Businesses that made a bad hire in the last 12 months that ultimately ended in the candidate and client parting ways will already have invested vital resources and now face the prospect of paying more for their next hire.

“Every company, regardless of its size, industry or sector, depends on its employees to achieve its objectives, which means maintaining a productive workforce and hiring skilled talent that adds value to the team. With this in mind, making a bad hire can have serious implications, as the time and expense taken to recruit and onboard a new employee can feel like wasted time and effort when it doesn’t work out,” says Mr Weston.

Average starting salaries for professional services roles have increased by 4.9 percent in the last six months alone, and more than half (53%) of business leaders are having to pay new hires more than current employees.

Bearing in mind the additional cost, business leaders are keen to learn from past mistakes, with 44% agreeing that better vetting is the most important step for avoiding a bad hire. In a busy market where businesses may not be able to find all that they seek, identifying experience, knowledge and skills that cannot be compromised is also crucial (42%), although some compromise, for example on hybrid or remote working arrangements, may still be required.

What does this mean for HR?

“With companies turning their attention to retaining talent and acquiring fresh skills to enable growth that can offset rising costs, making the right hiring decisions has never been more important and quite often bad hires can happen because the job description wasn’t right from the outset. With the widespread struggle for talent due to an ongoing skills shortage, headhunting could be a way to help reduce the risks involved with bringing a new employee onboard,” adds Mr Weston.