Recruiting Enablement Blog



Fast Stats On Major Recruitment Challenges

Charles Hipps October 10, 2019

In my last post, I shared how there is an increasing need for businesses to become more superhuman and take advantage of new technologies to see the unseen. I wanted to expand on this some more and share more of the insights from our employer survey that showcase why companies must turn to tech in bid to tame the talent lion…

1. Recruiters are struggling with staff churn

  • 47% expect to lose over a tenth of their workforce in any given year
  • On average, businesses lose 14% of staff within a typical 12 month period
  • For some it is more significant - 13% expect to lose 30% or more of employees per annum
  • Just 3% of recruiters predict they will lose no staff members in a typical year
  • Indeed 31% of HR heads expect an employee to remain in their role for 18 months or less, with 16% suggesting it is more likely to be less than one year.

Even when companies think they’ve replaced a leaver – few get it right first time.

  • 14% of new hires leave within 30 days of starting a new role. A further 13% will likely leave within three months and 12% within six months - therefore nearly two fifths of new employees leave their new job within just half a year of starting it.

In essence companies are struggling to identify people who are not only suited for the role but are likely to stay with the company for any useful length of time.

2. Recruiting to replace these people is fraught with problems such as reneging…

  • Reneging - 94% of those studied face reneging
  • For them it typically happens 15% of the time
  • 6% suggest that it happens for 40% or more of their hires – makes scale of the problem clear to see.
  • 79% feel that reneging is as bad, if not worse, now, when compared to five years ago

3. Even if someone has been found for a role and accepts it – there’s a considerable delay until they start delivering…

  • Getting Up to Speed - 71% feel that it will take a new starter three months or more to be fully up to speed and producing the same level of work as the person they are replacing
  • 14% say it takes between 9 months to a year - having staff underperforming or learning on the job for such a significant period of time will inevitably have an impact on colleagues, and the bottom line.

4. Indeed some never do live up to their promise…

  • Poor Performance - Almost half believe new employees live up to expectations less than 20% of the time.
  • 71% feel that it takes three months or more for an employee to get up to speed – then it might be some time before a company realises that a team member is not the right fit and isn’t going to be right for the role.
  • This illustrates how crucial it is that the right hire is made in the first instance, ensuring budget and time are not wasted in hiring the wrong candidate.

 5. All this puts a considerable cost burden on businesses…

  • 54% of those studied revealed that 5% or more of their company’s turnover is spent on recruitment
  • 6% spend more than 10% on it
  • When the respondents were asked how much it costs to recruit an employee for a typical £25,000 per annum role - allowing for recruitment costs, training and onboarding costs, loss of productivity and the HR team’s time - 5% felt it was as much as £40,000
  • A further 29% suggested that is certainly over £10,000.

6. And much of this spend is wasted…

  • According to the data, the average cost per hire is £9,183, so an SME employing 250 people that is losing 14% of its staff each year, only to see 39% of new employees leave within six months, is wasting £125,347 on failed recruitment per annum.

Against this backdrop HR teams are battling with a myriad of other challenges which are also impacting on their ability to find the right talent…

  • Complex processes – involving 80+ steps - for each and every hire
  • Fierce Competition - 72% felt that the battle for the best candidates is greater, or at least the same, as it was three years ago
  • Nearly half (47%) felt that the competition for the best applicants was fiercer than it has ever been.
  • Makes the issue of reneging even more problematic - not only fighting to find top talent, but because they are ‘wasting’ time on the wrong candidate.
  • Speed to Hire - 36% say speed to hire is key measure upon which their team is judged. As a result, 23% are trying to get faster at hiring – but this could be impacting on the quality of hires
  • 53% are concerned that the pressure to get quicker at hiring people means they risk missing out on the best candidates.
  • Diversity Challenges - Diversity and eliminating bias is still an issue for one in five (19%)
  • 48% are actively looking to improve the ethnic diversity of their employees
  • 36% hope to increase gender diversity
  • 33% want a more diverse workforce in terms of education and background.

  Tech is the Answer… (it's not just us saying this for the sake of it!)

  • Two fifths of the HR heads interviewed felt that more than 30% of their recruitment process is already based on data.
  • Delving further into the statistics shows that 17% have 50% or more of their hiring process being data driven.

And further automation is set to help them further

  • 41% said automated decision-making would speed up their time to hire
  • One third felt it would make the decision process more consistent
  • 31% think that it would reduce the manual aspect to their roles
  • Eliminating errors (30%), freeing up time to spend on good candidates (28%) and reducing bias (28%).
  • AI - 39% predicted that AI will most benefit them over next five years in terms of reducing the risk of missing out on ‘hidden gems’ of talent,
  • Helping remove bias from the decision making process (28%), predicting the likelihood of an applicant accepting a role (23%), identifying potential inconsistencies among internal recruiters (22%) and predicting whether an applicant will perform well in a role (20%) were all selected.
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