The worsening skills shortage is triggering poor hiring decisions by employers, with nearly half of business leaders saying they have made a bad hire in the past 12 months.

Research by recruitment specialist Robert Half found that 61% of employers have settled for a candidate that did not sufficiently match the job role, ultimately hindering growth and incurring additional costs to businesses.

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Meanwhile, 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.

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Economic resurgence following COVID-19 and businesses' appetite for growth has increased recruitment demand, particularly for technology professionals.

Robert Half's research, which combined data concerning 200 roles as well as a survey amongst 300 C-suite leaders, found that the pressurized hiring market was prompting urgency amongst recruiters that resulted in companies bringing the wrong people on board.

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%).

Seven in 10 businesses reported that the impact of making a bad hire is worse than it was 12 months ago. Small and medium-sized businesses feel the pain more deeply than larger organizations, with 82% reporting "severe negative impacts".

Businesses that made a bad hire in the past 12 months that resulted in the candidate and client parting ways faced the prospect of paying even more for their next hire, Robert Half found. Average starting salaries for professional services roles have increased by 4.9% in the last six months alone, and more than half (53%) of business leaders are having to pay new hires more than current employees.

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The time and expense needed to recruit and onboard a new employee can feel like wasted time and effort when it doesn't work out and brings "serious implications" for the business, said Matt Weston, Robert Half senior managing director for UK&I, UAE and BeNeLux.

Weston said bad hires typically happened when businesses are unable to take the time needed to properly assess candidates and do their due diligence, leading to "rushed decisions and making the wrong compromises" -which carries even more significance in today's tight talent market.

"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," Weston added.

This additional cost is, at least, prompting business leaders to learn from their mistakes: 44% agreed that better vetting was the most important step for avoiding a bad hire, while (42%) agreed that the ability to identify the experience, knowledge and skills should not be compromised -even if this means "compromising" on hybrid or remote-working arrangements.

CXO

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