The organisations waste hundreds of thousands of pounds in hiring and retention that is not efficient, while they spend money on skills shortages with no return on investment. According to new data released by Omni RMS and CIPD (the professional body for HR and development), resourcing experts, Omni RMS is a resourcing expert.
Resourcing and Talent Planningreport, the latest edition, revealed that less than one-quarter of organisations (24%) measure the return on their hiring activities. Less than a third (31%), of those aware of turnover statistics at their organisation reported they calculated the cost of labor turnover.
Omni estimates that this can cost employers up to £100k per year. According to the company’s Recruitment Cost Calculator, which measures all costs of hiring and retaining employees for UK businesses, a company that hires 100 people annually could lose up to PS500k in hiring and replacement expenses per year (based on an average turnover rate of 34%* and salaries of PS35.500 for permanent staff).
The Report on Resourcing and Talent Planning also revealed that 32% private sector organisations expect to increase their recruitment budgets in this/next year, as skills shortages continue. This will only exacerbate the problem.
Louise Shaw is the Managing Director of Omni-RMS commented
It’s amazing that so few companies track the return on their investment in recruitment. Most organisations spend the most on people, so failing to monitor and track where inefficiencies have a negative impact on budgets can be a major problem. A wrong hire can cost more than just recruitment costs. The wrong hire can also affect the business’s performance and existing team morale, which could increase attrition. This puts further pressure on budgets in order to replace the lost talent.
It is crucial that organizations track the effectiveness their hiring activities. They need to know where inefficiencies are along the hiring process if they have high turnover. Many organisations do not have the necessary skills or technology to collect data beyond the standard ones, such as the time taken to hire. This is useless when there are a lot of revolving doors. Omni sees so many companies throwing money at the problem of skills shortages because they don’t know what to do. This is more harmful than helpful. “As we start to see signs of improvement in recruitment, companies must have a talent management strategy that enables them to optimize resources, make data driven decisions, and, more importantly, justifies their investment.”
Employers “wasting hundreds of millions” on inefficient hiring and retention practices appeared first on Human Resources News.
