According to a 2021 survey by the Society for Human Resource Management (SHRM), the average cost of a bad hire can range from 30% to 500% of the employee's annual salary. The same survey found that organizations typically spend about 41 days on average to fill an open position. Therefore, making a bad hire not only increases direct costs such as recruitment, hiring, and training expenses, but it also leads to indirect costs such as reduced productivity, decreased morale, and lost revenue.
According to a 2021 report by Workforce Software, on average, recruiters spend 8.8 hours per week on administrative tasks, including reviewing unqualified applications, managing job postings, and scheduling interviews. Another study conducted by Ideal found that 52% of recruiters reported spending more than five hours per week on screening and reviewing resumes. The same study also found that 70% of recruiters believe that reviewing resumes is the most time-consuming part of their job.
While there is no precise figure on the total loss in the entire recruiting industry, the economic impact of bad hires and reviewing unqualified applications is significant. Employers can minimize these challenges by implementing effective recruiting strategies, using technology to automate repetitive tasks, and establishing a rigorous screening and selection process.
Sources:
Society for Human Resource Management (SHRM). (2021). The Cost of a Bad Hire. Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/the-cost-of-a-bad-hire.aspx
Workforce Software. (2021). The Recruiting Metrics that Matter in 2021. Retrieved from https://www.workforcesoftware.com/recruiting-metrics-that-matter/
Ideal. (2022). The State of Recruiting 2022. Retrieved from https://ideal.com/state-of-recruiting/