Addressing High Attrition Rates: A Data-Driven Approach to Mitigate Unsuccessful Hires

The concerning trend of employees leaving their jobs within the first year of employment in the UK has attracted considerable attention. According to major institutions like NOS, Deloitte, and PWC, this attrition rate is now exceeding 25% and approaching 30%, incurring an average cost of over £50,000 per unsuccessful hire. In fact, the national average failure rate translates to a staggering cost of more than £12 billion to UK PLC.

Neil Carberry, CEO at the REC, the governing body for the recruitment industry, has identified this issue as the foremost challenge in UK recruitment. Sectors such as logistics, care, retail, and hospitality are experiencing particularly high failure rates, reaching around 40%. However, this problem is not limited to these sectors alone and is considered an industry-wide challenge.

For small and medium-sized businesses (SMBs), the impact of a poor hire is even more devastating, considering the comprehensive costs, including time, salary, revenues, and disruption during the employee's tenure.

Why is this happening? The post-Covid backlog of unfilled vacancies, coupled with the departure of over .7 million European counterparts post-Brexit, and over 1 million people taking early retirement, has created a company-centric environment. A cultural shift in job seeking further complicates matters, influencing outcomes in the marketplace.

While recruitment automation has streamlined processes, reducing timelines for candidate offers, it raises concerns about the quality of hires. For instance, Amazon's automated recruitment process takes less than two hours from application to offer, but it does not address the root causes of high attrition.

Delving into research by institutions like Deloitte, PwC, and KPMG in 2018 and 2019 reveals that over 80% of individuals leaving jobs within the first year attribute their decision to culture, behaviour, or misalignment with their desired work. Less than 10% leave due to an inability to perform the job.

The predominant approach in hiring is aligning skills and experience with a gut feeling, overlooking cultural and behavioural aspects. Utilising Artificial Intelligence (AI) and automation technology in assessing skills and experience is commonplace but falls short in evaluating cultural fit, the underlying driver behind first-year departures.

Traditional psychometric assessments have been costly and complex, requiring training and interpretation skills.

However, behavioural assessment tools are simpler, more cost-effective, and focused on cultural and behavioural alignments, often surpassing traditional psychometric assessments. They focus on both positive alignment to the critical characteristics as well as identifying areas of conflict, which tend to be behind the majority of candidates leaving a job in the first year of employment.

A more effective methodology for assessing candidates better, and that statistically reduces first-year leaver numbers, involves creating a cultural and behavioural benchmark and involving both the hiring manager and top performers in the benchmarking process. The benchmark then guides additional screening tasks, including competency-based assessments and video profiling, aligning with identified traits and characteristics.

Calibre has been successfully deploying this methodology for several years, reporting a 96% retention after 12 months across various roles within the Automotive Industry Sector on senior and high priority roles. The methodology standardises the evaluation process, providing a rational and logical solution to identify both positive correlations and potential areas of conflict that influence the attrition problem.

Implementing such a methodology requires the right tools and professional support, but the positive outcomes, including increased productivity, a happier workplace and increased employee longeavity, make it a worthwhile investment.

Calibre CEO and founder, Sabina Hegarty, says, “supporting businesses in minimising attrition caused by bad hiring decisions is our number one priority, and the evidence points to better cultural and behavioural screening as a crucial factor in making more informed hiring decisions. We are so confident in the results that we have generated already, when the correct assessment processes are applied, that we are reflecting this in our no quibble 12-month free replacement policy”.

To find out more about how Calibre can help improve your hiring and retention, book a 30-minute discovery call with us today.