Thirty percent of hospitality employers have a cost-per-hire of more than $1,000.
As hospitality companies prepare their recruitment plans for 2011, avoiding bad hires will be a priority. With unemployment hovering around 9.5 percent, the job market is flooded with qualified candidates.
Yet even with all the top talent available, time pressures, strained resources and a lack of insight into target talent have been a challenge to employers to find the right people for their open positions.
Eight-in-ten hospitality companies report that a bad hire has adversely affected their business in the last year. Poor hires can be costly too, as one-in-ten (10 percent) of hospitality organizations said that one bad hire cost their business more than $50,000 in the last year.
Nearly one-in-five (18 percent) said that one bad hire cost them more than $25,000. The nationwide survey was conducted among more than 100 hospitality employers between August 17 and September 2, 2010.
When asked how a poor hire affected their business in the last year, employers reported the following:
- Lost time to recruit and train another worker – 52 percent
- Less productivity – 48 percent
- Lost money to recruit and train another worker – 47 percen
- Had a negative effect on employee morale – 43 percent
- Had a negative effect on client relations – 28 percent
- Fewer sales – 18 percent
- Legal issues – 12 percent
"Among other things, hiring the wrong talent for a position can have a significant effect on a hospitality organization's bottom line," said Jamie Womack, vice president of corporate marketing for CareerBuilder. "To help proactively prevent bad hires, and their impact on the business, employers are exploring new ways to leverage target talent data and research in their hiring process."
Of employers who made a bad hire, 54 percent, the highest among industries surveyed, said they think they made a mistake hiring someone because they needed to fill the job quickly. This was followed by lack of understanding of where their target talent is (30 percent), not checking references (19%) and unsuccessful sourcing techniques (10 percent).
Understanding who target talent is and how they will fit into an organization is increasingly important as hiring costs increase. Thirty percent of hospitality employers have an average cost per hire of more than $1,000, up sharply from 9 percent in 2008.
Survey Methodology
This survey was conducted online within the U.S. by Harris Interactive© on behalf of CareerBuilder.com among 106 U.S. hospitality hiring managers (employed full-time; not self-employed; non government); ages 18 and over between August 17 and September 2, 2010 (percentages for some questions are based on a subset of U.S. employers , based on their responses to certain questions). With a pure probability sample of 106 one could say with a 95 percent probability that the overall results have a sampling error of +/- 9.52 percentage points. Sampling error for data from sub-samples is higher and varies.
About CareerBuilder®
CareerBuilder is the global leader in human capital solutions, helping companies target and attract their most important asset - their people. Its online career site, CareerBuilder.com®, is the largest in the United States with more than 23 million unique visitors, 1 million jobs and 32 million resumes. 
