UK IT companies are exacerbating the industry-wide skills shortage themselves through unmanaged recruitment practices, according to a report published last week.
The study, from management consultancy Elgin Scott, revealed that although IT has revolutionised UK commercial life and driven change across all sectors of the economy, the industry is still in the dark ages when it comes to recruitment and bringing people into the business.
Despite dire staff and skills shortages, the same time-consuming and costly recruitment methods as 30 years ago are still being used - conducted by house managers and supported by a wide range of agencies and headhunters.
Kay McGregor, consultant at Elgin Scott, said: "IT businesses are jeopardising their own growth by failing to plan and budget adequately for recruitment. They are cutting their profits by wasting valuable management time and overspending on the recruitment process."
She added: "Worryingly, businesses are also undermining their own success by employing unsuitable candidates. IT firms tend to regard recruitment more as a cost than an investment, yet there are real bottom line benefits to investing against a recruitment plan."
The research, which was based on interviews with managing directors and other senior management in 200 of the UK's fastest growing IT companies, revealed that unplanned recruitment can cost organisations in excess of half a million pounds annually in lost profits.
One in eight managers, unlike the human resources department, spend 20 hours or more recruiting each employee, and larger firms spend more than 143 managerial working days per year in recruitment activities.
Some 62% of IT firms do not incorporate recruitment into their financial business plans, 55% of managers have no idea how much it costs to recruit someone, and 24% of managers admitted to having appointed poor candidates.
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