The Impact Of ‘Bad Hires’ On Industrial Productivity, Profitability

Decreased productivity, poor work quality, and an increase in safety incidents are some of the costly consequences of hiring the wrong people for entry-level roles in the industrial sector, reveals new research from Talogy. The study, “Quality hires, quality output: Smart talent strategies for industrial hiring,” investigated the challenges of hiring employees with the right mix of both technical and transferable skills to fulfill entry-level roles. Talogy surveyed 855 industrial hiring professionals in sectors such as manufacturing, construction, logistics, distribution, transportation, energy, warehousing, utilities, automotive, and engineering.

With a skills shortage impacting many of these industries, the report found that a majority of hirers (73%) felt under pressure to hire quickly, but were seeing the consequences of rushed recruitment decisions. More than half (51%) of respondents reported increased costs due to rehiring or training, particularly where transferable skills were lacking, while nearly two thirds (63%) saw decreased productivity and 56% reported poor work quality. Most concerningly, one in five (21%) said their organization had experienced an increase in safety incidents as a result of a poor hire.

As a result, 85% of survey respondents believe that hiring for quality and skill readiness is becoming increasingly critical, particularly with advancements in technology impacting multiple industrial sectors.

“In the industrial labor market, competition for entry-level talent remains high, and finding the right people to fulfill frontline roles is increasingly challenging,” commented Trevor McGlochlin, Managing R&D Consultant at Talogy. “It is therefore not surprising that many employers rush to make quick hiring decisions, without potentially going through the right process.”

“However, this research reveals that prioritizing speed of hire over quality can be hugely detrimental,” McGlochlin continued. “These are often sectors where employee performance directly impacts safety, productivity, and efficiency, and the fact that many of our respondents could directly link safety incidents to a poor hire is very worrying.”

“This is why quality is so important. A strong hire brings the right technical and transferable skills, as well as mindset, which reduces errors, minimizes downtime, and supports continuous improvement. This research shows the bottom-line impact of poor hires, which can significantly hurt output and profitability.”

Top Four Missing Skills

Of the skills most commonly lacking in new hires, the survey revealed that the top four were:

• Attention to detail
• Problem-solving
• Communication
• Advanced technical skills

Transferable skills, as well as job-specific skills, are clearly becoming an increasingly important factor in recruitment success.

“Industrial jobs are often shift-based, physically demanding, and require consistency, teamwork, and safety-mindedness,” said McGlochlin. “So, while a candidate may meet the basic technical requirements, if they don’t have qualities such as reliability, resilience, and attention to detail, candidates will be ABLE to do the job but are less likely to actually DO the job.”

“With technology changing so rapidly, recruiting people who have both technical and transferable skills is clearly a priority. These are skills that not only serve them well in their specific role but demonstrate future capabilities and agility.”

Talogy’s I-Grade (Industrial-Grade) suite of solutions are designed to help employers in the industrial sector to make informed hiring decisions. It assesses job-specific and transferable skills to help organizations hire the right person for the role and their company.