Large UK businesses could see at least £132.6 million in lost productivity in 2025 due to inefficient recruitment processes and unfilled vacancies, according to a new report.
The study, conducted by PageGroup’s Enterprise Solutions team in partnership with the Centre for Economics and Business Research (Cebr) and YouGov, surveyed 100 recruitment decision-makers at UK organisations with over 250 employees.
The findings highlight concerns over prolonged hiring processes and talent shortages, with 48 percent of respondents identifying recruitment as a key challenge for the coming year. A lack of available talent (34%) and extended hiring times (36%) were cited as the biggest obstacles.
As a result, one third of respondents expect hiring times to increase in 2025, leading to an estimated loss of six working weeks per organisation due to unfilled positions. This alone could result in £90.2 million in lost productivity across the UK. Additionally, inefficient recruitment processes, described as slow and overly complex, contribute to a further three-week productivity loss per organisation, equating to £42.5 million in lost output.
The Cost of Inefficiency in Hiring
When combining the effects of unfilled positions and inefficient recruitment, the total cost to the UK economy is projected to reach £132.6 million in 2025. Large organisations are expected to lose an average of nine working weeks due to these issues.
Christopher Breen, Head of Economic Insight at Cebr, said, “Despite recent economic uncertainties, vacancy levels in the UK remain broadly in line with pre-pandemic figures, which were seen at the time as elevated. Despite employment growth stagnating recently, wage growth remains elevated, indicating that the fight to secure talent remains intense.”
As well as slowing down business growth, unfilled vacancies increase pressure on existing employees with higher workloads – which in turn lowers morale and may lead to greater staff turnover.
Long-Term Workforce Planning Challenges
Beyond immediate hiring concerns, the report highlights longer-term workforce planning challenges. Employee turnover (45%) and the availability of skilled talent (37%) were identified as key issues for the next five years.
Patrick Hollard, Chief Customer Officer at PageGroup, commented, “The ever-evolving global talent landscape has become increasingly complex. Bolstered workers’ rights, expansive pay transparency directives and shifting attitudes towards DE&I are just some of the nuances multinational businesses must navigate this year.”
He added that UK businesses need to change how they approach hiring and retention and that almost 1 in 5 UK businesses are considering adjusting their talent acquisition strategy over the next two years.
Addressing Inefficient Recruitment Processes
There are several ways to make the recruitment process more efficient. The first step is ensuring that job adverts are clear in their wording, the qualifications or skills needed for the role and pay range on offer. This will greatly reduce the number of candidates applying only to realise later they are not a good fit, saving time for everyone involved. An efficient and well-structured onboarding process also goes a long way towards helping new hires hit the ground running and retaining them in the future.
Employers are also shifting focus from traditional qualifications to a skills-based approach. A 2024 survey by HireVue shows a shift towards skills-based hiring, with 70% of hiring managers prioritising skills assessments over more traditional recruitment methods, such as CVs and cover letters. There is also lot of interest in the potential of AI to speed up the hiring process, using data to narrow down the options and streamline the process.
Upskilling and reskilling initiatives also play a significant role, enabling employees to adapt to changing demands and take on new responsibilities. One strategy gaining traction is lateral hiring – recruiting employees from within the organisation and upskilling them to take on new roles. This approach not only helps address the talent shortage but also reduces hiring costs and improves employee retention.
With businesses facing ongoing recruitment pressures, addressing inefficiencies in hiring processes will be key to maintaining productivity and competitiveness in 2025 and beyond.
Alessandra Pacelli is a journalist and author contributing to HRreview, where she covers topics including labour market trends, employment costs, and workplace issues.
- Alessandra Pacelli
- Alessandra Pacelli
- Alessandra Pacelli
- Alessandra Pacelli
