How much does it cost to hire a graduate?

Unqualified graduate hires cost businesses thousands of pounds each year. Performing a simple background check on candidates could save employers time and money

As a new set of graduates prepare to embark on the first steps of post-university life, the role their prospective employers now take becomes increasingly important. The diligence of businesses is paramount in ensuring the best experience for these new graduates, but also in safeguarding employers and their interests throughout the hiring process from those who may be looking to exploit this annual recruitment boom.

For those looking to hire graduates, either into new roles or to replace outgoing staff, the process should be exactly the same as if hiring any other new member of the team. Indeed, a graduate - freshly out of university with a good degree and placement or work experience under their belt - provides employers with an eager and able individual who is excited to hit the ground running.

The costs associated with hiring any new member of staff, however, run much deeper than what is often expected, with the investment of money and time frequently amounting to roughly double the salary alone. Mounting recruitment costs means there is an imperative to ensure the process runs as smoothly as possible, and this includes performing the correct and thorough background checks - especially around the candidate's academic credentials. As an employer, the last thing you want is to have dedicated the money and resources required, only to discover the individual in question might not hold the qualifications they claim to.

Although the majority of graduates wouldn't dream of inflating their grades, buying a fake certificate online or otherwise misrepresenting their academic credentials, degree fraud is a global problem and the UK is a leading market. The prestigious status held by UK degrees makes them valuable and alluring targets for would-be fraudsters, be that in forging documents outright or distorting existing credentials.

The reality is that degree fraud as a whole is a larger problem than many realise. A lack of attention on the topic combined with relatively lax attitudes towards legal repercussions has created an environment in which it can thrive. Risk Advisory's CV Lies 2017 report evidenced that, in a survey of around 5,000 UK CVs, 80% contained some form of discrepancy - 57% of which related to an individual's higher education qualifications. These statistics are supported by research from Axelos, whose extensive three-year study highlights that almost 100,000 job applicants lied on their CV in their efforts to land a job.

In an increasingly competitive marketplace, candidates are doing whatever they can to get ahead, even if this means exaggerating or outright fabricating their qualifications. The knock-on effect to businesses, however, can be significant. Axelos reports that nearly 40% of companies have spent more than £10,000 in the last three years on rehiring staff to replace unqualified appointments, with 9% reporting costs of over £40,000. As staggering as these numbers are in financial terms, businesses also run the risk of substantially damaging their reputation too. A rogue employee may have a role to lose, but for the business the lasting effects can stretch well beyond the purse strings.

With all the correct checks in place, it can be tempting to think that the brunt of the cost has been borne at the point of any graduate starting his or her role. However, a hidden cost that escapes many employers is the time lost to productivity as the new member settles into the organisation. Research carried out by Oxford Economics in 2014 indicates that it takes, on average, around 28 weeks for new hires to reach their optimum efficiency, at an average cost of around £25,000. The table below sets out the costs incurred by the five largest sectors:

Across the five sectors, the total cost to industry and productivity stands at a staggering £4.13billion. Whilst much of this is absorbed and expected, any instances in which members of staff have to be replaced clearly come with a substantial financial burden. Undoubtedly, many cases could be easily avoided by making the proper and full checks.

Ultimately, hiring new staff into any organisation is a long and expensive process, and working to ensure efficiency is paramount in the continuing smooth operation of the business. The last thing any employer wants to do is have to restart the process over upon discovering that the degree credentials of any graduate aren't quite what they seem, or worse still, outright forgeries. By incorporating a quick, simple, and accurate check of any individual’s degree through a service such as Hedd, you can mitigate any potential risks and protect your business against anyone looking to defraud their way into employment. In doing so, you are also protecting the thousands of talented and enthusiastic graduates looking to bring their skills to your company.

Written by

Tom Pinder

University engagement executive

Prospects