The cost of poor interviews and bad hires, 3 ways to make your recruitment more effective.
From small to large businesses, interviews can be stressful, expensive, time consuming, often boring, sometimes funny, hopefully interesting and always make for a very long day. But it is so important to get this stage right.
Saving your business and you the recruitment headache as well as time, energy and especially money, in the long run.
At the early stages, business owners often don’t invest in efficient recruitment, often seen as ‘too small to matter’, that various employment laws don’t apply to them and new hires will ‘onboard themselves’.
However, this is the crucial time for good hiring processes and long-term engagement. Poor interview experience for the candidate can undermine the employer’s brand, causing you to lose good candidates, negatively impact reputation and lead to bad reviews. On top of that, not being able to recruit, or recruiting a bad hire, can lead to a productivity and performance dip, lower team morale and create even more work for you in fixing errors and mistakes. Again, leading to negative reputation and bad reviews. All heavily impacting a growing business. Considering the loss of time and money that creates, it is definitely worth taking time to get it right.
The HRreview reported, based on research completed by Oxford Economics, that replacing staff members incurs significant costs for employers, which can be up to £30,614 per employee. Other studies, such as CAP, have shown costs based on annual salary from 16% for low paid positions, up to 25-30% for mid-range roles and over 200% for senior positions. That is a lot of additional cost to the business which often is not budgeted for. The percentages are mainly based on the cost of lost output while trying to re-recruit and then get that new recruit up to speed, as well as the logistical cost of recruiting (advertising, agency fees, interview time) and new starter costs of taking on a new worker.So, what can you do to help mitigate some of those additional costs and get the great hire first time?Investing some time and a little money upfront, can save a whole load of both later on.
This is why the giants, such as Google, have focused so much on comprehensive recruitment processes, right from the start.Lets’ consider some effective strategic planning and preparation upfront.
Get people coming to you.
Great recruitment experience can add to creating a reputation of an employer of choice. No matter your size, ambitions or goals, being seen as a great employer creates an excellent reputation for the customers, as well as employees and therefore it can attract talent to you. This helps to save time, through a pipeline of eager candidates and referrals, particularly as the average lead time of advert to new starter is reported to be 4 weeks, and also money, in recruitment agency fees and advertising costs.
If you are already a great company with glowing customer reviews, this isn’t about spending money, but promoting what you already have, a great company with supportive leaders and a clear direction to encourage people to come on board. For example, share some employee interviews on the website or via social media. Treat your employees as customers and lead and manage them with the same care and attention and build that reputation inside and outside your organisation.
Referrals and recommendations for candidates through existing employees can be a good way of building a team, making sure you still go through your recruitment process to check skills, qualification, team and culture fit as well as references. Demonstrating, and living up to an equal opportunity employer ensures a fair and transparent process which will substantiate your position as a great company to work for, and meet your employment law requirements.
Hire your A-team.
I completely agree with the notion of hiring people who are smarter than you. Getting an expert in their field allows you to also learn and grow as a leader, build great skills and competence in your team and attract even more talent.
However, for a number of reasons some owners and managers shy away from this.
Remember to position yourself as the CEO of the business. As much as you want to retain oversight and sign off of all activities, this doesn’t equal control and micromanagement, if you are looking to grow, you can’t and shouldn’t, do everything. Without allowing and enabling the right people in the right positions to get on with their jobs, you will never have a day off and most likely be run into the ground! Along with the business.
Taking responsibility for your actions and the business performance, rather than hiding behind excuses and mistakes, allows opportunities for improvement and moving the business forward, to do that you need skills and experiences you may not have, or just don’t have time to apply in all areas.
Ensure a thorough recruitment process.
To prevent potential problems in the long run, get the recruitment and hiring plan right from the start.
Hire for competency, hire for values, hire for problem solving as well as the technical skills you need for the role. Consider how they fit in and add value to your existing team and team roles. Design your culture and hiring practices to attract stars. If you only recruit the most qualified or experienced person, they may not be the right fit or bring the behavioural qualities you need for the team and organisation to work. This depends on where you are with your business, the industry and context of your situation, but really consider what you need.
Consider a thorough recruitment process to assess for this. There are small, practical steps you can add into your recruitment to ensure that you are not basing your decisions on one informal chat.
Research supports the predictive value of structured interviews, competency questions, assessments, presentations and trials relevant to the role. Mistakes are harder to put right once they are employed.
However, the right person, enables you to get on with running your business.
One further way to avoid re-recruitment and turnover costs is to focus on your employee retention. This is a whole topic we will look at another time.
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