Many employers will readily identify the cost of a bad hire when a recruitment consultancy has been involved, but even when recruiting direct the costs are significant.
So what are the costs?
When recruiting themselves employers often fail to account for or appreciate the costs involved. Factors to account for when considering the cost of recruiting in house include:
Preparation of job spec Preparation of job advert Placing job advert Cost of job advert – this could be hundreds or thousands of pounds Initial screening of applicants – there could be up to 30 or 40 Responding to all applicants Preparing shortlist Preparing for and interviewing Review of 1st interviews
10. Preparing for and conducting 2nd interviews
11. Preparing job offer
12. Negotiating job offer
13. Finalising and issuing contracts
What are the additional costs when it goes wrong?
Aside from having to repeat the process when the hire doesn't work out, research has shown costs in other areas:
Lost productivity from the new hire and line manager Cost of training Negative impact on morale – often resulting in loss of productivity for other workers Negative impact on clients and potential lost business
There are early warning signs and failing new hires will exhibit some or all of the following:
Failure to deliver expected/required qualities of work Missed deadlines Failure to work well with others Negative attitude Attendance problems Customer complaints
Signs of any of these in a new hire must be nipped in the bud. Individually they are not fatal flaws; often it can be a case of miscommunication. New employees have come from different environments with different norms and expectations. Employers need to be explicit about what is expected both in relation to specific job performance and team/social interaction. Assuming the new starter should or will know is a recipe for disaster.
We know that hiring mistakes are costly but what can we do about them?
It is clear that the recruitment method does have an impact.
Candidates who respond to job adverts are actively looking for or at the very least interested in a move.? This can be because their tenure is not secure, which in turn could be related to performance.? Of course not all people responding to adverts are poor performers with few prospects at their current employer.? Sometimes it is a case of the employer not being able to satisfy their career aspirations.? Whatever the reason you need to explore their motivation in looking for a move at interview alongside probing their performance and competence.
Head hunted candidates are typically not looking for a move. This can be a good indicator that they are secure in their current role usually because they are performing well and not screwing up.
This track record of good performance is a good indicator of future performance and typically headhunted candidates are more successful, but it is not a certainty. At interview you should explore why they are successful and how they prefer to work. You need to ensure this is compatible with your organisation and the way you work.
For example some people are highly successful when working with a supporting team, which you may not have, and not so effective when forced to do their own follow up. Conversely others need free reign to achieve their potential and are stifled and frustrated when having to work with a team. They often end up duplicating or micro-managing the work they pass onto the team – inefficient and causing resentment.
A structured process for selection to identify these and other issues could involve:
Careful candidate selection Structured competency based interviewing Verify knowledge, skills and past performance Exploring the candidates methods, structure and approach Explore candidates attitudes and approach to your own structures and systems Consider psychometric testing – looking at their motivations, working style and how they like to be managed References, references, references Don't write Don't contact HR Aim for telephone conversation with line manager Ask about attendance, performance – verify claims, working environment and working styles, team interaction etc.
At the end of the day nothing is fool proof and I am yet to meet a manager who has never made a poor hiring decision. However, and this is so intimate to your business you can't rely on anyone else, explore past performance, verify through interview, testing and reference and ensure it is still a good fit for your requirement and you have a better chance than most.
Dani Novick is managing director of print and packaging recruitment specialists Mercury Search and Selection, which is sponsoring the Rising Star category at this year's UK Packaging Awards. Visit www.mercurysearch.com
