Successful organisations constantly study expenditures, ROI and value for money in all decisions they make. However, the interpretation of “return on effort” without putting a financial component to the activity is where leaders often fail to recognise their mistakes, especially when it comes to recruitment.
According to research from recruitment specialist Robert Half, 10% of employee turnover in Australia is the result of poor hiring decisions with almost 65% of Australian HR managers admitting they have hired an employee who did not meet expectations.
Getting back to adding the “financial component” to recruiting efforts; people still find it astonishing when told the cost implications of getting recruitment wrong.
“Numerous surveys indicate that – on average – recruiting the wrong person can cost an organisation 2.5 times the basic annual salary of the ‘bad recruit’.”
Here follows a quick break-down of the obvious financial costs involved in getting it wrong:
- The cost of the salary paid
- The cost of time spent interviewing the candidate
- The cost of making the person redundant
- The cost of internal time taken from other team members to cover the recruiter’s position while recruiting
- The cost of time taken to form an exit strategy for the poor performer
- The cost of repeating the recruitment process all over again (time, adverts etc.)
- The cost of training and development spent on the outgoing employee as well as the replacement
Now that’s not all… there are also the “not-so-obvious losses” an organisation incurs when recruitment goes south.
- The loss of team morale when their leader introduces a rotten apple to the mix and when they need to clean up after the bad recruit on top of it.
- The company’s reputation; not just as a place to work for, but also as a company to do business with can also sustain substantial damage if word gets out about bad recruitment practices.
- The loss of overall productivity is another area of injury sustained by buying a pig in a poke – this potentially resulting in unmeasurable financial losses.
Why do keep getting recruitment wrong?
Here follow 8 straightforward practices to avoid when hiring:
1. DON’T DIY
Consult with colleagues and peers in your organization about the specifics involved in the open role and work with a reputable recruitment specialist to find the best candidates.
2. DON’T RELY ON A STANDARD JOB DESCRIPTION
To attract the correct talent to the job, consider adding supplementary information such as the existing company culture, benefits packages and development opportunities
3. DON’T BE A SHEEP
Avoid seeking where everybody else seeks talent. Attempt to “actively” source talent by also taking the “passive candidate market” into account – those are the candidates that can become open to an alternative job offer with the right swaying cocktail of temptation.
4. DON’T BANK ON THE INTERNET
Online tools are invaluable, no doubt, but remember that personal interaction is one of the fundamentals of the hiring process. By nurturing your network of acquaintances on a personal level, it sanctions you to cultivate your own au fait talent pool.
5. DON’T BE IGNORANT
These days many specialist tools like psychometric testing exist that can be integrated into your recruitment strategy to pinpoint your true match. Invest in hiring a specialist who can offer access to a more profound knowledge of your candidate and a guaranteed higher success rate.
6. HE WHO HESITATES IS LOST
Companies risk losing good talent to other speculators when they don’t move in fast enough. Once you have identified your top candidate, don’t hesitate to extend an offer immediately.
7. DON’T OFFER TOO LITTLE
Make sure you research and stay on top of prevailing trends when it comes to current salaries. Offer remuneration that is, at a minimum, market related.
8. DON’T FORGET SOFT SKILLS
The goal is to hire the best match for the job and the work environment. Identify the skills that are firmly required, the ones that can be developed as well as those skills that may add value to your whole team.
“Smart companies know that they’re only as good as their best workers, and will prioritise seeking out the best of the best for their organisations.”
“Smart companies embrace specialist recruitment strategies that understand their business model and company culture to prevent those losses occurring from hiring mistakes.”
At Verity, we utilise a winning combination of the best recruitment practices affording us our proven success rates that reach far beyond the industry norm.