Recruitment of new talent is probably the most important thing you do for your business.
Instinctively, you may disagree. In fact, most organisations believe that the most important thing that they do ... is the thing that they do, i.e., what they make or the service that they provide.
This argument carries some weight but who delivers this for you? Your talent of course!
This is why a bad hire can really hit you where it hurts - your business strategy, your productivity and your profit margin.
I smiled when a new client once told me she was having a "bad hire day" conjuring up the image of those days when all the hairspray and brushing in the world just won't stop you leaving the house looking like you have a bird's nest perched on your head. Her humorous remark hides the pain of a bad hire, though.
The Recruitment & Employment Confederation (REC) recently published research that demonstrates the scale. Giving the example of a middle manager on £42k per year, the REC believes the cost of a bad hire would be more than £132,000 - over three times the salary!
When you consider the wasted time and money spent onboarding your new hire, training them, paying their salary, added to the cost of recruiting them in the first place and the cost of replacing them, it's easy to see how this cost racks up. Beyond these obvious costs though, there are the hidden costs of lost productivity and not just from your bad hire. There can be a contagion effect that hits the morale of your whole tea.
So, with that sobering thought ... here are ...
5 Ways To Avoid A bad Hire Day!
1 - Prioritise Hiring
Sounds obvious but not every hirer prioritises hiring. Many firms treat it as a task to crowbar into your busy day after all your other jobs have been crossed off your list.
People-centred SendGrid CEO Sameer Dholakia described how he believes "recruiting is a mission-critical function" for a business, in his "Focus on People" presentation to Stanford Entrepreneurial Thought Leaders, he also said that employees should see recruiting as a privilege where they get to represent the company and attract the best people to join.
Indeed, Sameer Dholakia once wrote, "We believe people are our most valuable asset. Highly engaged employees are a competitive advantage for any business ... values create value ... having a deeply shared set of beliefs actually creates economic value."
You can prioritise hiring by diarising sufficient time for evaluation, ensuring that your 'A players' are on the interviewing panel and partnering with a specialist recruiter, which becomes increasingly important the more specialist the role you have to fill.
2 - Get Someone to Share the Risk
85% of HR decision-makers admit that their organisation has made a bad hire, according to that REC research quoted earlier. Multiply that by the £132,00 cost of a bad hire estimated by the REC and you get a sense of the scale of the risk!
The best way to mitigate this is to use a specialist recruitment partner who will share the risk. What this means in practice is find a partner who will put their money where their mouth is. Instead of paying up front you spread payments across a substantial initial employment period and if the hire doesn't work out - you stop paying.
From my side of the arrangement, this really focusses the mind. As a recruitment business it becomes critical that the talent you put forward will go the distance, otherwise, you don't get paid your full fee - which in turn gives the hiring client some peace of mind! I'm amazed that every recruiter doesn't adopt this commercial model, it demonstrates the level of confidence that you have in your ability to deliver on your client needs.
3 - Avoid "Quick Get Someone, Get Anyone" Hires
I keep seeing this happen. You have a position to fill, you have projects aligned with business strategy, deadlines are looming, budgets are tight, the pressure is on ... so you rush a hire. Then, amazingly, things don't quite work out.
In my experience, these are never reckless, thoughtless hires, it's just that speed is of the essence. I have looked at the CVs of Project Managers hired in this way and, they look great on paper. All qualification boxes were ticked, they interviewed well and seemed to understand the strategic importance of the roles. Unfortunately, the "Quick Get Someone, Get Anyone" approach often doesn't match the rigours of a project with the competences of a Project Manager.
For effective speed, partner with a recruiter who maintains a database of interviewed talent, a partner who will first get to know you, your culture and your projects before telling you that they know "just the right person".
4 - Avoid The "Beneath Your Skill Level" Hire
I think it was Steve Jobs who said that A players hire A players, B players hire C players, C players hire D players, etc.
There is an often unconscious bias towards hiring talent that is not considered a threat. I saw this with a CIO once who repeatedly vetoed talent who had the potential to take his job one day. If you don't hire the 'A Player' talent - where are they going to go? Your competitor, I guess.
Richard Branson, James Dyson and many other successful entrepreneurs famously did the opposite. They surrounded themselves with brilliant talent - often smarter than they were!
One of Richard Branson's three hiring rules is based on a conversation he had with Spanx founder Sara Blakely who told him, "The smartest thing I ever did in the early going was to hire my weaknesses."
In his book, "The Virgin Way: Everything I Know About Leadership", Branson recommends evaluating where you personally need to improve and seeking out that quality in people you hire.
Again, partnering with a specialist recruiter can help identify these areas and also, an independent partner doesn't have that subconscious fear that the next hire might be after their job!
5 - Initiate a Talent Referral Scheme
I often think of the IT world as a big village and the villagers like to talk. No-one sells your business as a great place to work better than the people who work for it and also no-one is more protective of it remaining great. No-one knows what it takes to fit your culture, what it takes to succeed, and what kind of person would complement the existing team better than the people you see each day at the water cooler.
When you ask colleagues to recommend a friend or recommend your vacancy to their contacts, the last thing they are going to do is just recommend anyone - they're going to only recommend the best person that they can think of.
Sometimes, offering an incentive can really drive engagement in a talent referral scheme but, more often than not, the buzz of helping build the team and helping out a friend or contact is enough of a reward.
So there you go, just five ways to avoid a 'Bad Hire Day'. If you have any more I'd love to hear them, please get in touch.
In the meantime, let's avoiding forking out three times your next hire's salary, let's make your next hire not just good but the best hire you ever sign up!
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