Stop Hiring “Maybe Talent”!
April 5, 2018
How to Hire the best candidates every time! Written by: Christopher Drashner, Managing Partner at The Remedy Group
I’m in the business of hiring. In my nearly 20 years in headhunting, I and my company have placed thousands of people throughout the country. Therefore I know a thing or two about best practices when it comes to hiring as it is what we do. We talk to the top performers in the industries we work all day, every day to find out what separates them from the rest.
Companies today, across all industries, struggle with the same major issue: finding, hiring, and retaining top talent. This is the biggest problem companies face today because even if you have the best product in the market and you don’t have the right people behind or in front of that product you’re not going to be as successful as you should be. And that is the goal, for your company to be as successful as possible.
There are estimates that the financial impact of hiring a top performer is 10-100x their base salary. Therefore, a top performer with a base salary of $100,000 has the potential of adding $1,000,000- 10,000,000 in annual revenue to the company every year they’re employed.
The Cost of a Mis-Hire
Financial | The U.S. Department of Labor estimates that the cost of a bad hire can equal 30 percent of the employee’s potential first-year earnings. A study by the Society for Human Resources Management (SHRM) estimated that a bad hire could cost up to five times the employee’s annual salary. For someone with a base salary of $100,000 you’re looking at a cost between $30,000 and $500,000.
Productivity | The loss of productivity of training and having to manage a bad hire is high. Supervisors have to spend more of their time managing poorly performing employees which result in fewer sales, slower processes, good employees unhappy due to lack of attention.
Morale | Spending time, energy, and money on bad hires may cause the rest of your team to become disengaged leading to lower morale. It’s hard to stay positive when one person takes up so much of a supervisor’s time and their inability to do the job brings down the whole team’s productivity. In many cases, the bad hire will also not get along with the team which will further bring down morale.
Reputation | Your company is your people and a bad hire can bring down the reputation of your company with customers and potential future hires. A bad hire in a sales role can be especially detrimental to your company because they may cause you to never be able to make that sale since you only have one chance to make a first impression.
Opportunity | The opportunity cost is the difference between what would have happened were you to hire a top performer and what actually happened by having a bad hire. Obviously this cost is potentially huge to your company.
Solving the Problem
Now that we all understand and can agree how big of a problem mis-hires can be, how do we avoid making these mistakes? First we need to identify why mis-hires happen then we can avoid those pitfalls.
Time | Most people hiring for their teams are tasked with double duty: do their regular jobs as well as the job of a recruiter. Go through resumes, schedule & conduct interviews, do background & reference checks, negotiate offers, then finally on-board and train the new hire. Typically when someone is doing two things at once neither gets accomplished very well.
Urgency | People hiring for an urgent need don’t have time to wait for the right candidate to come along so they’ll choose the best of the limited options they have. They need someone in the position NOW and they settle for a candidate.
Understanding the Role | Human Resources and the Hiring Manager are rarely on the same page when it comes to what the role requires and who would be the best fit. Human Resources will often rely solely on a job description to understand a role but a Hiring Manager will ignore the job description and know the real qualifications needed for the position. This miscommunication leads to candidates that are not best suited to succeed in the role.
Lack of candidates | When companies only interview the candidates that apply to their ads on their website or online then they’re only getting a tiny percentage of the candidate pool. And rarely are those people that are applying the top performers that you must hire. Posting jobs online is a great way to get inundated with a bunch of resumes that aren’t a good fit.
The interview | A shockingly large percentage of Hiring Managers make their hiring decision within the first ten minutes of interviewing a candidate. These decisions are based on how a candidate looks, dresses, or behaves. This is not a good way to hire as the best interviewees are rarely the best performers. The personal interview should not be your major decision making factor in who you decide to hire.
The interview process | Going through 6 rounds of interviews that take 4 weeks is going to cost you a top performer. You must have a streamlined interview process that can not only identify talent but can move someone through the process as quickly as possible.
Hiring the Best
We know that mis-hires are detrimental to a business and now we know how to avoid them. But how do we identify top talent and only hire the best?
Recruiting Process – Read our well-defined recruiting process by downloading the full white paper on the home page of the Remedy Recruiting website.