Bad Hire?ByRaymond D. Matkowsky
Businesses are complaining that they just cannot hire enough people. They are becoming desperate. However, people are continuing to use old techniques that they have used in the past. These procedures only add to the complexity of finding a new employee. These techniques haven’t worked well in the recent past and are not working now. Your business can offer more pay, but it is no guarantee. It has worked in the past, but it is very spotty now. The problem does not stem from pay alone. A meaningful change is long past due. If you want to keep the “status quo”, you will keep on doing what you are doing now. If it works for you, fine. But, if it doesn’t it is costing you money and a great deal at that. Out of desperation, you can make a bad hire!
The Cost of a Bad Hire
The average cost of a bad hire is constantly increasing. Beyond that knowledge the estimates are all across the spectrum. The U.S. Department of Labor puts the cost at 30% of the first year’s earnings. The CEO of the labor recruiter Link Humans puts the average cost as high as $240,000. This may not be difficult for a large international business, but even $30,000 is very significant for a small operation. It is imperative to avoid bad hires.
Companies report that they hired the wrong person 50% to 80% of the time. This is no small problem. The smaller the company is, the bigger the problem.
The cost of a bad hire is not only financial. There is lost productivity. No one ever hits the road running. If nothing else a new hire has to learn about your customers. The person has to learn how they want things done. They have to learn how you want things done. They have to learn what is possible and what is not possible for you to deliver before they could truly contribute to the organization. Realistically, it takes about a year for a new hire to experience all the possibilities. In that year, you could lose a great deal.
A bad hire can damage your reputation with not only present clients but with possible future clients also. I have used a certain vendor for many years. However, over the last few years this vendor has sent the same representative that has given me bad advice twice. I do not plan on giving the company a third opportunity.
Who Do You Hire and Where Do You Find Them?
An interesting survey from Generation, an employment non-profit organization found that hiring managers, which tend to be younger, view their peers as more qualified than older workers. For an older worker this tends to be very discouraging and denies the company of someone that may truly be better at the position.
I have no “one size fits all” answer. Each company, each hiring authority, requires a customized answer. However, it is clear that what has occurred in the past cannot continue if you want to move ahead.
I do have two suggestions. Do not rely on resumes alone. Resumes have so many similarities that it is very difficult to distinguish between candidates. The system has also been gamed. This is especially true for some computer based sorting systems. Just an inclusion of a section entitled “keywords” is enough to fool some systems. Rely more on the cover letter that should be enclosed with the resume. Use your gut feeling about what that cover letter says about the applicant. The cover letter may reveal significant information that the resume doesn’t.
I have been a proponent of training and promoting from within the company. Train a lower level person to perform a higher level job. You not only increase employee loyalty, you also already know the person’s work ethic. By doing this you will fill a critical position much sooner with less expense. You should find it much easier to hire a replacement for the lower level position.
There are also the advantages an existing employee will bring. He or she already knows your customers. The employee already knows your procedures. If anyone can come close to “hitting the ground running,” it would be that person.
Hiring a new employee is fraught with disastrous possibilities.
Recommendations should only be taken from the most trusted sources. Other people fear the liability of a poor recommendation. Like I said above, there is no “one size fits all” process. Tread with care!
If you have any further suggestions, do not keep it to yourself. Help your fellow readers!
If you have any questions, comments or suggestions drop me a line at rdm@datastats.com.
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