Most managers can tell you a story about a bad hire and how long it took to train, develop and potentially terminate and replace this person. These stories are a dime a dozen and can often be avoided with the appropriate pre-employment processes in place. The U.S. Department of Labor estimates the cost of a bad hiring decision is around 30 percent of the first-year expected earnings. If you are hiring a minimum wage worker in the state of California that 30 percent calculates to nearly $10,000 wasted due to a poor hiring decision. This percentage can be argued in either direction given the myriad of known and unknown costs associated with hiring and weather these expenses are easy to quantify or not.
Costs Associated with Bad Hires - Some obvious costs are the actual recruitment costs. The costs associated with sourcing or finding the candidate, the time spent interviewing the candidate and any pre-employment testing done like behavioral or competency tests or background and drug screening tests. Once you have selected and screened the candidate you have onboarding and training costs. The time it takes to get the employee trained and acclimated to the position, understanding the requirements of the position and how to successfully complete the job. When the employee begins to perform below standards, there are additional training costs associated with managing their performance which can drain productivity in other areas of the organization, or diminish sales, customer rating, etc. All things that cannot be measured easily and help make up the hidden costs of a bad hire. These can bleed over into lower employee morale and impact a team’s stress and well-being. If you are unlucky enough to then have costly legal fees due to termination, or inappropriate behavior, the bill just keeps going up.
Knowing how costly a bad hire can be, it is surprising that some companies do not invest in effective recruitment efforts. But what do those look like?
Good hires for half the cost? - Not quite, but when you look at how expensive a bad hire can be, investing in your selection and screening processes can add value to your company over time. If you had zero percent turnover for 5 years, how much money would you save in training and recruiting time? The goal is to hire top performers and keep them working for you. You can improve your odds of hiring such a person by implementing solid selection processes. This includes quality interview processes, skills assessments and following up with reference checks. Lets take a look at each.
Pre employment processes that will aid in securing the right talent -
Ensure you have a standard outline of what all interviews will assess - generally the job function and relevant skills needed to complete the job. This usually starts with having a compliant job description that outlines the relevant job duties as well as the necessary knowledge, skills and abilities needed to successfully complete the job.
Need help writing a job description? We are here to help. HR Consultants can help you navigate this important piece of the recruiting process by ensuring these are written in compliance with local, state and federal guidelines. This piece is the basis of the whole process.
When determining interviewing styles you can use one or multiple types depending on what makes sense for the role. Typical types include behavioral, case, competency, planned or structured.
A behavioral interview focuses on how the candidate has behaved in the past, to predict future behavior. Questions like, “Tell me about a time you…” are typical in these interviews.
A case interview involves providing the applicant with a problem or case to solve and having them walk you through their process in solving it assessing their critical thinking and business acumen. Can be a common interview type for sales roles.
A competency interview is much like it sounds. The applicant is asked a series of questions pertaining to the competency area in which they present as a subject matter expert. Most interviews will have a degree of competency based questions to assess the candidate’s knowledge of the subject matter.
A planned/structured interview is comprised of the same questions asked of each applicant. Questions usually test various skills such as team building, communication, interpersonal skills, etc.
Once the candidate has passed various interviews it may be necessary to check their knowledge or skills. A skills assessment is a test performed to assess a candidate’s competency, knowledge, or behavior relevant to the position. These should be administered in a consistent manner to all potential top applicants. Once an applicant is offered the role, employment and education verification as well as reference checks should be conducted to ensure their resume reflects the correct details. Could you imagine hiring a doctor only to find out they never went to medical school?
Following a consistent and fair process in recruitment should always be the standard. For each position, outlining the structure of the interview process, the skills assessment and the rubric in which applicants will be evaluated will mitigate any risks associated with a discrimination claim from applicants. If you need assistance in organizing your recruitment process, we are here to help. We can complete 100% of the recruitment process or aid in certain stages of the process.
What makes our recruitment process different than a standard recruitment agency? We have a few additional value adds that help make sure you are hiring top talent and doing it in a way that increases your legal compliance. To begin, we will do a job analysis and write the job description for you if you do not have one. Next, we will do a salary survey to assess the current market value of this position and provide a salary range. After screening candidates and doing phone interviews, we partner with you to narrow down to the top candidates. We will provide a customized interview guide which includes interview questions specific to your job. In addition, we join you for the live, in person interviews! Once the interviews are complete, we will partner with you to help select your final candidate. Last steps we complete will be a verbal offer, written offer and then background check if you choose to do one.
