When it comes to deciding your recruiting methods and selecting the right candidates, the amount of choices available may be overwhelming. Unfortunately, making a wrong hiring decision could cost a company time and money. It might also have a negative impact on the company’s reputation, morale, and productivity. The Harvard Business Review points out that as much as “80 percent of employee turnover is due to bad hiring decisions.” Specifically, recruiters have been known to say that a poor hiring decision for a candidate earning $150,000 per year could cost the company an average of $375,000.
However, there are other less obvious costs that you may not be aware of, such as:
- interviewing candidate and verifying references
- by managers and other employees on training
- by HR on paperwork, benefits administration, payroll setup and orientation
- clients due to poor customer service
- employee morale if others have to pick up the work of the lower-performing employee
Why Is This Cost So High?
Expenses associated with hiring include interview costs incurred by travel, hotel and meals; training and orientation costs; termination costs such as Cobra, unemployment costs, and potential litigation expenses (in case the candidate decides to sue the company for wrongful dismissal). But the highest cost comes with the need to repeat the entire hiring process to replace the wrong hire, which includes time and a multitude of expenses.
How to Avoid Hiring the Wrong Person?
One reason why someone may not be a good fit in a company could be the cultural misfit. This can occur when a candidate, who seemed perfect on nearly every level, cannot fit in with the team. Asking specific questions related to the candidate’s personality and preferences during the interview process can help determine whether the candidate will fit within the firm’s culture.
One option that helps companies make better hiring decisions is to hire employees on a contract-to-permanent basis. This way, employers can evaluate the candidate, risk-free, while he or she is performing the actual job before they make a permanent decision. The talent division of ADAPTURE staffs a variety of contract-to-permanent position to companies all over the nation.
Working with a recruiter who specializes in a given field can help hiring managers identify job candidates with the appropriate skills for the position. As a talent division, ADAPTURE helps you screen candidates based on their skills and qualifications. They then match these skills with the job functions dictated by the position.
Five Tips for Making a Better Hiring Decision
ADAPTURE outlines five tips that would help improve your chances of hiring the right candidate:
- Provide a Specific Job Description. Do not reuse past job functions because chances are the role has changed in the meantime. Be cognizant of your current needs and the skill set you are looking for in a candidate. Providing a detailed job description will help reduce the number of resumes received from unqualified applicants.
- Make a Personal Connection. Hiring involves having a conversation with applicants to establish a relationship. Interviews allow you explore an applicant’s qualifications while assessing whether he or she is a fit for your corporate culture.
- Look For Intangible Skills. A candidate’s skill set is not limited to functional abilities—it also includes how well he or she works in a collaborative environment. Employers should always ask questions that would reveal the candidate’s soft skills, such as leadership and communication.
- Use Multiple Resources. Even though you may have the final say in a hiring decision, it should never be an individual effort. Take advantage of the tools available to you at your organization—for example, human resources can help with the job description, and employees may be able to offer referrals.
- Provide a Reasonable Offer. In any type of economy, people in high-demand may have multiple job offers. You need to show them why they should choose your organization over your competitors. Clearly explain the benefits of working with your firm, and offer a compensation package that is in line with—or ideally, above—market rates.