Talent in today’s business environment is the catalyst of success. This is proven time and again by those companies that rank recruiting and talent as their number one priority, year in and year out. Companies like Apple, Disney, Nike and Google all rank a commitment to hiring top talent as their number 1 priority. These organizations are also all on Fortune’s list of Most Admired Companies.
Does this mean these organizations never make bad hires? NO! What this means is that these companies work hard to avoid bad hires, also called mis-hires. By training their managers on best hiring practices and adhering to company wide guidelines around how to recruit, interview and select candidates, these market leaders proactively set the bar higher than other competitive organizations.
It is imperative to have a great hiring system in place. While other resources can and should be used in this process development, we will lay the groundwork here to set up a proper recruiting and interviewing structure.
Why? Mis-hires are Costly
Most people do not understand the severity and cost associated with hiring the wrong person for a job. According to Dr. Brad Smart of Topgrading.com, approximately 25% of all managers are top performers, which translates to a 75% mis-hire rate for managers alone.
In his book Topgrading, Smart estimates the cost of a mis-hire ranges between 5X and 24X an employee’s compensation. Conservatively, the overall cost of mis-hires for managers to the US economy has been estimated at $864.5 billion annually. This might not cure our national debt, but it would certainly go a long way to reduce it.
The causes of mis-hires are many, but the top 7 reasons for it are:
- No clear definition of the hiring requirements. What are the MUST HAVE items?
- No clear ownership of the hiring process. Who is ultimately responsible for the hire?
- Reliance on one person to make the decision for the hire. Who else interviews?
- Hiring for functional attributes ONLY. Do they fit in with the team or group?
- Hiring based on interview only. Are they really who they say they are?
- Lack of thoroughness in the process. Who validated their claims? References?
- Poor onboarding. How do we acclimate them to our team / company / products?
Where Do the Best Candidates Come From?
Referrals – Whether it’s your top manager or your top salesperson, the old adage of “birds of a feather flock together” generally rings true. Not everyone that gets referred should be hired, but make it a practice of asking for them so employees send them over. Oh, and by the way, pay them for those who get hired! Some companies are willing to pay a recruiter $30,000 or more for a hire yet are not willing to pay their own employees. Good talent is not cheap.
Job Board / Careers Sites – While most sites will flood you with “active” candidates, there are still some good ones that troll the job boards. Boards like indeed.com, which was purchased by Tokyo based Recruit Co. Ltd. for $1 billion, scour the internet for open positions and then aggregate them back to their own site. Indeed, seems to be the most active job board; and while LInkedIn is trying to build a business around their recruiting platform, experts suggest that Indeed has a stronger hold on the market… for now.
3rd Party – Whether it is through contract services or third-party agency, recruiters still have a very strong impact on hiring today. There are many reasons why this could be true, but the primary reason is that good niche executive search firms have connections and relationships that most hiring managers do not have. Why? Because their livelihood is knowing who the players are in a given market and building rapport with them so that when an opportunity comes up that’s a match, they can call them and potentially represent them to a company. By knowing more players in an industry or local market, recruiters continue to remain relevant even in this digital age.
Now, more than ever, it is time to get really serious about your hiring process. Our team is here to help.
At Cerca, we are professionals working with professionals to fine tune talent branding. If you are a leader looking to expand your team with professionals who are focused on delivering work in which they take pride, and you can be proud of, every day, then we would be privileged to help you in the process. Having been pros ourselves in the fields where we focus, we know the ins and outs of the companies, the business and the customers.
Partner with the group that can talk shop and gain rapport with the pros who will lead your business into the future. Let’s figure out what is going to help you in your quest to select those “A” players that will provide you a 10X return on your money. Just email me today at email@example.com, and we will begin the process of connecting you to Allstars that will help you set records.