It’s no secret that a bad hire is one of the most expensive mistakes a business can make. Zappos CEO Tony Hsieh once valued his own hiring mistakes at “well over $100 million.” Jörgen Sundberg, CEO of Link Humans, put the cost of a mid-level managerial hiring misstep at $840,000.
What causes companies to make such expensive mistakes?
“Often, it’s a lack of awareness of what outcomes the hire needs to achieve,” explains Dane Palarino, founder of DAP Consulting Group, an executive search firm that helps companies avoid hiring mishaps. “Once you have muscle memory to a good golf swing, you aren’t thinking about it; it’s instinctual. The most important thing is to identify people who have muscle memory for the tasks and objectives needed to succeed in your role — have they done what you need them to do in the past?”
Bad hires may be expensive and tough to spot ahead of time, but money is just one of the reasons company leaders need to take a hard look at their hiring practices.
Why Hire Well?
Better hiring practices build better businesses for at least three reasons:
The demand for top talent far exceeds the supply. Palarino says that true A-players aren’t looking for a job; they already have one, and they’re only interested in a better experience. Strong candidates expect clear definitions of what they’ll be asked to achieve in the coming year. Although many job descriptions list required skills, few describe desired outcomes and milestones against which both parties can measure the new hire’s progress. Because talented people receive requests to apply for roles regularly, be sure the hiring process is just as clear and concise as the role’s description.
Soft skills are more critical to success than hard ones.
Job postings tend to prioritize hard skills — not because employers prefer them over soft skills, but because hard skills are easier to describe. Someone either does or doesn’t have a commercial driver’s license, for example. But what does it mean when a company asks for soft skills like organization? Must applicants be the next Marie Kondo, or is anyone with a filing system welcome to apply?
Because of that challenge, it’s critical to invest in in-person interviews. Although it’s expensive, flying six top applicants out to your location instead of two triples your chances of finding the right fit. Skills like listening — which a recent Morning Consult survey for Cengage indicated was employers’ most valued skill, with 74 percent of respondents saying they value it — are best evaluated on-site. Nonverbal cues like body language and note-taking show through. Close behind were attention to detail, at 70 percent, and effective communication, at 69 percent.
Thorough onboarding builds better teams.
Too often, employers forget that only half the hiring process happens before an applicant signs on the dotted line. The rest, of course, occurs during the probationary period, when the employer and employee are trying to determine whether the other is the right long-term fit. “Onboarding is a magic moment when new employees decide to stay engaged or become disengaged,” observes Amy Hirsch Robinson, principal of Los Angeles-based The Interchange Group. “It offers an imprinting window when you can make an impression that stays with new employees for the duration of their careers.”
When employees experience a great onboarding process, they’re 69 percent more likely to stay with a company for three years, a Society for Human Resource Management report shows. Although onboarding programs vary widely by industry and role, strong ones are structured, include a mentorship component, emphasize continuing education, and offer feedback for improvement prior to a decision to terminate a work arrangement.
Without a doubt, hiring is hard. Employers who get it wrong pay a hefty price. But hiring might also be the area where companies have the greatest chance to differentiate themselves. Attracting A-players, improving companywide communication, and honing the company’s culture can all be accomplished with a better hiring process. If those things aren’t worth the investment, what is?…..