Why is seven out of ten the worst score ?
If you were to score your team out of ten what would score would you give them ?
What about the individuals in that team? I would expect there to be a range – from the 5/10s; who will not be around for very long, to the 10/10 superstars. And before you claim you have never hired the wrong person Recruitment Agency Bond Williams reports that;
“85% of decision-makers within HR admit their organisation has made a bad hire.”
They might not have been spectacular fails, but all those 7/10s are potentially costing your business a lot of money.
Career Builder reported:
27% of companies say a bad hiring decision cost them over £50,000
23% of employers reported a loss of productivity
22% negative effect on morale
16% negative effect on customer relations
12% reported fewer sales
So, what constitutes a bad hiring decision?
That will depend on your personal definition.
The glaring mistakes are easy to spot and tend to take care of themselves quite painlessly and quickly – the lack of fit is just so obvious to one side or the other. But someone who is a 7/10 has so much potential – they are nearly there. And if we tweak the job here, and add in some more training, a bit of mentoring, some adaptations over there.
And just a bit more time….
Rebecca Wilson writing for Recruitment International points out that;
“It’s worth remembering that a bad hire can simply be the wrong fit even if they have the necessary skills for the job. An incoming employee may fail to assimilate into the company culture or have an approach to work that jars with those of everyone else.”
Which encourages everyone to keep trying to fix the problem even though as we can see it will be impacting morale, customer relations and sales.
Forbes reports that; “Since Gallup began tracking employee engagement in 2000, less than one-third of U.S. employees report being enthusiastically involved and committed to their work.”
The figures for the UK are not dramatically out of step with this.
So why don’t we tackle people who are 7/10 for job performance?
In my case, running a large training firm, it was because I felt I could not guarantee that the next person would be a better fit, so it was better to stick with the devil you knew.
A 2019 study of UK staff turnover rates by XpertHR shows how quickly the costs per person can add up to a significant profitability issue for many businesses.
If the average call centre contains 123 agents the average cost to the business each year from staff turnover can be as much as £400,000.
Having run my own firm for many years I know that we would budget for the actual costs we paid to recruitment agencies, and focus on that when looking to reduce the cost per hire. While we would come up with many schemes for trying to reduce staff turnover we never really looked at radically changing our recruitment process.
Our process involved vetting CVs against a rough model of backgrounds and experiences which had worked well in the past, combined with multiple interviews with different staff members and various practical and knowledge tasks. That gave us at best a 70% success rate.
As all the recruitment articles point out, the biggest costs are not the disastrous hires who last 5 minutes, but the people who are the 7/10s who stick around for years. Year after year you are sacrificing that 30%.
At this point when we have millions of people furloughed and ever rising unemployment it would be easy to conclude that this is not today’s problem. But we can already see an increase in people applying for new jobs, all the uncertainty is pushing people to try new things, and for many the thought of going back to the same office after four months at home is not a happy one.
So, what can we do about it?
A tool I wish I had access to back then is Harrison Assessments. Harrison Asessments uses the latest predictive analytics to help recruiters identify the behavioral traits and preferences that make people successful (and happy) in the work they do. The assessments give you data about a person that you cannot get by any of the other assessment methods; an understanding of what makes people tick and their true strengths. Often we don’t know how brilliant we are in a particular area because it just hasn’t come up in our life before; we don’t objectively understand our own strengths and weaknesses.
By comparing traits and preferences for a specific job to the applicants we can create a much better selection process. We need never recruit a 7/10 again; well unless you are truly desperate, but at least you will know you are getting a 7/10.
The detailed reports which the Harrison Assessment system can produce will show you where a candidate is a poor match for the role so you can talk about it at interview and devise engagement or reward strategies which might create more positive outcomes.
At Be Astute we devise cost-effective recruitment strategies to help businesses of all sizes make better hiring decisions and reduce the hidden costs behind the 7/10’s.
Contact me at julia@be-astute.co.uk to find out more.
Sources:
https://www.recruitment-international.co.uk/blog/2019/08/the-real-cost-of-a-bad-hire
https://bondwilliams.co.uk/how-much-hiring-the-wrong-person-is-costing-your-business/
https://www.americanprogress.org/wp-content/uploads/2012/11/CostofTurnover.pdf
https://www.e-days.com/news/employee-turnover-rates-an-industry-comparison
Julia Stock June 2020