Effective hiring is a key tenet of success for almost every business. Bringing new talent into your organization will allow you to grow, whether that means making more or better products, reaching a wider audience, or expanding your offering.
Sometimes, hiring isn’t about growth but continuity—it’s a fact that owners and managers must face that often the best employees often move on to bigger and brighter things, no matter how great your company is to work for.
Few decisions, therefore, are more important than who to hire. The repercussions of a wrong decision can be wasteful at best and disastrous at worst. By considering the efforts involved in the hiring process, we can see the true costs of hiring the wrong employee. From there, we’ll look at what information you need to ensure that you get it right the next time around.
The costs of hiring the wrong employee
Poor hires cost time and money across your business
Hiring an employee is, for all but the smallest businesses or most basic roles, a complex and time-consuming process. First, the need for a new hire has to be identified, reported, and often justified. Then HR begins the search: gathering requirements, writing a job specification, advertising the role, and screening candidates.
Interviewing employees will typically require time not only from an HR professional but the hiring manager and other employees providing their opinions. Conducting any more than a handful of interviews will typically require hours or even days where these employees aren’t contributing directly to the company’s bottom line.
When a candidate accepts the job, HR departments have further administration to complete, and then there’s the time required by supervisors, colleagues, senior management, and others in onboarding the employee, covering them while they get up to speed, and evaluating their performance.
Add in the costs of recruiters, interview reimbursements, equipment, and joining bonuses, and it’s no wonder that the costs of replacing an employee are estimated at 30-50% of their annual salary, which will typically run to a five-figure sum—not something many businesses can take lightly.
Damaging team morale may be the biggest cost of poor hires
95% of CFOs agreed that a poor hiring decision affects the morale of the team, and this impact was the biggest concern respondents had about hiring the wrong employee – ahead of both productivity loss and the costs involved. Perhaps not surprising when morale has been linked to everything from employee turnover and customer satisfaction to workplace safety.
The information you need to hire well
Now that we’ve explored how damaging hiring poorly can be, it’s clear that making the best decisions when it comes to recruiting new staff is a valuable skill. And information is one of the most important assets when it comes to making an informed decision on who will fit in at your company.
Take the following steps to ensure you have all the necessary information at your disposal during the hiring process.
Know the job requirements
Having identified the need for a new employee, take the time to explore, understand, and properly describe the role, its responsibilities, and what skills are necessary to undertake it. This is especially true of technical roles where at least a basic grasp of the required skill sets will be necessary to make an informed hiring decision.
Consider the more general details of the post—are you looking for a part-time or full-time position? Does your company promote from within, making leadership potential a desired trait for all new hires? What level of experience are you after and do you have the budget to offer a salary that matches that?
Asking these questions early in the process will make subsequent steps, from writing the job advertisement to evaluating their performance after joining, far easier.
Use the requirements to create a clear job description
The details you’ve gathered above will form the basis of the job description, but there is a balance to be struck. You want to inform candidates of what’s expected without overwhelming them with information—a clear, succinct post will attract more applications and thus a wider pool of qualified applicants.
Be sure to communicate any firm minimum levels of qualifications or requirements—this will cut down the number of under-qualified applicants and save you time. Have a staff member in a similar role review the description to check it matches the reality of the job.
Understand how to reach your target talent pool
There isn’t a single place you can advertise that will reach all the best candidates for a job. Be sure to consider what channels you use to promote the opening, considering that the majority of job searches are performed on mobile in almost every major market. Mobile optimization is a must for any job post.
If you’re after a highly specialized role and are willing to pay for the right person, you might want to consider headhunting someone specific. Typically this is done through recruiters, though the popularity of professional social networking sites and the tools to trawl them means this is a DIY option as well.
Gather other informed opinions
Hiring takes a lot of people to do well, and the final decisions should be no different. Gathering opinions on candidates from their potential colleagues or even external experts is an effective way to avoid biases and make the best-informed decision.
References are another source of valuable information. Don’t neglect to ask for references from previous employers and follow through in contacting them. Even personal references can offer up insights into personality types that may or may not be a good fit for your business.
Learn how candidates perform in the role
You needn’t wait until a new hire has started to learn how they might be able to handle the role. Use your interview process to put candidates into situations they’ll be expected to handle and evaluate how they perform. This could mean a mock presentation or a practical demonstration that mimics the real responsibilities of the role.
Also consider taking promising candidates on a trial or probationary basis. While their first few days may be mostly taken up with onboarding and admin, it’s reasonable to expect that they start showing the skills within a few weeks of beginning work, and your deep understanding of the job requirements puts you in a strong position to assess how well they’re adapting and contributing.
The more information you have when hiring, the better
Information is a crucial resource and by preparing properly for a thorough hiring process, you stand the best chance of using that information to your advantage and making a great hire.
Ready to start making better hiring decisions? Get a demo today to learn how you can get the data you need to get to work.