Avoiding the ‘cost’ of a Wrong Hire

Successful recruiting is a goal of all organisations. Their talent management teams evaluate a candidate's résumé and professional background in detail to determine whether they are the ideal fit for the company. Most of us have probably encountered circumstances where a senior resource had failed to live up to the expectations after joining. While this expectation mismatch can occur at both junior and senior levels, the problem becomes particularly serious when a senior level hiring is made incorrectly. I am thinking of a senior resource is someone who comes in to manage a section of the business and has more than a decade of expertise in the appropriate sector. No organisation wants a slip-up like a bad hire to jeopardize the growth of their business.

?As per a Forbes report and according to the U.S. Department of Labor, the price of a bad hire is at least 30% of the employee's first-year earnings.[1] Poor hiring decisions can lead to lost productivity and costs associated with recruiting, hiring, and training replacements.

?Here are some well-practiced tips that can be implemented to avoid making the wrong hire:

?1.???Clear job description – It is extremely critical that the job description is precise and comprehensive to attract the best candidates. Determine the qualifications and skills that your ideal applicant for that particular role would possess. This encompasses personality attributes, soft skills, and technical skills. To further improve accountability and execution for a better job description, it is crucial that hiring managers and recruitment teams be given the freedom and made accountable in the relevant stages of the process.

?2.???Longer Runway- We anticipate that the resource will function in accordance with the 30-60-90 day schedule! Many times, it doesn't work out that way, and the whole ecosystem is affected. ?If the new employee comes from a company with a different culture than your own, the effect will be more noticeable. If a person transitions from the public to the private sector, that would be an extreme situation, since he has no prior experience of the place, and there are many possibilities in between. The value of culture is never more evident than when a resource is misaligned with the organization's ethos.

?I believe the best approach to avoid such a scenario is to provide a longer runway/path to the candidate, such as 150 days rather than just 90. If the resource is facing any challenge, it will become apparent in a few weeks, and the leader should personally interact with the candidate to sort it out and assist in taxiing for a clear take off. In such cases, the hiring manager has a very significant role to play in coaching, mentoring, and guiding the new employee to a clear take-off, as there is a propensity to write off the new recruit in the first few weeks and seek a replacement,

?It depends on the organisation, the situation, and the length of time it takes to settle down and show interest in aligning with the organisational guard rail. One such instance is the current issue involving UK Prime Minister- Liz Truss!

?3.???Know the resource – The recruiting manager must conduct a complete ‘know the resource’ walkthrough, just as bankers conduct a thorough ‘know your customer’ exercise. The more critical is the position to be fulfilled, the more detailed the walk through should be. This is where social media platforms like LinkedIn can be utilized. We should leverage the power of networking and identify the right resource, because the feedback carries more insights than the person’s two-page CV.

?According to CareerBuilder, nearly three-quarters of organisations that made a terrible hire, lost an average of $14,900, with 74% of employers stating they hired the incorrect individual for the position.[2] In my personal experience, I once failed to undertake due diligence and paid dearly for it. To gain a better grasp of the resource, I now spend more time conversing with ‘common’ or ‘new’ contacts. In all fairness, the new resource also deserves a fair playing field and a thorough understanding of his/her journey will assist the recruiting manager in designing the guard rails.

?4.???Give a smaller piece to chew -Alternatively, assign a smaller project to test the resource. The project should include enough challenges to put the resource's skills to test and prove their worth. Even their business problem-solving abilities may also be evaluated along with it. In essence, the ‘smaller piece’ should serve as a representative sample of the resource's ‘portfolio of deliverables’ to ensure that this assignment and the longer path in the company, work together seamlessly.

?The incorrect hiring is a severe issue in organisations since it affects the company’s as well as the team’s overall productivity and might progress to chronic symptoms if these concerns are not recognized and addressed timely. Poor hires disrupt the company's strategy and cost a lot in wasted management and talent hours. Hence, it is in our best interests to be cautious before bringing in such resources to the organizations. Are these workarounds fail-safe? The jury is still out!

?Disclaimer: The views expressed represent my personal opinions and do not necessarily represent the position of EY.

?References:

1 The True Cost Of A Bad Hire -- It's More Than You Think (forbes.com)

?2 ?The Cost Of A Bad Hire And Red Flags to Avoid (2022) (apollotechnical.com)