“I am convinced that nothing we do is more important than hiring and developing people. At the end of the day you bet on people, not on strategies.” – Larry Bossidy
Hiring the right help is a hot topic. It is critical to the success of any organization. When we hire well it increases morale and success and when we hire poorly it costs us allot! Let’s first look at the cost of a poor hire.
The Cost of Bad Hiring Decisions
The Harvard Business Review points out that as much as 80% of employee turnover is due to bad hiring decisions.
The Labor Department estimates it can cost on average one-third of a new hire’s annual salary to replace him or her and that those costs increase the higher up in the organization the turnover occurs. In some cases, it can total in the millions of dollars if that person is the CEO.
According to a study by the Society for Human Resources Management (SHRM), it could cost up to five times a bad hire’s annual salary. SHRM also found that the higher the person’s position and the longer they remain in that position, the more it will cost to replace him or her.
Recruiters say if you make a mistake in hiring and you recognize and rectify the mistake within six months, the cost of replacing that employee is still going to cost you two and one-half times the person’s salary. That means a poor hiring decision for a candidate earning $100,000 per year could cost, on average, $250,000, and that expense comes right off the bottom line.
The cost is not only financial. A bad hire can tank your entire team. They can undermine trust, and distract the talent on your team – leading to poor performance for everyone. So how do we hire well? What are the best practices to hiring the right help? I recommend the following seven-step hiring process that we have found works exceptionally well.
How to Hire the Right Help
1. Take your time. When we rush, we make rash decisions that end in regret.
2. Network. Sometimes the best hires are right under our nose. Ask top performers on your team and outside your organization. “Birds of a feather do flock together”. Top performers know other top performers and a strong referral is always the best place to begin a hiring consideration.
3. Ask good questions. According to the Vanderbloemen Search Group here are the top ten questions to ask a new hire candidate.
Why are you looking for a new job?
How would your friends describe you?
What are your two greatest weaknesses?
How do you cope with stress?
What goals do you have?
Is your work environment important to you?
How do you handle conflict?
How do you stay organized?
When have you gone the extra mile?
How do you develop team members and volunteers?
4. Use assessments. Assessments are invaluable in a hiring process. The DISC assessment can help you understand the behavior style of a candidate to see if they are the right match for the role you need them to play. Other assessments like the Emotional Quotient measures a person’s level of emotional intelligence which is so critical to how well they will mix with the team. There are other assessments to help measure selling skills, attitudes and values and much more. If you contact our office (541) 728-0601 we can assist your assessment needs.
5. Leverage your team. Have your top performers meet one-on-one with your top candidates to gain their evaluation and see first-hand if the person will mix well with your existing team members.
6. Test drive before your buy. A popular approach today is for top candidates to demonstrate their talents and abilities before they are hired. Organizational leaders set-up live tasks and duties similar to the popular Apprentice TV show and invite their top candidates to see how they perform. They provide feedback to each candidate as they are progressing through tasks and usually the right candidate for the job emerges.
7. Get the full story. Depending on the role it is recommended that you interview a candidates spouse or key relative as well as their former colleagues. Family members have the most history of a candidate and you will learn critical background information that colleagues usually do not reveal. They provide character background as well as critical events and interests that make up the person you are considering.
The health and long-term success of your organization will be determined by the people you put in place to run it. My recommendation to you is be patient and diligent with the process presented today and the right person will emerge.