I frequently have conversations with business owners about a wrong hire experience. The story goes that they realise fairly quickly that they had made a mistake; that it was a wrong decision to offer a job to that new joiner within months or sometimes weeks of them starting to work together.
With the pain of realising that big mistake comes the regret of all the time and energy spent recruiting and hiring them. And once they decide to terminate the employment, they are then having to face the ‘annoying’ tasks of having to communicate the bad news to the new member of the team. Let’s not even mention the worry and stress accumulated – since there are legal and financial risks associated if the dismissal goes wrong.
Considering job ad cost, time spent shortlisting candidates, time spent on interviews and organising interviews, lawyer fees and training hours, the cost of a bad hire is estimated to be as high as 3 times the employee’s annual salary. This is without considering any legal claims that could result from a wrong dismissal.
According to a recent article from the Human Resources Director, the cost of a poor recruit has increased due to the global COVID pandemic.
64% or two in three hiring decision makers say the negative impact is “more severe now than it was a year ago”.
How exactly is poor recruitment affecting businesses?
- Time is wasted in hiring and training the new employee (33%)
- Team morale and productivity decrease (27%)
- The stress levels of supervisors increase (20%)
Hiring is not easy, it is “the single biggest problem in business today” according to The Economist. Getting it wrong is painful and frustrating, but there is some good news.
In order to increase the success rate, you can implement a structured systematic approach to avoiding common hiring mistakes.
1. Create a scorecard
You first have to be clear on what you expect from this role, what success will look like, what goals this person is coming to achieve for the business. With the end goal in mind, you should create a document that defines the very specific skills and expertise you need and why you need them. This document is called ‘Scorecard’, which you will then also be able to use when assessing the performance and success of the employee in the role.
A Job Scorecard (employee scorecard) is used internally when interviewing candidates and it can also be used for coaching existing employees. The Scorecard sets expectations around goals and results expected. Following the successful hire of a high performing candidate the scorecard also serves as the framework for managers and their direct reports to rate performance. It is a coaching document that helps identify opportunities for development and improvement. It can be used quarterly, annually, or whenever you need to have a conversation about performance with a staff member.
According to Gallup, only about half of workers in companies worldwide “strongly agree that they know what is expected of them at work”.
2. Have a detailed job description
The next step is to craft a detailed job description. These documents will give you good information to create a Job Ad to source the right candidate.
A good job description tells the candidate what the position may involve or require. After reading the job description, some candidates could decide that they are not interested in the role or they are not a good fit for the position.
52% of jobseekers say the quality of a job description is very or extremely influential in their decision to apply
3. Build a pipeline
You should be on the hunt looking for talent, systematically. building a pipeline is constantly recruiting. So when you do actually have an available vacancy in your company, you will already have some good candidates identified and lined up.
Actively recruiting can be done in various forms, it doesn’t mean posting jobs all the time.
Having conversations with as many people in networking events, keeping in touch with candidates you interview that may not be suitable for a specific vacancy you advertised but may be good for a future role later on, and referrals from your own network or your current staff members.
4. Improve quality with an Employee Referrals Program
Hiring through an Employee Referral Program is actually four times better than hiring complete strangers, since referrals tend to stay double the time longer in your company and have the sourcing cost since you don’t have to advertise for the role and spend time screening and shortlisting candidates.
88% of employers say that referrals are the #1 best source for above-average applicants
(Dr John Sullivan research)
55% Referred candidates are 55% faster to hire, compared with employees sourced through career sites.
(Source: HR technologist)
5. Have better interviews
The first conversation with the candidate is over the phone. The recruiter or HR books a 30 minute phone call asking questions to understand if it is worth interviewing the candidate further. For efficiency, it is recommended you have an interview framework. This should be a set of specific questions that allow you to select the right candidate which are based on the scorecard created. Overall, you are looking for that person that will achieve those goals.
If successful, the hiring responsible can schedule a minimum 1 hour interview with each of the few selected candidates. From my experience most business owners want to nail an interview in less than 45 minutes, however this time is not sufficient. You want to take your time to have an in depth conversation where possible, you want to be listening for themes and patterns. Trust me, the more you rush it now, the more you will regret it later. During my many years of recruitment experience, I have witnessed this and even been guilty of this myself because I didn’t have enough time in my schedule.
It is very important to dig deeper, get to learn about the career experience from the beginning, understand how the candidate thinks and operates, how they build business relationships, and ultimately if they will genuinely be able to achieve the goals you are hiring them for. The more senior the role, the longer the interview.
More than half of recruiters and hiring managers agree that the average number of interviews before getting a job is three.
According to 51% of recruiters, the best candidate is found after three interviews.
Finally, make sure they meet the team and have a final round interview with them. The team can interview on each of the core responsibilities to evaluate if the candidate will achieve desired outcomes if they perform the role. These are ‘Focus interviews’ and will provide great feedback and value to enable you to make a final hiring decision.
5. Reference Checks
Many companies skip this step due to the lack of resources or due to believing there is no point in conducting reference checks. However, reference checks are essential and a good tool for making hiring decisions.
The reference checks help you gather further external feedback about the candidates you are hiring and will help you at least get a bit closer to predict if they will be a good fit for the business. Effective reference checks can also help mitigate the risk of fraudulent applications and increase the likelihood of selecting a candidate who is the best possible fit for your company.
According to the NSW ICAC,
between 20-30% of job applications contain some form of false information. This could range from minor omissions of information to some serious false information.
Also, reference checks can help distinguish candidates who performed well during the interview but may not have the qualities or skills that you need for the candidate to be successful in the role.
I always recommend to my clients to obtain two to three reference checks for junior roles, and four or more for senior roles. For very important roles or Executive positions, even speak with referees outside of the ones the candidates provided.
To increase the success rate when hiring, you need to have a systematic process in place and make sure you dedicate the time required. It is important to be clear about the skills required and plan a roadmap of success for the role, and then reverse engineer with the techniques shared above.
If you need help implementing any of these tips, get in touch today for a chat.
We can either free up your time as your specialised Talent Acquisition Specialist managing the end to end process or as your HR agency providing you with the templates, resources and advice you need to hire the best candidates.