It is hard to overestimate the high stakes of recruitment.
The financial impact when hiring decisions go wrong can be shockingly high. One research firm determined that it costs approximately $240,000 to recruit, hire, and onboard a new employee and the cost of executive failure can be more than ten times their base salary. The recruiting process is costly, given the time and resources involved. It also diverts your existing team’s attention from their primary job duties as they assist in interviewing and training, which results in lost productivity. And the non-financial impacts can be even more costly. The wrong skill sets and high turnover can compromise your ability to achieve your company’s mission.
If you later determine that the new employee isn’t going to work out, you have simply wasted a lot of time, money, and effort. Zappo’s CEO Tony Hsieh famously estimated that he has lost $100 million by making bad hires!
The Ripple Effect
You may have heard the adage, “talent begets talent.” Well, the “bad apple syndrome” is also very real. When you recruit, hire, and train the wrong people you lose more than money, time, and effort. You may experience:
- Lost customers due to poor service or service interruptions
- Decreased office productivity
- Declining staff morale and workplace stress
- The expense, hassle, and possible legal fees associated with a firing
- Lost background check, relocation, and training costs
- Lost job marketing fees and related staff time
- Disruptions due to incomplete projects
- Weakened employer brand
On top of all of that, disengagement is contagious, and poor performers lower the bar for everyone. You may even lose good employees who burn out trying to take up the slack for bad ones.
Hiring and Retaining Great Employees
For all the reasons outlined above, no one wants to deal with the effects of hiring the wrong person. We recommend the following four steps to ensure that your company is well-positioned to hire top talent:
- Engage outside recruiting experts to help you take a strategic view of the talent landscape.
- Treat your HR department as a strategic partner in making business decisions.They should be more than just an operational or tactical function.
- Build talent from within. Mentor and counsel junior associates up the career ladder.
- Invest in strategic talent management to ensure you have the talent in place to execute on your business plans.
The stakes are indeed high in recruiting. But by keeping a strategic mind-set, and following the four steps to hiring and retaining great people, you will be able to attract and keep the top talent that can take your business to the next level.