Many business owners consider outsourcing recruitment to be an expensive and needless measure. However, many business owners also reverse this opinion when the true cost of a bad hire is revealed.
Business Review Australia recently published survey results that indicate a bad hire can cost a company up to two and half times the salary of the employee in question. This essentially means you are paying the salary of almost three employees whilst receiving one incompetent one. An employee on a salary of $50,000 who turns out to be a bad hire, can lead to a potential monetary loss of $125,000 per year to the company.
But bad hires have consequences far beyond those that are monetary. A recent study in Australia by Human Resources consulting firm Robert Half confirms that negative effect can be seen in almost all areas of a given business. This can include low staff moral, poor efficiency, strained client relations and damaged reputation. Ultimately, a bad hire is likely to affect the total culture of your business.
“If you think that hiring professionals is expensive, try hiring amateurs”
~ Red Adair ~
In today’s globalized and fast-paced business landscape, it has become clear that finding the right staff is more important than ever. Emergent platforms such as Seek and LinkedIn have revolutionized hiring practices. Job hunters can see postings and apply within minutes. The result however, is that businesses face pools of applicants much larger than in the past. Finding the needle in the haystack is the way of modern recruiting. In order to do this, business should be looking for candidates that meet two specific criteria: Eligibility and Suitability.
Eligibility defines the qualifications, education, experience and skills needed to proficiently fill a given role. Whilst this is obviously essential, it’s only half of the story. If an employee is going to be profitable he or she has to match the Suitability criteria of your business. This refers to the right behavioral fit. He or she must align with the values and attitudes of your business. Employees need to be motivated and enthusiastic about their role.
A study by Leadership IQ of 20,000 new hires over 3 years, found that 46% of the people hired would fail within the first 18 months on the job. This wasn’t because of a lack of skill, but an absence of suitable attitudes. The difficulty is, Suitability can’t be measured or foreseen from the pile of CVs that employers often find clogging their inbox and covering their desk.
Unknown to many, there is an exemplary solution to these recruitment issues – The Harrison Assessments Training System (HATS) is a professional recruitment system. For over 25 years HATS has helped organisations hire, develop and retain top talent, thereby facilitating optimum growth and profitability. The boundless costs of a bad hire can be avoided by using this system that takes into account 1,175 traits in order to measure cultural fit, values, personality and job. It incorporates SmartQuestionnaire™ that performs over 8,000 cross matches and cannot be fooled. Alongside this runs Paradox Technology™ that takes into account that human beings have a complex combination of paradoxical traits that need to be properly balanced to ensure optimal job fit.
Armed with this recruiting tool, your business can guard against the huge financial hit of a bad hire. Moreover, the less tangible expenses such as damaged morale, reputation and internal business culture can avoided. In conjunction with the right guidance and training, this technology can assess a candidate’s qualification, behavioral fit and development needs, providing businesses optimal levels of employee engagement and retention. Suddenly the idea of outsourcing recruitment professionals doesn’t seem so bad.
Sean ‘Recruit Right’ Martyn
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