How much time and money does your company spend reevaluating an open position, creating the job description, fielding unqualified candidates, interviewing great candidates, negotiating salaries with the top people, training new hires and struggling the first three months to help make that new employee a successful asset to your business? Answer, too much to have them leave within the first 1-2 years!
When starting to think about the new hire process, spending money to work with a professional recruiter will ultimately save you time AND money in the long run.
- Cost of hiring a new person (advertising, interviewing, screening, hiring)
- Cost of onboarding a new person (training, management time)
- Lost productivity (a new person may take 1-2 years to reach the productivity of an existing person)
- Lost engagement (other employees who see high turnover disengage and lose productivity)
- Customer service and errors (new employees take longer and are often less adept at solving problems). In healthcare this may result in much higher error rates, illness, and other very expensive costs (which are not seen by HR)
- Training cost (over 2-3 years you likely invest 10-20% of an employee’s salary or more in training, that is gone)
- Cultural impact (whenever someone leaves others take time to ask “why?”).
Some of the interesting things to consider:
- Compensation plays a role, but not as much as you may think. All the experience we have shows that for mid-performing people compensation is a “hygiene” factor – too little money will definitely create high churn, but over compensating people won’t make up for a poor work environment.Of course in sales and other highly competitive positions compensation is critically important, but it is by no means the only driver.
- Job fit is critically important. For years companies have talked about the “employee value proposition.” In reality there is a “job value proposition.” Are you attracting the “right people” for each job? Some jobs are particularly demanding (ie. consulting roles where travel is intense). If you honestly explain these roles and their positives and negatives you will attract people that “fit.” If you over-sell the job you’ll suffer high turnover.
- Career opportunities matter. Today most companies are going through a “crew shift” as boomer generation employees retire and millenials and young people enter management and high value positions. Younger folks are motivated by growth, career opportunity, and meaning. Our research several years ago showed that while young people want the same types of benefits and work-life balance as older people, they are particularly focused on fun, collaboration, and the ability to be with others they enjoy. So the prospect of a “career” is more than just advancement (which was the way I was raised).
- The work environment matters. We’ve done lots of research over the years on recognition, engagement, leadership, and management. It all shows clearly that people at work respond through Maslow’s Hierarchy of Needs. Once they are “safe” – ie. paid well, they look for more meaningful value at work. Is this work taking advantage of my skills? Do people appreciate me? Is the environment inclusive and diverse so that I feel that I fit? Does this company do work I feel proud of?These “non-compensation” and “non-job” factors are bigger than ever now. We’re going to be launching new research on the employee value proposition in the coming quarters and all evidence shows that we have to think about our organizations as a “system” which engages employees. The CEO sets the tone and leadership plays a role, but so do all these other cultural and human aspects of the workplace.
When working with a recruiter, outline the top traits personality traits fit your company and the daily job duties for this position, then sit back and get ready for the BEST candidates to be presented. Yes, everyone will shy away from a recruiter fee at first, but when you step back and look at the overall picture you will save money.
Recruiters will find the most qualified candidates for your position; no more sifting through the 20 unqualified resumes that end up on your desk for the ONE that might be worth calling. Also, a recruiter will have the conversation and intense screening process to ensure each candidates is ready to make a move and invest in your company, no more yearly turn over! These people are committed to coming to your company and staying for the long haul. Throughout the entire hiring process your recruiter will help buffer any concerns, questions and negotiations that you or the candidate come across, while keeping each party happy and excited about this new employee.
No more 10-20% loss every 1-2 years for each new employee. Spend the 30% once and retain a new hire for 5, 10, 20 years. Sounds like a good trade off to us!
For more information about our recruiters at Kaye/Bassman visit www.kbic.com