Today, businesses invest significant time, effort, and capital into hiring, hoping and praying that their algorithms and comprehensive checklists will magically help them find the right candidates. And yet, nearly three in four employers say they've hired the wrong person for a position.
Organizations still have the same complaints they had ten years ago — people are leaving, the number of bad hires is still high, and they're burning through cash. In fact, according to The United States Department of Labor, the cost of a bad hire is around 30% of the employee’s wages for the first year.
But it's not just about money. Another study showed that 34% of CFOs believe bad hires cost them productivity because managers have to spend 17% of their time supervising poorly-performing employees. If you consider a standard workweek, that translates to almost an entire day that could have been spent on actual work!
Given the above data, it's no surprise that 75% of CEOs reported that they were concerned about whether they would have the talent they needed.
So, where are businesses going wrong?
Companies that still do their own hiring, rather than working with recruitment agencies to scout for talent, often use an Applicant Tracking Software (ATS). The ATS electronically sifts through applications for keywords and employs an array of intelligent tools and Machine Learning algorithms to predict who will be a good hire.
While that sounds like a relatively straightforward and efficient process, there's actually one big problem. According to reports, only a third of U.S companies evaluate and monitor whether their hiring practices lead to good employees. Further, only a fraction of businesses track critical metrics like time-to-hire and cost-per-hire.
In a nutshell, businesses deploy state-of-the-art software, create elaborate job descriptions, and conduct multiple interviews to elevate their hiring process but don't evaluate the results to see if it's actually working.
How can you fix this?
Before you go in and make changes to your hiring approach, it's essential first to evaluate your existing systems. What's working? What's not? Are you using the right ATS for your business? Are you using appropriate candidate assessment tools? Is your recruitment process bringing in suitable candidates? These are all super important questions that need to be addressed at the earliest.
Once you've determined what's not working, the next step is to make some changes. Here are a few key areas that you can focus on:
1. Create an accurate job description
While this may seem like a no-brainer, most organizations fail to create a JD that describes the responsibilities of the role as accurately and honestly as possible.
What sets apart a good JD from a great one is that the latter has more than just an exhaustive list of duties. Instead, it describes the overall purpose of the role, key areas of responsibility and doesn't oversell the position either. This, in turn, ensures that the employer and the candidate are on the same page.
2. Focus on internal recruiting
Sometimes, the best candidates could be right under your nose, already working for your organization. Not only does it make economic sense to fill roles internally, but it also significantly cuts down the time-to-hire.
Further, an existing employee is already familiar with your organization's vision, mission, and values. And so, getting them up to speed will be a lot easier. It also does wonders for your employee retention rates.
3. Don't dwell too much on skills
In reality, the best hires aren't always the ones who fulfilled every single parameter on your checklist. In fact, some may be nowhere close to what your organization wants.
However, sometimes, it's more about finding a person that's the right cultural fit. Does the candidate's core values resonate with the company's? Do they display the willingness to learn and grow alongside the organization? These questions are often more critical than "Can they write error-free code within 24 hours?".