By Jenny Sherman, SPHR CCP, Director of HR Services, Trupp HR.
"On average, companies that did a better job of attracting, developing and retaining highly talented managers earned 22% higher return to shareholders."
Given the abundance of highly skilled candidates available in today's job market, it may be surprising to hear that many employers are making poor hiring decisions. In a 2012 survey sponsored by CareerBuilder, 40% of nearly 2500 participating hiring managers and HR professionals claimed to have made a poor hiring decision. These numbers are startling because hiring the wrong person for a position is very expensive for an employer. The survey estimated the cost of each failed hire to be from $25,000 to $50,000 to the employer. These numbers include costs from lost productivity, bringing a replacement employee up to speed, the impact of turnover on the team, and so on.
Great Hiring Decisions Deliver Greater ROI
In the book “The war for talent,” published by Harvard Business School Press, the authors write: “On average, companies that did a better job of attracting, developing and retaining highly talented managers earned 22% higher return to shareholders.” Successful managers have learned that making great hiring decisions will reduce the cost of doing business as well as improve the returns on their people investments.
The CareerBuilder survey identified probable causes for poor hiring decisions as “pressure to fill jobs quickly,” which was reported by 43% of survey participants. Another cause that was cited by nearly 25% of the survey participants was not getting enough information about a job candidate before they hired them.
Interviewing for Success
Using best-practice methods to build comprehensive selection criteria for your job openings is the first step to a successful hire. The next step is to construct behavioral based interview questions that investigate a candidate’s talents around these selection criteria. Finally, evaluate the answers obtained and objectively rate each candidate against the job needs. Following these simple techniques can significantly increase a hiring manager’s success. It is important to investigate the technical skills for the role as well as verifying competency in customer service, teamwork, and a genuine enthusiasm for their work.
Hiring managers should avoid common pitfalls in selecting staff. Without clearly defined criteria, it's easy to be influenced by personality similarities, shared hobbies, stereotypes or initial impressions. A good interview requires setting aside any personal biases and applying critical thinking to the process – skills we are probably already using in other critical purchasing decisions.
Increase your success with these simple strategies. Hiring great employees is the first step in being a great manager able to achieve better business returns. Employees who are well-matched to their job will bring greater energy and interest to their role and will apply more innovative skills.