The Cost of a Bad Hire


Executives occasionally lament over the steep cost of engaging a search professional to conduct a search for talent. Perhaps this is due to their prior experience where things didn’t turn out so well. When done right, a professionally placed hire should yield measurable results that justify the expense. In some cases, the results are lacking and beg the question, “What was my ROI?”

Results are the key to everyone’s success. Good results and everyone is happy. Bad results and no one is happy.  A recent study showed that the cost of a bad hire was roughly 15X the employee’s annual base salary. This includes both hard costs and loss of productivity. Companies should expect a good return on their recruitment spend if they do it right.

What is doing it right? First, it is selecting the right firm to conduct the search. Second, it is trusting your firm to know the best way to attract the individuals that they have prospected for you. Third, and equally critical to the outcome,  EXECUTION!  The executives and Human Resources team must be sure to deliver the goods in every respect. If you have a target candidate and your search partner informs you of the best strategy to be successful, listen to them and execute to their specifications. Nothing is worse that getting to the end of a search, vetting and interview process only to lose the person you felt best could lead your company into the future.

Scores of companies miss out on hiring the best person because their process is too cumbersome or convoluted. When you make the investment to retain a firm to find top talent, it is your job to support their efforts or you will fail in the most important part of any company’s growth; hiring the best people.  Before you engage a search firm, be sure to fully vet them so that you can put your full confidence in them to provide  accurate, timely and well informed information. This is one key in avoiding a bad hire.

If you think it costs a lot to hire the right person, consider the enormous costs of hiring the wrong person.

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Technology: And The Marginalization of Recruiters


With the advent of the Internet, many suspected that it would change the way companies recruit talent. It is impossible to deny the dramatic changes that have been seen with online capabilities from job boards like meddevicejobs.com to individual company career web pages and social media. These innovations have enabled previously unattainable reach by candidates and recruiters, both agency and internal. Newer web apps like Jobfox and Bounty Jobs have pushed recruiters further to the margins of the recruitment process and many are being relegated to that of little more than a data miner.

Technology has put us in direct competition with our clients. So what is a recruiter to do? If you want to, you can still make a living playing from the margins. Of course, in order to do this effectively, you must work on a higher volume which means spreading yourself thin and compromising quality. Working on higher volumes means you have no choice except to take significant shortcuts in the recruiting and vetting process. If you disagree, perhaps it’s because you’ve only known one way of working. Many recruiters fail to recognize how this approach actually undermines their own value to their clients. This is an undeniable fact. Yet, for some, that is a way of life and they will defend it to the end. Here’s the problem, if you have to worry that either your clients or another recruiter may find the same candidate you did online, you are in trouble unless you are a glutton for punishment or really fast on the draw.

Essentially, you are in a race with your client and or other recruiters for the active candidates on the open market. You are being marginalized because you aren’t bringing them anything that they cannot get by themselves. Sure some clients don’t have internal recruiters and that is your saving grace. If they did, they wouldn’t need you anymore at all. This is by definition, “Marginalization.” And because so many recruiters have been relegated to these margins, they are little more than researchers or data-miners. As the internet becomes more evolved and newer applications making data mining resumes easier, recruiters will become less necessary driving their fees lower still.

If you are working on contingency, you are more than likely being marginalized. The solution to your problem isn’t doing more placements, but in elevating your game and distinguishing yourself as a solution provider rather than a mere data miner. If you stay where you are, you’ll be lucky to stay in business as technology continues to take over.

 

7 Signs You are a Marginalized Recruiter


I’ve been writing about the marginalization of recruiters and thought I would put down the signs that you can use to evaluate whether or not you fall into that category of recruiter. Technology plays a significant role in the marginalization of recruiters, but it is not merely technology that forces many recruiters to the margins. Here are some clear signs for recruiters to take an honest look to see if they too are becoming marginalized.

7. The company makes you sign their agreement. They usually like to put little things in them such as flat fees and money back guarantees.

6. Company has an ambiguous and convoluted hiring process and won’t listen to your advice as how to remedy the problem.

5. Company takes days to debrief after an interview. Nothing is more frustrating or diffuses a candidate’s zeal for a position like perceived indifference. Furthermore, if your debrief is a one-way street where they inform you of their decision rather than discuss it with you.

4. You must submit your candidates through a third party software or vendor. Someone else determines the fitness of a candidate rather than the hiring manager and you.

3. You email candidate resumes rather than verbally presenting candidates. Nothing says, “what do you think of this?” like an emailed resume. Then comes the waiting game where you wait to hear back from the company as to if or when they want to speak with your candidate.

2. You only have access to HR. You know the routine. HR dictates when you can talk to the hiring manager. (And it’s never often enough!)

1. Client has multiple recruiters working on the search although you are lead to believe it’s “exclusive.”

The truth is, if you have to deal with any of these, you are becoming marginalized. If you have to deal with more than one of these with your “client,” then consider yourself marginalized.

There’s only ONE recruiting metric that matters.


How do you evaluate your recruiting business? What metrics are important to you? Are there any metrics which enable you to measure your effectiveness? I recently read a recruiting site discussion where the person initiating the discussion asked “which recruiting metric is most important to you?” I read through some of the answers which were predictable; Send Outs to Placements, Calls to Send Outs or Job Orders etc. I am convinced that the most important metric and the only one I care to follow is; how long did the person I place stay with my client company? Are they still there, or did they leave? Were they promoted? Or were they Fired? This is the only “recruiting metric” that any of our clients really care about and frankly so should we.  I am all for improving metrics to improve outcomes. I just believe that the most important metric IS the outcome.

Queue Typical Recruiter response: “I don’t hire the person or manage them. It’s not my job” Fair enough. It is not your job to “hire” the person that they ultimately chose to hire. But, was it not you who recommended they hire this person? When you presented a candidate, you essentially endorsed them in that role. How can you present someone to your client as a prospective hire and later backtrack from them and blame them for a poor hiring decision? If it ins’t “our job” to vet the people who we bring and do our very best to assess their fit culturally as well as vet their character, what exactly IS our job?

“Win some, lose some?” Sure, no one is infallible or reads minds, but we can and should be doing our absolute best to determine the competency and cultural fit of teach and every candidate prior to presenting them.

The metric we should be interested in improving is that of the success and tenure of our placements. How long do they stay? How well liked are they? How well do they fit in with the rest of the team? Do they get promoted? This is the true test of “Added Value” which is why companies hire recruiters. Companies don’t hire recruiters to “fill open job orders!” They hire us because they hope that we can bring to bear our professional consultative insights,  reach a larger network and attract better people than they can on their own. Otherwise, they would do it themselves. They want to mitigate hiring mistakes and increase net outcomes in the position. Our job is, of course, to increase the success of the companyin as much as the search we conduct has influence to do so. If the search is a VP of Sales, then the measure of success is equal to that of the person we place as VP of Sales. So, how is sales growth?  If it is VP of R&D, the measure of success is the company’s improved product development pipeline and intellectual property position.  How are they performing? and so on. If we only judge ourselves on the number of people we place and the ratio of Send Outs to Placements,etc.,  then we are completely out of touch with our VIP, our client.

If you present someone to a client, that is tantamount to “your professional endorsement” of them for the role you have been hired to fill. If it doesn’t work out, no matter the reason, you never should have presented them in the first place. You simply cannot divorce yourself from the process and explain it away as “someone else’s fault.”  The interview process is a time where you must continue to vet and look for additional issues to raise. (If you’ve ever wondered why HR people try so hard to uncover those “red flags,” its because they don’t think that you are doing a thorough enough job of it. HR is skeptical of recruiters because they feel like you are not adequately vetting the candidates that you present.)

As far as “Metrics” are concerned, if it helps you to manage recruiters’ metrics in order to make sure that they are doing all the right activities for success, great. But don’t lose sight of what is really important to your client. Stay aligned with your clients and you will have all the repeat business you can handle.

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