For many companies, staffing is their biggest line item. If people are your biggest corporate investment, then how you hire has a tremendous impact on the success of your company. A bad hire can cost you in productivity, morale, and other ways. In fact, the U.S. Department of Labor estimates that a bad hiring decision can cost 30 percent of the employee’s annual salary: that’s $15,000 in addition to a $50,000 salary for an average employee. And it costs an average of $7,000 to replace a salaried employee; $10,000 to replace a mid-level employee, and $40, 000 to replace a senior executive.
To protect your staffing investment, it’s important to make the right hiring decision the first time. If you use the right employee assessment tools and hiring criteria, you can avoid bad hires before you interview your first candidate.
CLEAR WORKFORCE PLAN
To minimize bad hiring decisions, you need to start with a clear workforce plan. This means identifying key employees and decision-makers, their roles, and having an HR strategy in place that both identifies your staffing needs and the expertise you need before you start filling a position. When developing your hiring strategy, you need to understand what specific skills you are seeking:
- Assess the organizational structure first. Where does the open position fit within the organization? Does the role have a clear purpose that supports the company mission
- Determine if there is there a complete job description? Has the supervisor developed a job description and has HR vetted that description? Be sure the job description is comprehensive and adequately describes the job, including possible future duties.
- Identify the minimum qualifications for the position. Are there special skills or credentials that may be needed, such as CPA, MA, MD, or PhD, or specific software or tech skills? Are certain experience levels required, or a number of years of service, or certifications?
- Analyze your compensation plan. You want to perform a competitive analysis to make sure the salary package is competitive with room for growth. You get what you pay for, so being able to offer a competitive salary will help attract the best candidates.
PERFORMANCE BASED JOB DESCRIPTION
A common mistake that many hiring managers make is writing a skills-based job description that only outlines the requirements to do the job. A better approach is to describe the role within the company. A performance-based job description provides a better measurement of how a candidate will perform based on the expectations of the job. For example, if you were hiring for a sales position, a skills-based job description would require: a college degree, strong interpersonal skills, years of industry experience, number of years of sales or customer service experience.
The criteria are broad-based and will fit a wider range of applicants. To narrow the field, you can use a performance-based job description for the same role that might include:
- Expected to book 20 product demonstrations per month
- Achieve sales quota within first 90 days
- Achieve 20 percent customer renewal rate
- Responsible for incoming query calls and routine customer questions
The performance-based job description sets the expectation for both the candidate and management. It also provides a benchmark for employee assessment before the candidate is even hired. Get specific with the tangible skills and capabilities that the position requires.
EFFECTIVE HIRING ASSESSMENT
It has also been proven that an effective hiring assessment should cover:
- Day-to-day responsibilities, such as routine responsibilities. A “day-in-the-life” scenario will weed out a number of poor candidates.
- Employee expectations, such as performance indicators, required duties, and job metrics.
- Cultural fit, including alignment with the corporate culture and potential career advancement.
Hiring for highly qualified tech talent can often prove challenging and you can benefit from partnering with a specialized tech-recruiting firm who can help to accurately review and evaluate the tech skills of candidates, and assist your company to make smart hiring decisions.
Proper preplanning and employee assessments before you hire can result in tremendous savings. It always makes sense to hire right the first time than to use trial and error. With the right tools and tests, you narrow the field before you even start your search and make it easier to find the perfect candidate.
