You have set up shop in one of the busiest areas of the city, invested a fortune in promoting your business, and made it technologically well-endowed. However, you are not likely to succeed unless you pay attention to hiring the best human resources and retaining them. Indeed it is your human resources that provide verve and vigor to your enterprise; all the other things can act in support.
Every organization knows the pitfalls of a bad hire, and therefore, should identify the candidates that are best suited to the advertised roles. Having done that, the organization must ensure that it is able to induct the candidates it had shortlisted. Failing to do so may result in the company having to recruit people it fears may create trouble in the future and whom it would not have taken in under normal circumstances.
If You Fail to Hire the Right People...
Bad hires severely dent productivity and efficiency. They cause the organization's resources to trickle away without being put to proper use, and weaken the organization from the inside. What's worse, a rotten apple can spoil the whole barrel, and a disengaged worker can cause the morale and motivation of the entire team to go down. A bad hire, especially if he is a team leader, can sway his colleagues and those working under him by bad-mouthing the company. And, if the bad-mouthing is persistent, even good workers would get brainwashed. A disengaged employee is, therefore, like cancer for an organization. Disengagement is often contagious and when it takes root, it becomes difficult to weed out.
The problem gets compounded when employees who have already been shouldering substantial workload are asked to do more because a disengaged colleague has been leaving work pending or turning in projects riddled with mistakes. Doing extra work to cover for inefficient colleagues is bad enough, and when it has to be done without matching compensation, the atmosphere within the team becomes tense. The overworked and jaded workhorses of the organization may eventually resign as a result of this. Since 2000, when Gallup started to track employee engagement, less than a third of the workers in America said they were committed to their jobs.
Hiring is a costly affair. Organizations must write job descriptions, post job openings, read resumes and application forms, and conduct interviews. Even after a person joins the company, onboarding and training costs are to be factored in.
If you are not able to bring in the employees who you sought to hire, you would be saddled with recruits who won't be giving you a good return on investments. In fact, a substantial amount of time, effort, and costs would be required to train them. Moreover, there is every chance that employees who don't fit into the organization's scheme of things would be asked to leave, or will leave themselves. In either case, the organization would have to go through the entire rigmarole of applicant-tracking, shortlisting, interviewing, recruiting, onboarding and training again. This way, labor costs would continue to be elevated, and the time and efforts of the recruiters would go down the drain.
Another problem with inefficient employees is that customers would be getting substandard service, and hence, would be dissatisfied. Poor customer service is possibly the biggest disaster that could happen to an organization. In fact, just one underperforming employee can result in several lost customers. What's of even greater concern for an organization is that it may lose not only existing customers but also new ones. This is because dissatisfied customers may spread the word about the poor service at the organization and harm its reputation.
It may also be possible that a disengaged employee posts an uncharitable review about his employer on a hiring site like Glassdoor after getting fired for being unproductive. This would harm the brand image of the company and complicate its efforts to replace underperforming employees.
Moreover, time spent on supervising inefficient employees is time wasted. It also leads to a wastage of effort and resources, and business owners could instead have concentrated on more important matters concerning the business. Therefore, organizations must be careful during the recruitment process itself. It becomes a knotty problem later.
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Cost of a Bad Hire
According to the US Department of Labor, the cost of a poor hire on an average can go up to 30% of the first-year wages of the employee. Joergen Sundberg, the CEO of Link Humans, a firm that provides data-driven employer brand insights, writes that it costs as much as $240,000 to onboard an employee. According to a 2013 Career Builder report, 27% of the US employers who faced bad hires said one underperforming employee cost over $50,000.
Why Businesses Fail to Attract Talent
Many organizations, whether they are small businesses or major multinational corporations, are still using outdated hiring methods. Companies often fail to adequately highlight why they are different, and what candidates can achieve by joining them. Often job descriptions are not clearly spelled out. This makes it difficult to match candidates to roles. The specific requirements of the organizations also may not be strongly emphasized.
Complicated application processes also tend to put off job seekers. A lot of the job applications today are submitted online. Therefore, tons of forms, repetitive questions, lengthy questionnaires, broken links, and 404 errors may drive away applicants. This would prevent businesses to identify and recruit the best candidates. For every organization with a faulty hiring process, there would always be organizations that provide a frictionless experience to the applicants. Candidates would invariably veer toward jobs that are easy to apply for.
Another big reason that organizations are not able to draw top talent is their stubborn emphasis on recruiting the 'perfect' candidate. However, they fail to realize that perfection is an illusion and come up with unrealistic job expectations. Consequently, many diligent candidates who could have delivered handsomely remain outside the organization's radar. The organization whiles away its time trying to establish why the applicants don't fit into its description of the 'perfect' candidate while missing the unmistakable strengths of these applicants.
A company that does not advertise itself to make its presence known would not be able to attract talent. Several companies compete in the same sphere worldwide, and a company that is not able to differentiate itself from the others risks getting lost in the crowd. Job seekers today are more aware than ever and look up Glassdoor and Google reviews before applying to a company. Therefore, companies should make extra efforts to build a good reputation online and on social media.
Organizations also often overlook passive candidates. They are people who are not active job hunters but would not hesitate to change jobs if the new opportunity is attractive enough. They are not exactly on shaky ground in their current organizations and are willing to lie in wait for a big breakthrough. These are people who are often the cream of the lot, which is why their current organizations are not keen to let them go. If a business owner is convinced about the value these candidates can potentially add, he can actually go out of his way to give these passive candidates the breakthrough they are looking for. It's a small price to pay for long-term gain.
What Businesses Must Do
1. Build and cultivate a talent pool- As much as you should look at active job seekers to fill in the vacancies at your organization, as discussed in the preceding section, you would be served well by cultivating passive candidates as well. Establishing a rapport with these candidates would ensure that your organization would be their first choice when they decide to look for greener pastures.
Do not sever links with candidates -- active or passive -- who do not make it through your screening process. Save the names of these candidates in your database so that they may be considered for alternate positions when vacancies arise. Discuss their career goals, interests, and their sources of motivation. Identify their strong points, and inform them about how and why their careers would flourish at your organization.
Even when most of the vacancies at your organization have been filled, you should not cease to build talent pools, which can then easily be tapped into whenever you need to go on a recruitment drive.
Regularly communicating with candidates would ensure that they would be engaged with your company. Therefore, always keep the lines of communication open with potential performers so that you would have a robust supply line of talent. This would save you a great deal of time, effort, and resources when job positions have to be filled urgently.
2. Use social media to raise brand awareness- You can attract top talent through a strong presence on social media, especially on networking websites such as LinkedIn, where compelling stories about the company culture, the company's achievements and prospects, and employee and customer experiences can be shared.
The recruitment game can be enhanced through video storytelling, which would not only make job advertisements attractive but also help in improving search engine optimization. This would ensure that the company can be easily searched out online by job seekers.
According to Aberdeen's talent acquisition research quoted by Entrepreneur, best-in-class businesses are 75% more probable to make use of video tools for the purpose of employee branding.
Videos add heft to a company's description of its nature of operations, health, and expectation from employees, and when it is complemented by good copywriting, the organization's brand awareness exercise gets a leg up.
3. Offer an employee referral program- With this, the entire workforce can be turned into recruiters. This would guarantee a consistent stream of talent so that organizations don't have to frantically search for candidates to fill job openings. Desperation to fill positions can, in fact, prevent the right candidates from being chosen.
Therefore, organizations should let current team members refer candidates for job positions. The employees would be fully aware of the organization's specific needs and are expected to refer individuals whom they think would properly fit those roles.
Job referral programs tend to suggest that generally the employees are satisfied with and committed to their organization, and would take extra initiatives to make sure that the company is able to recruit candidates who can deliver considerable value and take the company higher.
Job referrals linked with monetary rewards, paid vacations, or shift preference offers would enthuse employees to take referral programs seriously. The job referral system is remunerative for the employees also because it gives them the impression that the organization values their inputs. Consequently, employees feel connected to the company and empowered.
Employees feel more at ease when they see familiar faces at work, and the quality of their work improves. The resultant boost in efficiency and productivity helps the organization.
A LinkedIn report points toward a tendency among employees making effective job referrals to remain at a company for a longer period of time. This is understandable because an employee who is able to convince the organization to recruit his acquaintances and, on the other hand, also convince his acquaintances that the organization is a good place to work, would think twice before deciding to exit immediately.
Job recommendations are beneficial for the referred candidates as well. A JobVite study shows that it is possible to recruit a referred candidate in just 29 days, as compared to 39 days required to hire a candidate found through job advertisements and 55 days to take in an applicant coming through an online job site.
Job referrals are cost-effective for organizations too. Sourcing applicants through employee job referrals spares businesses dollar outflow on agency fees, job board advertisements, and so on. According to Kara Yarnot, the founder of Meritage Talent Solutions, it is also cheaper to hire referred applicants, and it is also possible to onboard them faster.
Also, referred candidates can be retained more easily, according to JobVite, with 46% staying in an organization for more than a year, 45% remaining for over two years, and 47% staying for over three years.
You may also consult the people in your professional network to refer candidates. People who have a fair idea of your requirements can be expected to refer the appropriate candidates.
4. Make a name for yourself as an employer of choice- A company's image -- good or bad -- hardly takes time to spread. People want to work with businesses that have positive workplace cultures, and take good care of the employees. An organization doing well on these fronts may land credible third-party employer recognition awards, which would help in bolstering the brand, and drawing top talent.
Companies that place employees on difficult shifts and regularly compel them to work for long hours, thereby preventing them to give adequate time and attention to their families would not be preferred by the applicants. People would also not be keen to work with a boss who is overbearing, rude, not sympathetic to the needs of the employees, and is rigid about deadlines being met come hell or high water.
Employee morale and loyalty are enhanced, and employee performance improves when praise and encouragement are expressed publicly and get translated into promotions, monetary incentives, or extra perks. This goes into making a company the preferred choice for job seekers.
Other 'pull factors' include wages and benefits being commensurate with the amount of work expected to be done, adequate job security and scope for career advancement, proper induction and operational training, and a clear delineation of the company's targets, expectations, changes in policy and work schedules.
Clear and candid communication ensures that every employee knows what is to be done to fulfill the company's expectations. Every person would want to work with employers who lend a patient ear to employee issues, don't threaten the employees, encourage competition and constant refinement, complies with labor laws, and institutes employee-centric processes and technology.
Favorable employee engagement survey reports and employee feedback also enhance the image of the business in the eyes of applicants. The strengths and achievements of the company should be prominently highlighted so that they catch the attention of job seekers.
5. Make interviews standardized- Develop a set of interview questions that address both the desired personality of the candidates and the job description. You would not be able to sufficiently evaluate and compare applicants without a standardized approach, especially if you want to adopt a panel interview style and aggregate feedback from several team members.
Laszlo Bock, the former Senior Vice President (People Operations) of Google, advises all businesses, regardless of size or area of expertise, to focus on interviews that are job-specific and structured. Bock refers to a 1998 study by Frank Schmidt of the University of Iowa and John Hunter of the Michigan State University that looked at 85 years of recruitment data from US companies. A work sample test, according to Schmidt and Hunter, followed by an examination of the candidate's general cognitive ability, and then a structured interview best indicates a candidate's aptitude and suitability for the job.
Applicants going through a structured interview are asked a standardized set of questions with well-defined yardsticks to judge the quality of their answers, Bock writes in The Wired.
Structured interviews can take the form of situational and behavioral interviews. Structured interviews present candidates with hypothetical situations and seek their responses on how they would have handled those situations. Behavioral interviews, on the other hand, need the candidates to recall how they had handled situations in the past and match those experiences to the requirements of the job for which the interview is being taken. According to Bock, a good interviewer would probe carefully to examine the reasoning behind the candidates' responses, and the veracity of those responses.
The purpose of an interview is to forecast how the applicants would do if they are made a part of the organization, and this can be accomplished by combining situational and behavioral structured interviews with an examination of the applicants' conscientiousness, cognitive ability, and leadership, Bock further writes.
Therefore, employee recruitment should focus on not just the experience of the candidates, but also on the extent to which the candidates agree with the organization's values and objectives. For example, a food business may put primacy on building customer loyalty through incentives, while another may want to follow food safety norms in letter and spirit, and yet another restaurant may focus its energies on creating unique menus.
Recruiters must ensure that the interview questions are relevant to the job that the candidate had applied for. Applicants should have a clear understanding of the expectations, roles and responsibilities, perks, compensation, prospects for career advancement, and so on, right at the stage of the interview itself.
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