In recruitment, buying cheap will ensure you buy twice
- 10th October 2017
- Posted by: MP2
- Category: Recruitment Industry, Recruitment Strategy, Selection
We’ve been to several resourcing industry events lately and it’s reinforced to us time after time that generally the resourcing process is flawed. Almost everyone we speak to agrees with us! But why are so many organisations continuing to do the same thing, and expecting different results? Insanity!
So, what is the problem? Organisations are not getting the basics right; there is no real focus on quality of hire. The focus is on time and cost per hire. Few measure the success rate when hiring, and don’t understand how much a mis-hire costs (around 3-5 times the annual salary), but above all, they don’t understand what kind of person would thrive in their organisation.
Reducing cost to hire is still the main driver of the industry – recruitment teams are being squeezed and have to carry larger vacancy loads, recruitment agencies made to reduce their fees, parts of the recruitment processes are being automated and entire industries are being created to service this flawed process. REC says that the UK Recruitment Industry is worth £35.1 billion per year, so organisations are spending a lot of money getting outside help in.
Growing and scaling an organisation is an expensive business, but it’s crucial to get the right people in and it should be done properly. A friend recounted a story of a business they worked for who incentivised the internal recruiter to directly source 100 people for this brand new business. This newly appointed ‘specialist’ did what they were told and got 100 new hires in as quickly as they could and found candidates who matched on skills and experience. He didn’t put any kind of consideration about the values of the organisation, the culture this new business wanted to develop and the behaviours that would be expected of their high performing employees. Unsurprisingly, they ended up with a long list of people with performance problems.
We’ve seen such a focus on cost per hire and time to hire at the expense of the quality. John Glenn, an astronaut who when asked how he felt before going into space famously answered, “I felt exactly how you would feel if you were getting ready to launch and knew you were sitting on top of two million parts – all built by the lowest bidder”. Or maybe one of the cheesiest films of the 90s, Armageddon, is more your thing in which Rockhound says “we’re sitting on 45,000 pounds of fuel, one nuclear warhead and a thing that has 270,000 moving parts built by the lowest bidder”
It’s OK to have lofty ambitions and aim for the stars, but don’t forget about your business performance and realise there is a better way to build a space rocket. Understand what excellence looks like for your business, get the culture alignment right and test for how a person matches the values and behaviours of your business. There are more reliable predictors of performance than experience and education.
Don’t get caught up in a race to get people through the door. Getting the right people in on day one will ensure your business has a chance to perform.
MP2 can show businesses more scientific and reliable methods of selecting employees which can predict performance and achieve excellence. We know that most companies don’t effectively measure their mis-hire rate nor realise the associated negative financial and cultural impacts. Companies can be predictive in their resourcing and move from hindsight to insight. Aligning culture and values, and being able to define excellence in employees is key to retaining talent and achieving excellence by increasing performance.