Recruiting and hiring staff are two of the least favorite tasks facing business owners and managers but they are also two of the most critical business activities you will engage in. Regardless of the amount of capital you have, the latest technologies you employ, or the savviest of strategic plans you operate with, if you do not have the right people working in the right positions you will not realize full business productivity and profitability and you may not be profitable at all. Why? Because the costs of poor recruitment slowly eat away at potential profits and these costs can be so subtle that you don’t recognize their full impact until it is too late.
For recruitment to be effective it needs to accomplish one thing: Hiring the Right Person For the Job. The results of effective hiring are decreased costs and higher productivity and the top 5 advantages of successful recruitment are as follows:
Increased Productivity
The most productive employee is usually twice as productive as the least productive employee. Productivity translates into profitability, which is the only route to sustainability. Hiring the right people means hiring for the skills and competencies that will result in maximum performance.
Decreased Training Time
New employees who have the requisite skills and competencies will catch on to new tasks or responsibilities quickly and this allows them to reach productivity requirements in the shortest amount of time. Getting new people up to speed is essential, especially in the highly competitive, fast paced, technologically advanced economy that we are operating in.
Efficient Mentoring and Coaching
Managers spend a great deal of time mentoring and coaching employees and they spend an inordinate amount of time improving poor employee performance. Effective hiring reduces this need and the Manager is then able spend precious training time improving the whole department, rather than working on the weakest link.
Decreased Turnover
Most organizations do not realize how much it actually costs to hire and train new employees. There are the obvious expenses such as advertisements, vacation pay-outs, and time spent on recruiting and interviewing, but the more costly items are the ones that are less apparent: intellectual property loss, impact on customers, impact on suppliers, impact on coworkers, loss of training dollars, and the money reinvested in training the replacement. Studies have shown that turnover costs range from 50% of an employee’s salary to upwards of 150% for knowledge workers and even higher for executives and highly specialized workers.
Efficient Management
In employee management, as in many situations, the 80/20 rule applies: 80% of a manager’s time is spent dealing with 20% of the employees. Chronic absenteeism, interpersonal differences, and lack luster performance are just some of the common complaints that mangers face with poor employees. Fighting fires created by these employees is exhausting and it keeps managers from focusing their efforts on those activities that drive bottom line profitability.
Recruitment is so much more than getting a warm body into a position. Your employees are the foundation of your business and their performance is what will drive your business forward. It is imperative that you take the time and spend the money upfront to ensure you have the right people working for you; employees who will make a significant positive contribution to your bottom line and who will enhance their coworkers’ and managers’ performance. Hiring those who are incapable of top performance or who distract others, will lead to a cycle of escalating costs that no company can afford.
Quote: Most organizations invest more time and effort to choose a $5,000 copier than a $50,000 employee. Dr. Wendell Williams. ScientificSelection.com
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