Within the work based learning and training sector, companies are monopolising on business opportunities and have growth plans in place which usually goes hand in hand with the need to hire additional staff to help the company realise its goals.
However, with the UK’s unemployment is the lowest since the 1970’s, skill shortages and the competition for talent is becoming quite fierce.
Last year the Recruitment & Employment Confederation (REC) undertook a survey of Hiring Managers 85% of which, admitted to working somewhere that had made a bad hire. This report is called, “The Perfect Match making the right hire and the cost of getting it wrong.”
We’ve probably got a rough idea of the impact of making poor hires has on a company, but research showed that employers were completely miscalculating the financial impact of making a wrong hire.
The real cost of a bad hire is calculated to be over three times the employee’s salary. PricewaterhouseCoopers looked primarily at the cost to hire a replacement, compensation, benefits to be paid to the departed, cost of training, systems and tools, cost of hiring managers’ time, which equated to a total of 50 – 150 % of their annual salary.
Harvard Business Review points out that as much as 80% of employee turnover is due to bad hiring decisions. Whilst many of the costs of a bad hire can be easily identified, such as recruitment fees, advertising costs, time taken by senior managers, etc. there are other hidden costs.
Surprisingly, 33% of those interviewed who worked for a company who had made bad hire, didn’t believe that the bad hire(s) had cost the company anything. If only this were true.
The most common reasons why hiring mistakes happen
The job description/advert is misleading (9%)
Interestingly, those who made a bad hire and used a recruitment company were more likely to attribute the cause for the bad hire to a misleading job description. At GPRS we often find that job Descriptions are old, often out of date and often don’t sound particularly enticing to the candidate. In the REC’s Good Recruitment Campaign, candidates highlighted the importance of the job description as a motivator when applying for or accepting a new job. Put yourself in the candidate’s shoes – if a job description sounded mundane and you couldn’t see how your specific skills would be utilised, would you apply for the job?
The factors for consideration when creating a job description
- Consider what it is actually that your company wants to achieve and how would the new employee help the company realise those goals
- What are your company values? What characteristics would a person display if they too shared these values? If one of your values is providing a great learner experience, then if someone lived that value too, what actions would they take to achieve that?
- When looking for a new role, candidates want the bulk of their time spent doing that they have trained for. Many job descriptions put too much emphasis on the less important elements of a job and this is off putting for candidates. For instance, if you are recruiting an assessor, the major part of the job description needs to talk about the assessing element of the job followed by ancillary tasks.
- Talk to the post holder or someone doing the same job within your company and find out EXACTLY what they do on a day to day, week to week basis.
Also for consideration is if the job description is being used to create competency based questions and the tasks stated aren’t the ones the candidate needs to possess, the assessment of the candidate will be inaccurate.
For the Hiring Manager, HR or an agency to find the right person with the right skills for the role, the Job Description must be accurate and reflect not only the skills the person needs to be able to perform in the role to a satisfactory standard but also take into consideration the values of the organisation. All sectors of employment change frequently and using an old job description may not reflect these changes and the different skills that may be required of a candidate.
Not surprisingly, 43% of respondents in the survey when asked what they would invest in / develop to improve hiring practices said the job brief.
The HR Team or Hiring Manager is too busy to engage efficiently during the recruitment process (9%)
This is probably the main reason why companies use GPRS – because to do recruitment well it is so time consuming and if recruitment is only part of a busy HR professional’s responsibilities, or they may have several other roles that they are trying to give equal attention to so they simply cannot do the search for candidates justice.
Similarly, recruitment is a small part of a Manager’s role and if they are busy with a plethora of other business critical tasks, recruitment often takes a back seat.
Decision makers said the bad hires occurred because the pool of talent accessed is too small (33%)
Goodness, this is a tough one that we’re all suffering from at the moment. Employment is at its highest since the 1970’s and there is serious competition for each and every good candidate. Job boards aren’t yielding the results they did 12 months ago. Luckily at GPRS, we have a database of 55,000 work based learning and training candidates and we add to the database every single day. All our client roles are advertised on the major job boards and we have a team of resourcers who spend each and every day identifying new talent and adding them to our database. Whilst I appreciate this is beyond the scope of most companies, you do need to spread your nets far and wide so you have a wide selection of candidates to choose from. The ideal candidate for your role may not be looking at the job boards on the days you advertise.
There was a limited budget to be able to conduct the recruitment process properly (10%)
It would be interesting to compare a company’s marketing budget – the things they do to attract new clients, with their budget for candidate attraction. Yet, without having the right people in place the probability is a company wouldn’t be able to service the clients its marketing activities have worked so hard to attract and retain. If there is only one thing you do this year it should be to invest some time in considering what sells your company to prospective employees.
Decision makers said the employee’s skills weren’t explored thoroughly and or references not checked (20%)
45% of respondents in the survey when asked what they would invest in / develop to improve hiring practices said the candidate vetting process.
One of the reasons I believe this occurs is because the company doesn’t have a clear view of exactly what they are looking for in the first place so that goes back to the Job Description being correct.
Once you have a Job Description in place you can begin to create a Person Specification. This is a checklist of the following headings:
- Job Title
- Location in which the person needs to live
- Hours of work the person must be able to work
- Qualifications the person needs to be able to do the job
- Industry or sector knowledge
- Key skills the person needs to be able to perform the job to a satisfactory standard
- Personal attributes a person needs to be able to perform the job to a satisfactory standard
- KPIs the person will need to work to or other measurables
- Values a person needs to demonstrate in their behaviour
- Physical make up – someone working in warehousing is probably going to have to do a lot of walking so needs to be physically fit. Someone assessing professional people needs to be presented in a business like way.
Your Person Specification should be a like a shopping list of all the things you are looking for in a candidate who can work to the level you require. When you interview you should systematically work through the Person Specification gaining examples of where they have previously demonstrated that they possess that skill. This is called competency based interviewing.
It would be very useful to have an interview form which everyone in your company was required to complete during the interview process. This would ensure that all candidates are treated the same and therefore avoiding discrimination. It would also promote professionalism, equality and diversity.
As someone who has trained people in interviewing skills for many years, I always find it surprising that in the vast majority of instances Hiring Managers have never received any formal interview training and yet, they are responsible for acquiring the company’s most important asset – its staff.
I cannot stress enough the importance of taking references for everyone before you employ them. I’d recommend creating a list of reference taking questions and try and speak to the employee’s line manager. It is some company’s policy not to give verbal references so this can be tricky. If the person is employed you cannot take a reference from their present employer unless you’ve made an offer of employment and they’ve accepted, so I’d take it from the previous employer. Always ask the candidate’s permission first. Watching a candidate’s reaction when you ask from whom you can take a reference can be quite enlightening.
Within the Perfect Match survey comments were made about agency staff receiving interview training. At GPRS all those involved in the candidate selection process receive several days of interview training with extensive role plays before they are allowed to speak to candidates on the phone. That is followed by two months mentoring, where they are observed and coached. Naturally, clients will only employ candidates whose skills and experience match the brief they provided us with. Submitting candidates who are poorly matched is a waste of our time and the client’s.
The position needed to be filled quickly
We’ve all been there haven’t we? Someone is leaving and you need to get someone in situ ASAP to handle their workload or you win a new contract and realise you don’t have the capacity to cope with the extra workload. If this means that you don’t do things thoroughly you could make a mistake.
Here would be my suggestions:
- Have up to date Job Descriptions for each role within your company. Review them frequently with the post holder and their line manager. A good time to do this is at quarterly reviews when you can go through them with the post holder. If someone leaves you know exactly what the post holder did
- Co-ordinate diaries of the people involved in the interview process for the next two weeks so you know when you are all free to interview (if more than one person takes part). You will then be able to predict when interviews will be held
- Use an agency. GPRS has a database of candidates that we can be speaking to and emailing within minutes of you putting down the phone to them. It is much quicker than waiting for the job boards to generate results
- Conduct a telephone interview first and go through the Person Specification you have created from the Job Description. This will allow you to quickly shortlist suitable candidates. I conduct telephone interviews for all our internal hires and I estimate that only 50% get invited in for a face to face interview. CVs are only half the picture
- Hold a one stage interview for suitable candidates only. Many of our clients ask candidates to deliver a micro teach or do a presentation at this stage. This saves time on coming back a second time to perform this stage of the interview process
- Go through the Job Description with the candidate at interview stage and make sure they are happy with the content. Talk about your measurables and KPIs and check with the candidate that they feel they can be achieved and they have achieved this level previously. Systematically work through the Person Specification and check the person has the criteria you seek.
- Ask several people to be involved in the interview process as you will all see something different about the candidate and it gives a much more rounded opinion of someone that will fit into your company and has the skills to perform the role to the standard you require.
- Following the face to face interview, have a discussion about each candidate. Refer to the Job Description and the Person Specification and discuss how each candidate rates against the criteria you are looking for. Stick to the facts. Don’t be swayed just because you like someone as a person. This doesn’t necessarily mean they can do the job.
- Don’t hang about making an offer. Good candidates get snapped up quickly. Don’t reject your second choice until your first choice has accepted. Just in case!
The people did not have in place people with the proper skills to conduct interviews (12%)
You can develop good interviewing skills over a period of time but if practising to hone those skills means you make mistakes and the mistakes are poor hires, then it’s an expensive way to learn.
Frequently a person is giving responsibility to employ their own staff but less frequently, they are given formal interview training to help them do the job properly. Most CIPD trained HR professionals will have undertaken some form of interview and selection training. Many Hiring Managers have not and it would appear that it is taken for granted that someone will be able interview.
At GPRS everyone goes through two full days of interview training and role plays before they are allowed to interview candidates over the telephone. The first few phone interviews are listened into to ensure the quality of the questioning techniques are good and all the information needed is obtained.
When you think about it logically, it doesn’t make good business sense that the person that is responsible for acquiring the commodity that can make or break a company’s success, isn’t provided with training to ensure they do it effectively. Yet, this is often the instance with interviewing. Perhaps this is why 85% of Hiring Managers in the UK admits to working for a company that has made bad hires!
There are many places offering professional interviewing skills, such as the Recruitment & Employment Confederation, where people are taught to interview to best practice industry standards. Many companies offer CPD, if you’re a Hiring Manager, make acquiring formal interviewing skills one of your selection. If your company won’t invest, then buy a book written by an author who’s specialism it is.
Unconscious bias to hire similar to the current staff (11%)
I was talking to someone the other day who worked for a large company and they were telling me how the company always recruited the “same sort of person” and this was the reason why she believed that the staff turnover was high as the role had changed over the years and the “same sort of person” was no longer what the company needed.
The other aspect of this if you hire similar to your current staff you are not embracing diversity. The CIPD says,”Promoting and supporting diversity in the workplace is an important aspect of good people management - it’s about valuing everyone in the organisation as an individual.”
|What is unconscious bias?||...|
Every person brings something unique with them in terms of their background, culture, sex, race, ethnicity, life experience, previous work experience etc. Always hiring similar people means you miss out on benefits a diverse work force brings.
To ensure you hire people that have the right skills and you are unbiased in your approach, make sure you create the Job Description and Person Specification and use them as a checklist. This will prevent you being subconsciously being drawn to a certain type of candidate that may not longer be right for your business.
The 2017 McGregor-Smith Review on ‘Race in the Workplace’ highlighted the lingering biases that continue to disadvantage certain groups and how they should be tackled through training. The review further recommends that unconscious bias training should be mandatory for all employers.
Inadequate research into what the company actually needs in terms of skills, values of the candidate
Every sector has its own challenges and that changes all the time due to a wide variety of factors. The work based learning sector has seen its fair share of changes and challenges this year (that’s an understatement I hear you shout). Companies that don’t keep abreast of these changes get left behind. What changes have there been in your sector and what impact has that had on the skills you need in an employee? For instance, if your company is now having to sell client funded training as opposed to government funded, a Business Development person is going to have to sell differently.
Additionally, consider what your company is trying to achieve? Maybe it’s your Ofsted grading, maybe you have areas as part of your continuous improvement to address, maybe your team are behind on their KPIs and this needs addressing. Whatever it is, the chances are you are going to need to bring in certain skills or qualities in a new hire.
Companys’ values also change and this can reflect on the type of person they hire too.
A Time for Reflection
Andy Raymond, Head of Executive Search, Redline group says, “When there has been a bad hire, that is actually the time to sit down and without any sense of blame, ask what went wrong. What did we do collectively or individually and what can we learn from it? Because if we do not learn from last time, there is every chance we will make exactly the same hiring mistake again. With the right engagement from all parties involved, we can massively reduce the risk of repeating a bad hire. I would advise employers to be completely open and honest about the challenges and past hiring mistakes."
Within the REC’s Good Recruitment Campaign, one of the recommendations was to ask candidates for feedback on your interview process and procedures. This could provide valuable information.
GPRS provide a free replacement if a candidate leaves or proves to be unsuitable within the first three months of joining the client business.
The one area that wasn’t explored to any great extent during the Perfect Match report was induction and onboarding, probably because it is such a huge subject. You can do all the right things and make the perfect match with the candidate and your company but if the way you onboard them and manage them initially is poor, you could lose them.
Here are my induction and onboarding recommendations:
- Don’t assume that your new employee knows what you expect of them and that you both have the same idea of what excellent looks like. Go through the Job Description with the candidate:
- At interview stage so they know what is expected of them and check they are happy to undertake those responsibilities.
- When they join your company go through the Job Description again to remind them
- Revisit the Job Description at weekly intervals to ensure the candidate is on track
- Have a formal induction programme so the candidate’s first impressions of your company is one of professionalism. It’s no wonder Investors in People accreditation looks deeply at a company’s induction programme as it has been proven that a good induction enhances employee engagement.
- Conduct weekly reviews with your new employee. It shows that you are interested. It also will highlight any issues and allow you to deal with them quickly. It is very to assume that just because people have done a role in a similar company that they will perform it to the standards you require.
- Frequently ask the new employee if they are happy or if they have any issues or if the job was as expected?
Making a bad hiring mistake is costly. We are dealing with people who are unpredictable but there are a lot of steps you can take to ensure you minimise mistakes. It just takes a bit of planning.
The REC’s Good Recruitment Campaign conducted many surveys and one of the things that came to light was the power of social media; in the past, if candidates had a poor recruitment experience, such as companies that didn’t give feedback or the recruitment process was too long, or the interviewer was unprofessional, they would share their experience with family and friends either face to face or over the phone. This could amount to about 50 people maximum. Now, with the power of social media, these negative comments about a company can be viewed by 100s of people.
Whilst many companies may still not care about what the candidate thinks, it is worth bearing in mind that GPRS has several companies that we no longer work with because the company may have such a bad reputation that candidates do not wish to discuss opportunities they may have!
Helen Wilson, Sales Director, GPRS