So you’ve accidentally hired the wrong person, or made a rushed hire due to business need. Does it matter in the long run?
Yes. Bad hires are expensive for a whole host of reasons. They are likely to generate less revenue than good employees, or even cost an organisation money due to errors or complacency.
They can also impact the productivity and morale of employees around them. Further, you may have to invest in extra training or performance management, and if and when the employee does leave, you will likely need to invest more in finding an urgent replacement.
In fact, a poor hire at mid-manager level with a salary of £42,000 can cost a business more than £132,000, according to the Recruitment and Employer Confederation (REC).
Good hiring decisions are not just about avoiding the bad apples. The difference between a good employee and a great one is widely reported. A McKinsey study of more than 600,000 researchers, entertainers, politicians and athletes found that high performers were 400 per cent more productive than average ones. In highly complex occupations, such as software development, high performers were found to be an astounding 800% more productive.
Low complexity roles such as a packing job at a large distributor – which for many organisations does not merit special focus in terms of recruitment – demonstrate a productivity gap of 50% between average and high performers. The impact on productivity increases as the complexity of the role increases, with an extraordinary jump between high and very high complexity roles.
So getting great people, not just good people, into an organisation is more than a nice to have – it has a profound impact on the quality of output and, ultimately, business performance. Great employees are valuable in and of themselves, but they also drive wider team performance, inspire others and make recruiting other great people easier.
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The balance here is in the volume of employees at each level of complexity.
Employers looking to drive the best results from employees would be wise to consider the economies of scale that come from nailing the selection process for low complexity roles, as well as reaping the benefits from hiring the most able candidates for the highly complex ones.
The solution? Take time to build and execute a carefully targeted candidate attraction strategy. This ensures the right people are entering the assessment and selection process. And critically, invest in a recruitment process that identifies (and ideally excites) great candidates at all levels of the organisation. As the saying goes, more haste, less speed.
It matters more than you think.
Sandra Innes is client relationship director with TMP UK