74% of all Companies Make Bad Hires – Here’s how to reduce hiring mistakes. Shorten time to offer and reduce hiring burden and risk.
- Have you ever hired a terrible employee?
- Would you like to improve your hiring process?
- How to hire the best candidates quickly and with less effort and risk?
Hiring effective employees is one challenge – Retaining them is another – Both are time-consuming tasks, so getting hiring right and onboarding effectively is important…. For high-growth companies it is critical and success can depend on it. A few bad hires can be enough to kill a business in the early days or in times of rampant growth.
Deciding who has the best skills, is most affordable, has the best attitude, and is fit for your organization are all elements that need to be carefully considered. We used to find this incredibly difficult. Before CreateLMS we all worked in high-growth startups hiring exponentially each month in the complex and highly regulated World of Global Clinical trials. We desperately needed a platform that would streamline the process and assist with data-driven decisions, especially at screening. We would look at capturing:
Experience – Does the candidate have enough skills to do the task. Can they tell us stories that leave no doubt that they would be able to cope? This cannot be fake.
Ability, technical skills, competence – Can the candidate evidence this by answering quiz questions. Award points for each question.
Showing up – This one is exasperating and you need a strategy to filter time-wasters otherwise you will go mad.
- One of our clients recruits intake blocks of 10 for 911 Call Handling. They found that for every 100 applications only circa 60% bother to complete screening.
- A great friend who owns 2 high-end Jewellery shops in Edinburgh & Glasgow, Scotland could weep with the challenge of “interview no shows.” He had new store opening deadlines before Christmas, his peak season. His two stores only employ 15 people. So you would think no-shows would not impact him…. Yet for the 10 CVs, he had… his top 3 candidates who looked the strongest on paper were all no shows at the interview. The impact for him was significant in terms of cost and time. He had lined up a nice hotel, and an independent recruitment interview all at great cost.
He is an outstanding employer, with excellent retention rates in his old store. He paid everyone 100% of their salary through COVID and had beautiful Italian products in modern stores. He was at a loss as to why.
No-shows are a fact of life and today… Natural… Many people only apply for jobs so as to get their support payments OR worse still to nudge up their position, and salary in an existing post. Your process needs to factor this in. A good process and platform will help you auto-eliminate these to a fair degree. After all, why would someone go through a 20-40 minute self-paced reflection on their work experiences and answered a quiz or two? We have learned that when built well. Engaged, driven people who want to win the job will put in a great show. Those that don’t become mathematically obvious either through non-compliance to timelines or to their scores.
A good process should show you the cream of the crop. You are also able to discuss their interesting story/journey and why they went down certain pathways and made decisions… good or bad. This is where personality and fit naturally surface. Capturing all this automatically means you can evidence hiring impartiality and fairness. The best of the best will get the offers. For us, back in the day, it was critical that their progress and results be tracked and join their overall adherence and compliance reporting. Seeing this in action is a revelation for many, even those most experienced at hiring. Simple, effective, fair, and efficient.
IMPACT OF THE PROBLEM
The Cost of Bad Hiring
The cost of a bad hire can be an enormous loss, not only expenses but time as well. A bad hire can turn a fantastic business into a disaster – We all know this – But so few have a simple, structured, consistent, repeatable hiring process that is fast and scales. Let’s examine some costs?
CareerBuilder survey reported:
- 74% of employers have made a bad hire.
- The U.S Department of Labour estimates that the cost of hiring bad employees can cost as much as 30% of the employee’s first-year earnings. So if an employee earns $75,000 the cost to the company can be up to $22,500. People argue that the cost could be even way more as some expenses can’t be quantified.
- Add in the cost of recruitment firms, if you use them. These start at 15%-20% and can go as high as 30% for hard-to-fill roles. $11,250 to $25,000. Internal recruitment teams can be highly effective but these still have a cost.
- Not to mention other underlying costs such as hosting interviews, travel, lodging, and more
In This Example, we can conclude that the average cost of a $75k employee is at its best.
Do you track these?
- Average time spent reviewing CVs and inviting people to interview. In our opinion – this should be zero hours. Don’t believe us – Get in touch we will show you.
- Average time to hire – From request to join to offer – Are you rapid decision-makers or does everyone go through 4 rounds of interviews? 🙁
- Average of the total time spent on hiring
- The hours spent by the average cost per hour = cost
- Average hire success rate – How many CV’s do you need to hire 1 person
- Average time in post – Do some roles/posts perform better than others
- When hiring goes wrong –
- Do you measure the Impact on Team Morale or investigate why this and understand the lessons learned and bring these into the process. Just looking back at your last 10 hires will give you a huge amount of data and insight. Making this easy reaps big rewards.
- Agency fees, costs, and time spent with the agency. Is this the value for money you were expecting? Who’s reliable delivers you candidates that stay in the post above the averages.
Why Are Bad Employees Still Being Hired?
All of these statistics and more can amount to a huge loss for the company. Even though this is public information, why are bad employees still being hired? CareerBuilder’s surveys highlighted a few insights as to why;
- 35% of interviewers/employers were aware that the candidate lacked all of the required skills but believed they could learn quickly
- 32% took a chance on a nice person
- 30% felt pressured to fill the role quickly
- 29% focused on skills rather than attitude
Errors such as the ones listed above can only make a company more inefficient. Especially at the initial stages of rampant employee growth.
What Best Practices Can You Adopt To Prevent Bad Hiring?
CreateLMS team helps different companies of all ages and stages smooth out their hiring and onboarding process. This team can either build out the process and content for you or show you how to do it. Once you start, you wonder why and how you did it the way you did. Use the CreateLMS or other Learning Management systems to perform content delivery, adherence and compliance tracking, and analysis of quiz and survey data using reporting.
- Write an accurate job description for every single role
- Ask every candidate the same question. For each candidate for a given role, ask the same or similar interview questions. This will allow you to calibrate candidates across identical questions.
- Assign focus areas to interviewers, prior to the interview. Often you want to interview candidates for specific aspects of their role. For example, you might interview a product manager on their product insights, past accomplishments, culture fit, etc.
- CANDIDATE SCORING – As each person finishes their interview, it is good for them to enter feedback about the candidate before talking to other interviewers. This avoids people passing each other and forces each interviewer to take a written stance on a candidate.
- Use survey tools to gather feedback on the interview process or answer more technical/free text responses
What Benefits Do You Stand to Gain?
With an LMS you can
- Prepare a smooth hiring process that’s semi-automated.
- Conduct fewer physical interviews and screenings and figure out the candidate with the best skills and suitability
- After figuring out the best candidate to hire, onboarding them is a breeze as you can create training content, and upload and it’s there for your employees to always view at all times.
Not only will this save you the cost of a bad hire, but it also reduces the expenses related to getting even a good hire, helping you reduce the precious time that could’ve been spent on bad hires. You will also be able to easily track employee progress, and figure out who’s working and who’s not, all on one platform.
CreateLMS is one of if not the best HR LMS systems that’s available on the market, an effective employer would achieve leaps and bounds with CreateLMS.
CreateLMS helps employers
- Hire More Efficiently– Less screening and interviews. Identify candidates with the best skills and suitability.
- Onboard & Train Faster – Help people settle into their role, feel valued, respected, and help them acquire the skills needed for success.
- Increase Employee Retention Cost Effectively – Develop, train, educate and grow your people. Seek feedback on possible operational improvements and conduct surveys, reviews, and NPS.
We help you throughout the process of hiring, onboarding, and training your employees both new and existing.
CreateLMS is a Learning Management System (LMS) Is a platform that allows you to hire, train, and onboard employees at speed and scale. The capabilities built into a learning management system will efficiently reduce interviewing hours, hiring costs, time spent with candidates teaching them about the purpose of the role, expectations, etc… not to mention travel time, etc. You get to deliver the same hiring experience to every employee. The only difference might be around the short-term goals and objectives of the team hiring. Not only does an LMS make hiring much more effective but it also accelerates and shortens the time needed for onboarding.
All this and more is what we offer at CreateLMS. A platform that solves issues with staff engagement using an app-like experience that is semi-automated, consistent and process-driven. Our teams make sure you excel and have the platform to make it happen. So get in touch and let’s show you this in action and within 60 minutes you will know how to fix your current engagement issues.
- 31% of New Hires Quit Within 6 Months – Employee Retention Strategies That Work
- Why Hiring Takes Longer Than it Should & How To Fix It
- New Hires Need Effective Onboarding – How to Elegantly Onboard New Hires Quickly and Easily.
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