Most small and medium-sized business owners are constantly wrestling with the challenge of effectively keeping costs down while focusing on steering the business towards growth and success. There are many ways that employers can do this, from streamlining expenses to being proactive about ensuring compliance. A key area that business owners tend to overlook as critical to the success of the business is recruiting. Most business owners know that having a good team of employees is important, but the reality is that an effective recruiting process has major benefits that spill over to all aspects of the business.
A key reason employers should invest more time and energy into developing an effective recruiting process is that it will save the employer more time and money in the long run. When it comes to recruiting, a little bit of proactiveness at the start can go a long way. Yet, many employers are facing challenges in the recruiting realm. In fact, 42% of small businesses list hiring new employees as their biggest challenge. (Source: Score 2015)
At the very basic level, recruiting new employees requires an expenditure of company resources – money to run job ads, time to interview candidates, etc. According to Monster, $1,872 is spent on average by small businesses to hire someone new. But finding people to fill vacant roles is only half of the battle – the more important half of the battle is finding quality candidates that are a good fit for the role. After an employee is hired, even more resources go towards onboarding and training that employee, and if that employee was not ultimately a good fit for the role, all of those resources went to waste. This is a widespread problem – one survey of 20,000 new employees over a three-year period found that 46% of new hires failed within 18 months.
The negative effects of a bad hire spill over to many aspects of the organization, and often prove to be extremely costly. Of course, there are the costs incurred in the recruiting and onboarding process, and the cost of the bad hire’s salary and potential severance pay if they are terminated. Beyond the time and expense of a “bad” hire, poor hiring decisions can affect the overall morale of the team. A study released by global staffing firm Robert Half revealed that 95% of respondents said a poor hiring decision at least somewhat impacts the morale of the team and 35% said that morale is greatly affected. Often bad hires result in a loss of productivity, and the business suffers.
A poor recruiting process also poses a significant legal risk to employers. There are plenty of touchpoints in the recruiting process where a spurned applicant could claim that the hiring practices are discriminatory. In addition, if an ill-fitting candidate results in that candidate’s termination, the terminated employee could seek retribution against the company for any number of perceived reasons. Poor hiring practices and procedures can end up being extremely costly for employers.
Employers can combat this waste and compliance risk by being more proactive and dedicated to finding quality candidates from the outset. They should adopt a “quality over quantity” mindset when it comes to job applicants. Instead of casting a wide net and trying to get as many people to apply for a position as possible, employers should be taking steps to increase the likelihood of attracting quality applicants that are the best fit for the role.
This can be a challenge as recruiting continues to evolve. With the advent of online job boards and application systems, the process of applying to jobs has become a lot easier. In previous times, there was more effort required on the part of the applicant, Now, however, some job applications can be filled out and submitted with the simple click of a button. While this is positive in some ways, it can also mean that employers are facing a larger barrage of applicants that they are forced to sift through.
There are many practices that employers can adopt to improve their recruiting and hiring processes. This post is the first in a series of posts all about the importance of recruitment. In this series, we will be discussing how employers can optimize the recruitment process to reduce costs, improve efficiency, and ultimately help the business thrive. We will be addressing common struggles that employers face in the recruiting process and tactics for overcoming those challenges.
This post is part of a series on recruiting. Check out the other posts in the series: