A new hire is a living resource. Employers groom employees to take on more responsibilities in their companies, often investing in their education so that the investment will deliver a return.
“When you’re looking at hiring a person, there are a lot of costs involved,” says John Lamotta, director of sourcing, consulting services at Sequent. “There’s a cost for a recruiter to find a qualified candidate, costs for the hiring managers to conduct the interviews, costs for on-boarding, and the cost of training and bringing the candidate up to speed. Everything about bringing someone into a company costs money.”
Smart Business spoke with Lamotta about managing new hire investments for the greatest return.
Is there a commonly accepted trajectory to get a return on a hiring investment?
Much of it goes back to the culture of the hiring company. Some companies expect people to hit the ground running. Other companies are more about the on-boarding process and getting candidates acclimated.
While it depends on the manager, the general expectation is that in 90 days an employer will start seeing some independence and ability from the new hire to do the job. If that isn’t being realized, that could be the result of a manager who isn’t watching the employee’s progress closely, so it’s important for hiring managers to set goals and benchmarks for new employees.
Depending on the role, it could be a full year before the new hire is generating money for the company. The worst case, however, is hiring the wrong candidate. That can cost a company between three to 10 times the salary of the position being filled.
What can an employer do to maximize the return on a hiring investment?
From a recruiting perspective, the average time for a full-time position to be filled is between five and eight weeks. Improving on that starts with the job description. Employers must clearly define the position and what the person will actually do at the company. Without that clarity, the recruiter may take more time to find the right fit, so it’s about having a conversation with the people conducting the search to ensure you’re sending the right message.
Another factor in filling open positions effectively is speed. Hiring managers should understand that in today’s job market multiple employers are engaging candidates with certain niche skill sets. The unemployment rate for some professions is near zero. It’s important that when a candidate is presented to the hiring manager that he or she contacts that person immediately. Failing to do so may mean the candidate is no longer available, and the process has to start again, which costs money.
If you’ve been interviewing multiple qualified candidates each week and are not finding what you need, go back and adjust the job description. Look at what you want in terms of qualifications and what you’re wiling to pay, and ask yourself if it’s reasonable.
What are the common mistakes employers make that result in losing money on a hiring investment?
Many employers falsely assume that the on-boarding process is all about paperwork. It’s actually a process to acclimate the new hire into the workplace culture and familiarize them with the company’s systems, processes and their responsibilities so they can work to expectations and produce a return on investment.
Set benchmarks at 30, 60 and 90 days, as well as at the end of the first year, to gauge whether your investment is meeting the necessary criteria. If he or she is falling short, it could be something simple that’s impeding their understanding or ability to do the job.
Another key is to make new employees feel welcomed. Some people can go a month without feeling as if they’re part of the organization. Without engagement, people may be more worried about job security than doing their job.
Understand that there is a cost associated with every person that you hire. Those costs include the time existing employees spend to help acclimate and support the new hire. Don’t waste time. Be clear about what you want from a candidate and your new hire for the best results.
Insights HR Consulting is brought to you by Sequent