The right part for the job

Build a job profile to choose the right hire the first time.

Have you ever hired a person for a key position and within one year either they quit or you had to terminate that individual? Unfortunately, this scenario happens much too frequently. As you may already know, when this happens it can be very expensive.

The financial costs can vary depending on the position for which the hire was made. One CareerBuilder study estimates between $7,000 to $10,000 as the average cost of hiring the wrong individual for an entry or mid-level position. The cost of wrongfully hiring a manager can cost in excess of $40,000.

For higher-rank roles, the cost of hiring can be much greater. The Society for Human Resource Management reports that “a single bad hire can cost up to 5 times the position’s salary.”

Let’s say you have a person you need to hire for a leadership position and you pay that person a salary of $75,000. If that person does not work out it could cost your company up to $375,000. Stop to consider just a few of the factors that figure into that amount. That includes job advertisements, background checks and the salaries of your staff who are doing the interviewing. It can add up quickly.

Falon Fatemi, CEO of Fireside, reports in Forbes that “While the financial impact is quantifiable, chief financial officers actually rank a bad hire’s morale and productivity impacts ahead of monetary losses. Zappos CEO Tony Hsieh once estimated bad hires had cost the company well over a $100 million.”

Let’s face it. Most of us are not heading a company as large as Zappos. However, some savvy business owners or CEOs think it would be crazy not to use a specific system when hiring for a leadership position. For the rest of the CEOs and business owners, well, they often just don’t think about it. Much to the consternation of their leadership team and the negative impact it has on their bottom-line profits, they just don’t understand the dire consequences it is having.

A Harvard Business Review study states that “80% of turnover is due to bad hiring decisions.”

So, what can you do about it in your company? There is something called job profiling, an interactive process that you can you use to hire the right person for the right position in your company. Job profiling, sometimes referred to as job benchmarking, is a process I use with my clients to help them hire. It’s a unique and effective solution because it benchmarks a specific job, not the person in the job.

To do this, we let the job talk through an interactive process and job assessment. When implemented properly, it can have a direct effect on your business’ bottom line. My clients tell me that not only does it help them attract the best candidates, but they are able to save time and money by hiring the right people the first time. It eliminates common biases often associated with the hiring process. It also reduces the learning curve with new employees who are strategically matched to fit your company. Hiring the right person can help reduce the potential friction and mismatch with the other employees’ behavior styles and motivators already working for your company.

One other consequence of a bad hire includes the negative impact it has on the rest of the organization.

As Dan McCarthy, executive coach, points out, “Having a bad hire has a negative impact on the rest of the team. When one employee is underperforming or carries around a consistently bad attitude, it has a devastating effect on the rest of the team. They have to pick up the slack, cover up mistakes and put up with all kinds of obnoxious work habits from their slacker coworker. Good employees will resent having to put up with the nonsense, morale will suffer, standards will drop to the lowest denominator and eventually, great employees will quit.” I would add one comment here to Dan’s: In some cases, the great employees will lower their work standards because, in their perception, management doesn’t seem to care.

I had one client who learned this the hard way. He and his partner for too many years put up with a few managers who started out as hard workers but eventually became lazy, nonproductive and dead weight. They literally became a liability. Some of the grievances they committed included the following:

  • not maintaining and cleaning their company vehicle
  • using their company vehicles for nonwork activities
  • excessive damage to their vehicles
  • excessive parking tickets
  • excessive damage to clients’ property
  • long lunches with their crews
  • mismanagement of their direct reports
  • verbally abusive treatment of their employees
  • not helping other foremen when the need arose

The “slackers” had a devastating effect on the other managers who were doing an excellent job at this company. The other managers were not blind. They saw the injustices. One of the things that irritated the high performing managers was that these inept managers received the same bonuses their poorer performing managers were receiving. It did not seem to make a difference that they were working harder and maintaining much higher standards.

My client was fortunate as they were able to eventually implement a system that eliminated most of their low performing managers and return to the high standards the owner had started the company with.

This scenario is not uncommon in most companies. When good labor is at a premium, the tendency is to hold onto low performing managers and front-line workers can be devastating.

When you don’t have a clear picture of your ideal manager’s position and their responsibilities or don’t enforce the one you have, you are headed for some expensive trouble.

Having a solid job benchmarking system in place could have prevented my client’s problem from occurring. By having the manager’s job benchmarked would have set the requirement clearly in place in the mind of all of his foremen. Then simply holding each foreman accountable to the benchmark on a consistent basis would have made the task of keeping the right managers and removing the wrong ones much more systematic and enforceable.

So, before you hire that next person for your growing company, stop and consider using a job benchmarking tool. You will be glad you did and so will your management team.

Tom Borg is a business consultant who works at the intersection of leadership, communication and culture. As a thought leader, he works with his green industry clients and their leadership teams to help them connect, communicate and work together better without all the drama. To ask him a question please call 734.404.5909, email him or visit his website at tomborgconsulting.com.

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