The success of your organization depends on the talent it hires — recruiting results. It stands to reason, then, that recruitment deserves an ample portion of company time and money. The key to gaining the resources necessary for building out hiring activities is getting buy-in from company management.
Here are some facts to gain that buy-in:
- An engaged employee is 44% more productive than a satisfied worker
- An employee who feels inspired at work is nearly 125% more productive than a satisfied one
- A high performer can deliver 400% more productivity than the average performer
- More than 50% of new hires fail
- The cost of a bad hire is at least $20,000
New-Hire Failure Rates by Job Level
Five different independent organizations reported the failure rates at the six job levels presented below. This high failure rate is not a statistical anomaly. Dr. John Sullivan compiled the list.
- Overall failure rate — What percentage of all new hires fail within 18 months? — "46%" (Source: Leadership IQ)
- Hourly new-hires — What percentage of all hourly employees quit or are fired within their first six months? — "50%" (Source: Humetrics)
- Management new-hires — What percentage of management new-hires fail within 18 months? — "Between 40 and 60%" (Source: Harvard Business Review)
- High managerial talent — What percentage miss the mark on high managerial talent? — "In 82% of their hiring decisions" (Source: Gallup)
- Executive new-hires — What percentage of executive new-hires fail within 18 months? — "Nearly 50%" (Source: The Corporate Leadership Council)
- CEO failure — What percentage of new CEO's fail outright within their first 18 months? — "Nearly 40%" (Source: Center for Creative Leadership).
- Unequivocal success - What percentage of new-hires can be declared as an unequivocal success? — "19%" or 1 in 5 (Source: Center for Creative Leadership).
Your company has thousands of business processes. However, I doubt that you have a single process that has a 50 percent failure rate. Your C-Suite will be shocked to learn that recruiting processes (the HR process with the highest business impact) often has a failure rate of 50 percent. Moreover, that failure rate occurs at every job level in the company — from hourly employees to the executive level.
What response would you expect from C-Suite if they were presented with the revealing facts above?
The hiring tools used by most hiring managers are woefully biased and inaccurate for making crucial hiring decisions. We help the hiring managers identify and employ best-fit candidates for critical positions without the guesswork. Our analytics — behavioural DNA — has an 85 percent reliability related to career success benchmark profile on 600+ roles. This dramatically will improve your recruiting results.
SuccessFinder’s benchmark profile represents the level of similarity between a candidate’s profile of behavioural preferences and the high performer profile, on roles explicitly selected for the assessment.
Candidates that are selected almost always have the right hard skills — knowledge, skills and experience needed for the position — as they are easy to determine. SuccessFinder Benchmarks are based on empirical studies identifying the unique behavioural preferences of high performers in different roles.
What distinguish high performers from marginal performers? It is their behavioural traits, not their hard skills. Based on the characteristics shared with top performers, we provide the probability (%) that the candidate will meet or exceed performance expectations consistently.
For Human Resources to become the central business function it can be, the C-Suite needs to be aware of the recruiting successes.
Recruiting Results Demonstrate HR ROI
While HR focuses on people management, leadership needs to see that it has a positive impact on the bottom line. By presenting the ROI of your recruitment strategy to executives, you can make a strong business case for more significant investment in HR resources.
There are many ways that you can demonstrate the tangible and fiscal impacts of robust recruitment strategies at your organization. Assign a value to your recruiting efforts.
Communications Needs to Focus on the Facts
Research indicates that CFOs turn down 90 percent of all HR proposals. They frequently find that the recommendations presented “are heavy on emotion but weak on data.” Thus, CEOs reject HR proposals that have a 25 percent or higher chance of failure.
These findings underline the importance of making a strong business case for your recruitment strategy. It can be tempting to speak in the language that resonates from an HR perspective. However, your audience is the C-Suite. They want to know the hard numbers about why recruitment is beneficial for your company. So, prove your case with financial data.
In addition to using the averages above, dig into your data. How have recent hires:
- contributed to the bottom line
- generated additional revenue
- improved productivity
- filled critical knowledge gaps
- created new leads
- kept a valuable client on board
Be proactive and ask your CFO to help you calculate the costs, negative business impacts, and the lost productivity that results from hiring failures. This is an essential number to calculate your ROI. They will challenge any number you determine on your own. So, have the CFO calculate the number. It improves the credibility of your business case.
Communicate recruiting wins and failures in a way that shows the tangible business benefits.
Recruitment and turnover are costly to your company. Quantify the cost. It will help you to justify investments in your recruiting and onboarding processes. It is essential to get recruitment right the first time. Making a poor hire that ultimately leaves the organization because they weren’t the right fit is costly. You need to know exactly how expensive.
Create A People-Focused Culture
Communicate your recruitment successes often, in both financial and anecdotal terms. It helps you build a people-focused culture. The talent you bring on board is critical to your company’s success. Promote the value of recruitment to the C-Suite is key to success at your organization.
Communicating recruiting wins to leadership may not have the desired effect immediately. Be persistent. By regularly reviewing metrics with your executives, you can place HR activities front-and-center in the C-Suite dialogue.
- What are you doing to keep business executives looped into recruiting results at your organization?
- Has that had the effect you have hoped for? If not, remember to bring it around to ROI related to your recruiting results, highlight recent hires’ success and stick with it.