By Michael cruz
We’re all aware of the current labor shortage. It makes it hard to fill your backlog or get your work done in a timely basis. It might make you feel justified in taking risks on marginal candidates for your jobs.
Don’t. Quick hires are all too often bad hires. And bad hires cost you lots of money both in hard dollars and your reputation. There is the cost of advertising and recruiter fees. These are direct hiring costs. When you must replace someone, you need to do this all over again, and the original costs are never recovered.
Then there is the issue of what you paid that person while they were in your employ. The actual salary or hourly rate, plus the 20-30 percent benefit load, plus any expenses they incurred that were reimbursed. Add in what you paid to have their computer and cell phone set up, and costs for other tools.
Add in what you spent for outside training courses. Add in any severance expenses. Severance can be minimal if they were not there long. However, when you linger in your decision, you are “running up the meter.”
Indirect costs are harder to quantify. Yet, they are far greater. You will need to take time to coach these people. And to listen to complaints about them. That negative energy drags us all down. Not only is the actual time spent wasted, but it also makes us less productive at the work we like to do.
It affects not just managers, but other employees as well. They will spend time complaining about your mis-hire. Often, they will have figured it out before you finally admit it to yourself. If they are in a customer facing position, they may have made life worse for a customer or client. You need to spend time repairing that damage. Lastly, they probably missed signals and lost some opportunities to pursue better initiatives that a productive hire would have seen.
Figure out how much your last mis-hire cost you. Use a specific example and this will come more alive to you. As you see, the numbers can be quite large. This is the most compelling reason for getting hiring right in the first place.
“If you do not have time to do it right now, where will you find the time to do it again?”
You need to follow critical steps. Now more than ever. It starts with a good interview. One that is completely based on understanding the candidate. Why did they change jobs in the past? What experiences demonstrate their ability to learn? To adapt in your company? Remember it is not enough to figure out if they can the job. The key in determining fit is something more. Can they do the job here?
An overlooked part of the hiring process is the reference checks. In large companies, we sometimes leave this to HR. In smaller companies (and the large ones too) we leave this to the end of the hiring process. You know, when you say, “I want to make an offer to this person. Let’s check references.”
This shortchanges the reference process in several ways. First, we have fallen in love with this candidate. That makes us have “happy ears.” We don’t hear warning signals. We ask questions. Would you hire this person again? What were his/ her challenges in their position? And others like that.
And we are asking these questions of the people that the candidate gave us. Face it, the candidate can find three people to say nice things about them.
The better way is to ask reference questions from people you know. Use your network. Use LinkedIn. Find people you know in common. Or people who may know the candidate. Ask for off-the-record references.
If you know me personally, I will probably respond differently. Ask these references with behavioral questions.
“Can you think of a time that they had to work on a team?” “How did Candidate X react to that particular situation?” Another is, “Can you think of a time you had a coaching moment with this person? What was it about and how did they react?” Find colleagues, not just former managers.
Last, think about doing background checks. Especially for customer facing roles. Many of my clients have avoided big mistakes because of what the background check told them.
The workforce situation will improve. Your bad hires will hurt you in the long and short run. Most importantly, follow your process. Resist the urge for a quick fill. Your customers deserve it. Your employees do too. But most of all, you do.