What do hiring mistakes cost your company?

25 Apr
April 25, 2015

Below is a copy of a blog from our friend Gary Wilbers at Ascend Business Strategies. The Restoration Nation thought the content would be valuable for our listeners so Gary allowed us to use it here. If you like the content, do not miss out on Gary’s interview on the podcast!

 

From Ascend Business Strategies:

All companies face the challenge of hiring just the right person for a position, but have you ever stopped and tried to figure out what the true cost is for a bad hire? In a recent poll by Vitamin T Staffing, 41% of companies estimate a bad hire cost more than $25,000 and 25% said it cost them over $50,000! It’s no secret organizations live and die by the bottom line and their return on investment of its employees . . . a bad hire will drastically impacts your profitability.

As many of you know, I have had several companies over the years but my flagship business was selling wireless services and when I was at the helm my turnover rate was always around 30% . . . among my peers I led in that category, and was proud of it. There came a point in the company though, where we experienced a tremendous growth spurt, but our profits weren’t keeping pace. Sales were up but Profits were sluggish, and I couldn’t figure out what was happening! Every year, at the end of the third quarter, I would begin strategizing with the President preparing for the next year. This particular year I had a new President at the helm and I remember as if it was yesterday when he said our turnover rate for the year was at 93%! I was floored! I knew it had been creeping up, but 93%? That was alarming. He attributed the increased churn rate to our rapid growth . . . the challenge of hiring and retaining the right people was costing our company.

I challenged the President and my HR Director to figure out a way to reduce our employee turnover rate. They came back with several options and the belief that our only true competitive advantage was our people, and I agreed. We would need to hire the very best people, matching them to who we are and what we do. They met my challenge and created a new framework for our hiring practices effecting every position within our company. Let me share with you how we went from a 93% turnover rate to 33% in one year!

We began by evaluating each of our retail locations isolating their most effective hiring practices and studying what made our successful team members, leaders. This process became a powerful new hiring strategy. It is based on the following premise:

A company must communicate their goals and objectives from day one of a new hire, and continue to reinforce them during daily and weekly contact with the employee, success is almost a no brainer because they begin to buy-in to the organization. So, let me share with you our eight step game-changing Success in Hiring™ framework:

  1. Create or Update your Vision, Mission, Core Values and Goals (for future reference VMCG).
  2. Link all company positions to your Vision, Mission, Core Values and Goals.
  3. Complete a Job Essentials™ worksheet for each position within the company.
  4. Utilize the Core Competency™ worksheet to identify the top five necessary for success in each position.
  5. Utilize Behavior-based questions during the interview for optimum results.
  6. Utilize the Hiring Filter™ scoring process to gauge applicants during the interview process.
  7. Utilize the New Hire Checklist™ to create an on-boarding process beginning the day a new hire accepts employment.
  8. Complete a 90 Day Target™ with each new hire establishing clear goals and objectives for the first 90 days on the job.

This framework reduced our employee turnover from 93% to a very manageable 33% in just one year. This framework changed not only our churn rate but the culture of our organization. Over the next three weeks I will share with you strategies from our “Success in Hiring” program along with several FREE downloads for helping you to start improving your hiring process. Remember if you would like for us to come in and train your team on this process please go to www.goascend.biz or call 573-644-6655 to contact us about implementing Success in Hiring™ in your organization.

I challenge you to Give of yourself, Love openly and Make a Difference each day!

Make it a GREAT day!

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