MANAGEMENT RECRUIT RESOURCE RETAIN July 31, 2015
As the talent crunch grows to find talented employees for responsible positions, HR managers of major organizations from different industry verticals believe that the candidate pool is drying up. With the unemployment rate down to 5.3 percent, hiring and retaining talent continues to be a growing problem for employers. The U.S. Department of Labour estimates that the average cost of a bad hire can equal between 25 and 30 percent of that hire’s first year earnings – reinforcing that many organizations literally cannot afford to make a bad hire.
A recent Recruitment and Retention Trends Survey 2015 conducted by PI Worldwide, a company that empowers businesses across the globe reveals that when looking to bring in new hires, most organizations are focusing on the expected areas of candidates’ skills, experience, and education.
However, companies of all sizes are not including “soft” criteria, such as personalities and behaviors, as part of their job descriptions. This means they are often not putting the right emphasis on equally critical areas (such as motivating drives) and an individual’s characteristics that are important for success. As a result, they are inadvertently narrowing their own candidate pools by concentrating on only the “hard” criteria.
“Today, most employers continue to rely on unstructured interviews and previous experience as the predominant method to determine fit. While these are important, insights from behavioral and cognitive assessments can be significantly more accurate in predicting how well a candidate will perform within a specific role, culture, and ultimately how well they will support strategic initiatives,” says Mike Zani, CEO of PI Worldwide.
There is a growing need to supplement traditional thinking when it comes to selecting qualified candidates for the job. Interesting findings on why employers find some of their new hires a misfit for the job role and top reasons on why employees quit jobs were unleashed in this survey. Most of the top management are in consensus to a single fact on why they find new hires a misfit is because of their behavioral approach or inadequate skills.
Smaller companies report candidate misrepresentation as the primary reason why new hires don’t work out. Considering small businesses rely primarily on interviews and don’t use cognitive assessments and knowledge/skills tests as frequently as larger companies.
About 75% of large companies have lost a top performer because of poor performer. While small companies easily terminate poor fits, large companies do not follow this practice. While attractive compensation and bonuses are being used by companies as a mean to retain employees, most employees still continue to quit owing to conflicts with a peer or manager and lack of career development prospects in future.
To address this growing concern, larger companies are moving towards a twice yearly performance review schedule, and tend to meet weekly as teams. Job-specific training is the preferred choice of organizations dealing with workforce gaps, with mentoring and coaching second, however one-fourth of small companies have no formal process.