June 26, 2017

Mis-Hires Will Break Your Bank!

By Chuck Hutsell, Partner and Practice Lead, IT and Gaming

Technically, the term mis-hire isn’t an actual word recognized by most English dictionaries. However, talk to any CEO or HR professional and you’ll quickly notice that it elicits a deeply negative response.

Mis-hire can be interpreted in a myriad of ways, and offer many different meanings based on the context in which it is used. But all of the connotations and denotations of the word convey one universally accepted outcome: wasted time and money. Sometimes, lots of wasted time and money.

The Roots of a Mis-hire

Every recruiting effort—both internal and external—is a function of three critical factors: time, cost, and quality of fit. In virtually ever case one of these factors trumps the other two. It’s simply the nature of the process. Companies, understandably, want the ideal candidate, as soon as possible, at the most desirable budget arrangement. Job candidates, understandably, want the best possible outcomes for their financial and quality of life interests. Ultimately, a compromise is made where time, quality, and costs are analyzed, discussed, and explored to the point where one takes precedence over the other, or the other two. Let’s take a close look at the determining factors: time, value, and quality.

Why Time Matters

When time becomes the driving factor in the recruiting equation, both quality and cost are significantly impacted. If, for example, a skilled programming position needs to be filled in three weeks, incentives linked to quality and costs become negotiable, especially when comparing proactive and reactive recruiting efforts. When it comes to time-sensitive talent acquisition, many companies are too reactive. Put simply, they start the process too late to find the best person and create the best hiring circumstances. They don’t, for example, take the time to understand the true intricacies of the position. Or they rush poorly delineated and defined budget approvals. They often focus on the hiring deadline, and not the consequences of their decisions six months into the future. Time can be the most overlooked critical element to successful recruiting—and one of the leading causes of mis-hires.

Professional recruiters understand that businesses are dynamic entities, and that forecasting the future resource needs of an organization means being diligent and proactive.  Recruiters are professionally wired to see far enough into the future so talent acquisition efforts are launched in a reasonable amount of time and deliver the exact resource that is needed. Typically, talent acquisition for a highly skilled and creatively nuanced positions such as a programmer takes eight weeks to secure the ideal job candidate. An accelerated hiring schedule that rushes the process is prone to making sacrifices regarding both the quality of the candidate fit and the negotiated terms of the salary.

Matching Value with Cost

Every recruiting negotiation eventually boils down to money: How much money the client is willing to spend, and how much the job candidate is willing to accept. Many companies are pressed to budget so that they receive as much skill as possible in one human body. Hiring managers think in terms of, for instance, the technical skills required by a particular job combined with the number of years of work experience the job requires. In reality, however, fewer candidates than expected may fulfill every one of the listed criteria. And candidates that actually do fulfill these various requirements are in a position to negotiate favorable salaries. As with every business, recruiting is a marketplace that abides by the same supply vs. demand dynamics.

Determining a fair salary for a resource means knowing how the value of the skills and quality rate in a specific market. Many companies don’t invest the time and effort into truly understanding the complexities of skill valuations and complicated technical concepts that are at the heart of modern technical positions. It is common for these companies to budget salaries that are too high or too low. Cost has to synchronize with quality. A quality/costs mismatch means the company will not have the money to hire excellent job candidates, or that the company must sacrifice parameters on quality to reach its set budget. Mis-hires are almost guaranteed when quality and costs are not aligned.

The Right Cultural Fit

Identifying and cultivating quality candidates through the recruiting process takes time. From an economic perspective, the market will bear out that higher quality people will have higher value and therefore cost more. These candidates tend to already be happily employed and attached to their routines and professional commitments. Enticing them to leave, or to even consider changing jobs as an option, requires a significant investment in developing relationships. Even though a company may want to fill a position as quickly as possible, educating happily employed job candidates on the professional and personal benefits of a move takes time. And, usually, more money.

Quality is defined by the calibration of technical skills, work experience, and cultural fit. The vulnerability of quality is directly proportional to an organization’s understanding of its culture and the technical acumen needed for the job. A match in cultural sensibilities is imperative. Poor cultural fits are a leading factor in producing mis-hires. Professional recruiters are in touch with the culture of a company and its hiring team, and are therefore able to direct similarly minded job candidates to positions and companies where both the employee and employer thrive together through shared values and sensibilities.

The Takeaway:

Time, cost, and quality are the three primary factors that drive the recruiting process. Being able to anticipate resourcing needs in a proactive manner decreases the pressures of time concerns. Achieving maximum value from cost requires an in-depth, real-time knowledge of the marketplace, where supply and demand constantly evolve relative to client needs and available talent. Understanding the true technical needs of a specific position, and the acumen and sensibilities of candidates, is imperative to ensuring quality cultural matches—especially when negotiating salaries and (if necessary) relocation logistics. Recruiters offer expertise in each of these key components, and that knowledge provided by a trusted partner is essential to mitigating the risk of costly mis-hires.