While company leaders love to say that people are their most important asset, their hiring processes often say otherwise. By placing too much of their focus on the expense of the hiring process, hiring managers often take shortcuts and bypass highly-qualified and motivated professionals that are not actively seeking employment. While hiring managers believe saving costs by conducting the hiring processes internally, this extends time-to-hire and results in companies paying more due to the cost of a vacancy.
Companies can avoid these three common mistakes to reduce company costs:
Is the current process effective?
The root of many problems surrounding hiring lies in companies not truly understanding the effectiveness of their hiring process. Many companies track costs per hire and time to hire but don’t have a system to monitor whether or not their hiring process is resulting in good employees. Imagine a marketing department presenting an advertising campaign as the cost and time it took to put together, without explaining how it affected sales.
Companies that have incorporated skills-based and/or personality assessments into their hiring processes can track whether those who scored better are less likely to quit, or more likely to get better performance appraisals. However, that ability is only granted to companies who have integrated some form of testing into their hiring processes.
Additionally, assessments can only be useful for tracking the effectiveness of employees if they are trusted in the first place. According to research from “Discretion in Hiring,” published in Oxford’s Quarterly Journal of Economics, many hiring managers ignore the results of assessments and make decisions based on their own instincts—but they end up with worse employees compared to those who rely on data from tests.
Exceptional employees are more than dollar amounts, and days it took to hire, and a highly-qualified, specialized hire who matches the company’s values and culture can be worth additional investments toward the hiring process.