Friday, April 22, 2016

The Cost Of Hiring

Even if your organization isn't in a hiring phase right now, chances are pretty good that you'll need to replace someone or open up a new position in the future.  Two-thirds of all managers know that turnover is expensive, but they are unable to quantify the cost.
Remember that figures do not include the cost of losing an employee, such as loss in productivity, time spent in exit interviews, money spent on temporary hires, etc.  There are many additional costs that are associated with employee turnover that are much harder to quantify, such as loss of morale among employees, customer service disruptions, burnout among existing employees, and loss of an experienced employee.
Even though the cost of employee turnover is high, this does not mean it should be eliminated.  If you have an employee who is under-performing, the cost to replace him/her will be far less than what the employee will cost you in low productivity in the long run.  You must be ready to undertake the hiring process and invest the time it will take for a high payoff in the end. 
Follow a Plan to Reduce Hiring Costs
  • Don't wait for open positions to update or create a job description.
  • Determine the budget for the position.  
  • If you aren't in HR, find out how HR will assist in the hiring process.
  • Always be aware of advertising options. Many are free (LinkedIn)!
  • If recruiters are an option, know which firm you will use.  
  • Know scheduling conflicts that could affect interviewing time.       
How long should you spend in the hiring process?
Companies that set a time limit on how long a position can remain open are setting themselves up for failure. Although you want to be efficient with your time and not allow for an extensive period of time to elapse, you do not want to rush the process. It will take time to find a qualified candidate. Studies show that the average time to fill an entry-level position is 3 1/2 months, while the average time to fill a management position is 7 months or longer.

Until next time...

Sheryl Tuchman, SPHR, SHRM-SCP

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