The potential high costs of finding the right person means businesses must take care in going through the process of recruiting. From advertisement to reviewing process and other recruitment-related tasks, such as conducting interviews, the vetting process, and pre-employment assessment tests, there is a considerable amount to the actual cost of hiring.
On average, the recruitment process will cost per hire, approximately $3,250-$6,500 (USD). This economic value will differentiate per industry, with finance and tech companies spending significantly more to expense the recruitment process.
This cost does not include the average turnover cost, which stands at a median of $3,500 for low wage salaried employees.
The cost of a bad hiring decision is detrimental to the success of any company. It is crucial then that businesses avoid these major recruitment mistakes. The five recruitment mistakes below highlight opportunities for businesses to ensure they attract top talent and increase employee retention.
Hiring in any industry is tough. As technology continues to dynamically evolve, recruitment processes must do their best to stay up-to-date. Certifications that may have been important last year, particularly in industries such as tech and finance, may no longer be relevant.
Staying up-to-date on emerging industry-specific trends ensures that the recruitment process continues to be led by informed decisions on skills and qualifications so that the right talent has the right skill sets to do the job properly.
Few things are more frustrating for both a recruiting company and the right candidate than setting unrealistic expectations. When recruiters aren’t specific enough about the needs of the position and the duties, skills, and competencies necessary for the role, it becomes challenging to access top talent.
Defining and providing specifications about a role’s function together with comparative salary expectations will ensure companies attract the type of high-caliber candidates they require. Inaccurate or ambiguous job descriptions along with a too-heavy emphasis on professional qualifications will only lead to attracting mediocre candidates.
While this is difficult to prove, biases are prevalent in any industry, including recruitment. As the recruitment industry is prone to subjective thinking, it is possible that a recruiter will determine the right candidate for the role according to an unconscious bias regarding race, gender, age, and social class, among others.
Indeed, research shows that particular frame of references are formed when recruiters screen candidates. Recruiters have the tendency to hire candidates that are favorably framed within their reference; often sharing the same background, age, ethnicity, social class, or even gender.
These unconscious biases become more evident when companies require a position to be filled in a short amount of time.
Unwittingly discriminating potential candidates according to unconscious bias can lead to a bad hiring decision. This will advertently increase costs for the recruitment process due to diminishing employee retention. Preventing prejudices during the recruitment and interview process will result in positive impacts in the hiring decision.
A study done by CareerBuilder found that around forty percent of candidates who have applied for a role within the last seven years have found that the application process has become more difficult. Further, over half of those surveyed raised issues regarding the automation of certain recruitment processes and its lack of personalization.
Not only does this unwittingly create a bad impression among a company’s potential talent pool, it also has an inadvertent negative impact on businesses.
Candidates who were left with a bad impression, whether that was due to a lack of ongoing communication, no acknowledgment of the status of their application, or failure to follow up post-interview, are less likely to be loyal to that company or make future purchases.
Conversely, candidates who have a positive application and interview process will leave with a great impression. A well-reputable company that treats candidates well can expect to hire candidates at a lower salary.
An often overlooked trait during the recruitment process is a candidate’s cultural fit. Candidates who go on to become employees but lack a high degree of culture fit can result in high turnover costs. Having great credentials or a degree for a top-rated university is indeed important.
But these do not always reflect a candidate’s ability to succeed in a job.
Credentials do not always reflect an individual’s skill set, drive, dedication, or motivation to continue to learn and grow according to the requirements of the business. These traits are best articulated by how well a candidate can weave themselves into a company’s culture.
A candidate with strong cultural fit will be able to adapt and reflect their skills and attitude to the core beliefs and behavior of a business. Those with strong cultural fit are more likely to remain with a company and often provide superior job performance.
The hiring process should never be taken lightly. Globalization has pushed for a more competitive market, resulting in companies accessing high-caliber candidates for diverse backgrounds and experience.
The potential return on a good hire means it is paramount that companies must acknowledge these recruitment mistakes. Failing to rethink the recruitment approach to hiring results in costly mistakes that will only hinder accessibility to top talents.
A passionate recruiter with more than 12 years in the executive search industry, Payal Bhatia is an international headhunter and business partner for RM & Associates in the MENA region specializing in the FMCG, retail, telecom and engineering sectors.