Photo by Tim van der Kuip
How often do you or your team go with your gut and subsequently make a bad hire? How much does a bad hire cost your business? Thousands of dollars? Tens of thousands? Forbes suggests it could cost over a hundred million.
On average, the cost of a bad hire is about one-third of the annual salary of that employee. Using that as a guideline, it’s easy to see how a string of bad hires can add up quickly.
If you want to avoid making a bad hire, you and your team should consider recruiting employees using evidence-based recruiting instead of relying on gut feelings. The first step is to take a look at what you’re currently doing.
Examining Your Current Recruitment Process
Your recruitment process is a huge determining factor in the quality of employees you have. Before you can make changes to it, you have to look at your current process.
Take time to look at your process and see how well it’s working. Job vacancy time, time from the initial screen to job acceptance, employee satisfaction, customer satisfaction, and turnover rates are all indications of how strong or weak your current recruitment process is.
Go through these five points and compare your numbers to industry averages and standards. If they fall below average, you may be making hiring decisions based on gut feeling rather than relying on hard evidence.
1. Vacancy Fill Time
The purpose of an employee giving a two-week notice is that you should be able to get a head start on a replacement during that time. If, however, it’s taking you far longer to fill job vacancies, then you may have a problem with your recruitment process.
In some cases, this could be that there is an abundance of applicants and it’s difficult to sift through them all.
You’ll also want to consider the time between the initial screening of the candidate and the actual start date. Is the interview process too cumbersome? Are there too many decision-makers involved? Is there a sense of urgency for those involved to be engaged with their part of the process?
If this process is emotionally-draining and too time-consuming for your team, then you’re probably relying too much on your own intuition and not enough on evidence.
2. Employee Satisfaction
If you’re not already doing so, you should be checking to see how satisfied your employees are with their jobs. If they’re unhappy, the problem could lie with your hiring process in that you’re not getting the right people in the first place.
Look for people that are passionate about your industry and have the skills to back up their enthusiasm. Try to avoid hiring people that are over-qualified for positions as they could end up feeling bored because they’re not being challenged enough.
Consider engaging a survey provider to measure engagement every one or two years. The provider takes care of the logistics and the software and the survey’s results are reported to you on a high level.
Another way to study this aspect is to consider productivity. If your employees are not as productive as they should be, this could be a sign of dissatisfaction within your company.
3. Customer Satisfaction
Are your customers happy with your employees and your company? These are other numbers you need to look at as evidence for how well your current employees are working out.
If you have low levels of customer satisfaction, do what you can to trace this back to your recruitment process. Are you focused on hiring people with customer service skills and experience?
4. Company Turnover Rates
This is, by far, the best way to see how well your current recruitment process is working. If you have a higher-than-average turnover rate for your industry, the root of the problem is most likely in your hiring process.
In many cases, it’s because you’re using your gut instinct instead of following an evidence-based recruitment process.
Benefits of Using Facts for Hiring Employees
There are a few benefits that you can gain by using an evidence-based recruitment process. Let’s dive into each one of these so you can fully understand why it’s so important to change the way you think about hiring.
Vacancies Filled More Quickly
If you have a huge stack of applications to go through, it will take a long time for you to weed out the unqualified individuals and find only those who are ideal for your company.
With evidence-based hiring, you’ll set up parameters and only look at candidates that meet your specifications. This also helps take the emotional drain out of looking through seemingly endless applications.
As we already mentioned, a bad hire can cost your company thousands of dollars, if not more. When you use hard facts to choose the right employee, this reduces your chances of making a bad hire, which saves you money.
It also saves you time, so you can spend more time focusing on doing the things that are most important for your business to succeed and thrive instead of trying to make gut decisions about who to hire.
Higher Employee Satisfaction
When you put the effort into choosing a candidate that’s right for the job, they’re going to fit in far better than someone that doesn’t quite make the cut who you hired based on personality compatibility.
Consider your current employees as well. A bad hire can put a lot of stress and pressure on them. If you can alleviate these concerns by ensuring all of your new hires are well-qualified, the overall satisfaction rates should improve.
Higher Customer Satisfaction
With the right employees in place, they will work hard to ensure all of your customers are satisfied. Even those that don’t come into direct contact with your customers can change the customer experience.
For example, factory workers that are passionate about what they do will ensure every product that comes off of the line exceeds quality control standards. This is why you need to hire qualified employees at every level of your operation.
Next, we’ll be getting into exactly what the evidence-based recruiting process looks like so you can take full advantage of it.
The Evidence-Based Recruiting Process
Let’s look at what a hiring process looks like when it incorporates evidence-based recruiting into it from the beginning.
Compare this to your current process. If your current process is vastly different, then consider incorporating any of the ideas into your own process.
1. Identify Predictors of Success
The first thing you need to do is take a careful look at what indicates success within your company. Consider what personality traits, skills, and experiences your current highest-performing employees have and use those as a guideline.
Keep in mind that what may have worked for your company a few years ago may not work now. The rapid changes in technology have changed what skills are needed to take a business into the future.
Create numbers to quantify everything as much as possible. These will be used as you create your candidate persona and set up AI technology so you only spend time on the best applicants.
2. Create a Candidate Persona
A candidate persona is a semi-fictional picture of what your ideal candidate is.
You should have one for each type of job you have. As you start recruiting for a certain position, you’ll use this to find the right candidates.
The candidate persona is formed by defining the ideal characteristics, skills, and traits that will make up your perfect hire. The candidate persona will help you and your team create more relevant job descriptions and increase desirable applications. It’ll help you understand the top recruiting channels for your target candidates and align your recruiting strategies.
It’s far easier to see how well a person will fit a certain role when you compare them to your candidate persona. This allows you to focus on the exact traits you want in a candidate rather than getting distracted by their personality or other things that don’t matter as much.
3. Only Look at the Best Candidates
You can now leverage AI to help you throughout the hiring process. It can be used to help you find suitable candidates and then to weed out ones that don’t have the right qualifications.
To do this, you will want to consider setting up surveys as part of an online application process. Based on those responses, an AI program can provide you with a list of only the most qualified candidates so you don’t have to worry about the rest.
4. Measure Your Success
With every new hire, follow up with them, their managers, and their co-workers after a few set periods of time. One should be within a few weeks of hiring then another a few months out.
Find out how they’re doing to see how successful your recruitment process was. In most cases, a bad hire will reveal themselves fairly quickly so you don’t have to waste too much time on post-hiring evaluations.
In some industries, it can be hard to measure the impact an individual has on your overall business. However, having employee engagement software in place will help with this.
You should also evaluate your hiring process with the same four points mentioned earlier. Although there are other factors that can change these metrics, putting an evidence-based recruitment process in place should cause you to see these positive changes in each of those areas.
5. Make Adjustments as Needed
As you determine how successful your hiring process was, you can start to make adjustments to it so you can improve it even more.
There are many circumstances that are outside of your control, so you’ll never be able to be 100% successful when hiring employees. However, by continuing to improve your process, you can reach a success rate that you’re comfortable with.
How to Recruit Employees That Are Right for Your Company
Now you know how to find employees using evidence-based recruiting practices. This process can help you avoid bad hires and find candidates that will stay with your company for many years.
Incorporating more evidence-based decisions into all of your company’s processes will help you make overall better decisions for your business that are driven by facts rather than emotions.
If you need help finding the right candidates for your construction industry job opening utilizing the evidence-based recruiting process, partner with us today.
About MatchBuilt: MatchBuilt is a team of executive recruiters that is focused on matching top building industry talent with leading residential construction home builders and LBM / building products and building materials manufacturers. We utilized an evidence-based recruiting process.
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