People are expensive. Seriously expensive.
Recruitment firms estimate that a bad hire costs a company anywhere from 1/3 to 2 full years of that person’s salary. Just think of all the hard and soft expenses involved in the process: lost productivity, lost human capital, re-hiring, re-training, disruptions to co-workers…
It adds up fast, and more than a few companies have been put in difficult positions -- or have been wiped out altogether -- by making the wrong hiring choices.
Resumes, experience, and the interview process are all critical, but there are a few often-overlooked best practices to consider before you’ve even posted the job.
Have an Open, Honest Discussion with Your Principals
It’s alright to start at the top. Get your leaders together and have a candid discussion about the roles you need to fill and why. It’s important to hear leaders’ perceptions of what’s working, what isn’t, and who might be able to fix it.
When that process works, sometimes you’ll discover that shifting existing employees around will fill the gap -- which allows you to put your resources into a different position altogether.
The more honest everyone can be, the better the result.
Talk to Your Staff -- All of Them
You’ll want to have similar discussions with everyone who would work with or interface with your new hire. Perhaps an existing employee desperately wants to fill the role. Maybe you’ll get insight into how that job works on the ground in a way that can better inform your hiring practices. Management’s needs often different from employees’ needs, and it’s important to reconcile the two before making a hire.
The worst case scenario? You don’t find out anything new, but you’ve improved employee morale and buy-in by involving them in the company’s hiring process. It’s worth your time.
Measure the Culture
Now that you’ve talked to everyone at the top, the bottom, and in-between, take some time to think about the culture of your company. What’s it actually like to work there? What type of person would fit best?
It’s easy to get a skewed impression of your company’s culture when you’re so close to it. It’s wise to take the company’s temperature now and again to see how things have changed. Ask your trusted colleagues to weigh in -- that presents a great opportunity for you to network with other owners and executives, and a fresh perspective can be invaluable.
Run the Numbers -- Again and Again
If you have a ballpark sense of how much money you can dedicate to a new employee, you’ve got a start. But with all this new information about what your company really needs, you can get a better sense of exactly how much value you’ll get out of a new hire -- and that’s the metric you can use to determine how much you can compensate them.
You want to put out a highly-competitive offer to attract and retain the best person to fill the role, and the only way you can do that is to know how much you’ll get out of what you have to give. Spending some extra time on the numbers and putting them in the context of value to both parties will set you up to make a great hire.
Align With the Future, Not the Present
You’re hiring because you have a pressing need -- that’s obvious. You can absolutely make a capable hire to fill that need. But if you want to make an outstanding hire, you’ll need to find someone for today and tomorrow.
Throughout this process, you’ve talked with everyone in your organization (and even some outside), thought deeply about your company, and looked closely at the data. Now it’s time to think about the future.
No one expects you to have a crystal ball, but it’s worth thinking about how a new hire will fit with your plans down the road. That can include everything from products/services to culture. You probably want someone on your team who will stay long-term and contribute to growing the company, so why focus only on today’s needs? A hire for now should be a hire for later, too, or you'll just be going through the same process again. And that’s when it gets really expensive.