Have You Ever Hired Someone You Wish You Had Never Met?
I was having coffee with a friend of mine who is the CEO of an early stage software company. I asked him how much it cost him to hire the wrong individual and was expecting something like the $240,000 figure quoted in a recent Forbes article. He shocked me with his answer: “$2,500,000.” I asked how he came up with that figure, and he said that in selling enterprise software, it takes 12-18 months to close business. If an employee fails, it costs the company the compensation for the individual and expenses for recruiting, as well as the $2.5mm that he or she was expected to produce. I believe that is a more accurate understanding of the cost of a poor hire than I had ever heard. He had just had an experience with a seller he wished he had never met.
In your business, a poor hire may not cost $2.5mm, but may cost you much more in customer loyalty than the money you spend on recruiting, hiring and training the individual. Take a moment to think about how much damage a poor hire can do to your business, whether in a sales role or any other. It might inspire a different way of thinking about how you recruit, interview and hire.
In a hiring process there are four things to seek. Does the candidate have the skills, the values, the aptitude, and the drive to do the job you are hiring him/her to do?
There are mistakes that can be made in a hiring process:
- Not having a clear understanding of the competencies that the individual needs to possess to do the job
- Not having a well-defined set of values you are looking for, and all your interviewers understand
- Not utilizing some sort of aptitude test that measures if the candidate will have success, based on preference for a type of work
In an interview, if you have a well-defined set of competencies and values, you can increase your odds of finding the right individual for your role. You can also determine if someone has the right drive with an interview group that understands behavioral interviewing techniques. But determining aptitude is not something you can do in an interview process. You must use an assessment tool, and several are validated and accurate but you should never use them for more than 25% of your decision. It is only one of four factors.
Having a rigorous, disciplined process for recruiting, interviewing and hiring has a positive impact on your business, your customers and your profitability.