Penny wise and pound foolish

For me, this saying is never more relevant than when you are dealing with the talent acquisition process.  Investing upfront in the process to ensure the greatest probability of selecting the best candidate is critical.

The cost of unwanted turnover is astounding, and often never really concretely calculated.  There are many statistics regarding the typical cost of an employee departure, and it is quite dependent on the position, but a general rule of thumb is .5 – 2x the salary of the incumbent.

Sound too high?

Consider both the direct and indirect costs of employee turnover:

• Fundamental direct hiring costs – recruiter, job boards, advertising, interview time, reference checks
• Departing employee’s salary, benefits costs, expenses
• Indirect costs – onboarding, ramping, training, rescheduling, lost productivity, distraction time/costs, clean up /correcting employee mistakes, customer damage, meeting time dealing with issues, legal/separation fees

HR and Talent Acquisition teams go to great lengths to try to source amazing talent to build their client’s teams, and to compliment this, one of the most effective methods for increasing the chance of selecting the most suitable candidate is including talent assessment tools in the selection process.

Talent Assessment Tools

I have been using candidate assessments for over 15 years, in different industries and environments, and the impact has been considerable.   As Chief People Officer in a rapidly growing global technology organization, our team poured over hiring statistics, reviewing turnover by department, by geography, tenure, the interview process, the questionnaires utilized and the interviewing techniques of the hiring managers.

We knew how to hire for skill, but we had to combat the firing for “fit” aspect.

What we needed to do was to infuse a more balanced approach to talent selection with the addition of behavioral, motivational and competency based assessments.   Hiring managers became conversant in the language and application of these assessments.  We all knew what to look for and how to follow up with the candidate or through reference questions.

We also learned the hard way what happened when we disregarded the information in the assessment…myself included.  One of the worst hiring decisions I made for our team could have been prevented if we had paid attention to what the assessment was telling us, rather than being charmed by the candidate.   Some of the hiring managers learned the hard way as well – but these mistakes only made us more committed to ensuring candidates completed assessments and they were properly analyzed.

How did we find a solution?

We created a common language in the organization that wasn’t limited to the recruitment process; it spilled over into many of our talent processes including development, succession planning, coaching, performance management and general communication amongst our employees.

Our culture was positively impacted.  Global turnover rates dropped from the mid 20’s to a single digit turnover percentage.  It wasn’t all because of the use of assessments, but they played an integral role in helping us achieve such an impactful result.

Penny wise or pound foolish?

For the minimal cost of assessments, and what can be learned about your potential new hire from this information, this is a wise upfront choice that I will make any day and skip the pricy turnover alternative.

If you are looking to see a positive change in your talent acquisition process, please reach out to book a free assessment of your processes.