Talking about bad hiring decisions, someone asked me why it should affect the company so much- you don’t like the person’s performance, fire him-end of the story. There’s more to that story, did you know that one bad hiring decision, if not rectified within 6 months – the cost of replacement of that employee is two and a half times the person’s annual salary? (according to Dr Pierre Mornell)
That means to say, terminating a person earning Rs. 200,000 p.a will lead to cost of more than Rs. 500,000. Because you lose out on the training and orientation cost, the performance incentives, finding different platforms to find a replacement and termination costs. The effect is not just monetary, your company’s reputation suffers too as your attrition rate goes up.
So the right person on the right job is an absolute requisite. You know this if you are an entrepreneur yourself; a wrong person can cost you your time, money and energy. No one wants to hire the bad guy, but the bad guy comes disguised as a good one. But eventually, his innate nature will take over and before he’s even settled own, it’s time to fire him. So how do you avoid making such bad hiring decisions?
The following points will help you eliminate bad hiring decision
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1. Hire based on potential, not past performance
This is an important mantra. People are dynamic and are prone to change. A person well behaved with me, might behave just the opposite with you. When hiring, the importance must be given to the skills acquired and experience earned and not to the past performances. Because each work environment plays an important role in shaping the individual and how the individual reacts can vary and is very unpredictable. So hire based on potential.
2. Behavioral tests
Many big corporations use this technique to hire staff.
Behavioral tests are tests which help analyze your personality and how you deal in crisis situations. You do run the risk of getting answers of how they would want to react and not, how would actually react, this test is worth it if you time the test. If the applicant is given only a couple of seconds for each question, he has no time to think what you would expect as an answer.
3. Sell your company
Each candidate you shortlist for the post is now going to represent your brand. He helps in building your brand image and reputation, so it is necessary the person on job loves your enterprise. Assure him of a bright future and the ideal work environment for him to stick to your company. Remember loyalty is the biggest contribution of an employee.
4. The right mix
Always choose candidates who have balanced academics and extra-curricular activities in their student life. This is crucial for their performance, it brings out the best in them as they know the importance of health and mental health. Each designation requires different types of personalities, like a salesman would require less of academics than the CEO of the company.
5. The personal touch
Each person you appoint is an important resource to your company because they help you earn your profits at the end of the day. So the conventional companies pay salary but if you want to curb your attrition rate to nil then make sure your employee’s goal is yours too. Ask them where they see themselves in 3 years and what would be their dream role for the company. Communicate to them as to how to reach this goal of theirs so that the job satisfaction factor is high.
The right person on the right job is a major plus point in operating effectively. It not only helps in realizing your company goals but also creates a positive energy in your workspace. It is obvious that when your employees are enjoying their roles, your goodwill is elevating.
