If you hire people, you need to read this.
If you ever look for a job, you need to read this.
I have discussed more than 23,000 job openings with employers since 1973. I have worked on search assignments from everything from an hourly maintenance person for a third shift manufacturing environment to presidents and CEOs. Most hiring authorities, from the third shift maintenance supervisor to members of the board, feel like they are very good at hiring (when they’re really not) and that it will only take 45 days to fill the lower to medium salary range positions and 90 to 120 days to fill the higher-level positions (the reality is more like 90 to 120 days on the lower to medium salaried positions and 150 to 180 days for the higher positions – totally unrealistic).
Even though every hiring authority starts out with good intentions, the hiring process drags on for way longer than everyone imagines it will. The major reason for this? People are afraid of making a mistake. In spite of what anyone says, most hiring authorities really don’t like hiring. Now very few managers will ever admit that they downright hate hiring and they’ll tell you that it’s “just part of the job,” but in their hearts they don’t like it. Why? Because when people make a poor hiring decision literally everybody knows it and sees it and that manager is being judged based on that poor decision.
Accounting managers are hired because they’re good at managing the accounting function. If they make an accounting mistake, few people may know it and, if it’s caught in time, it can be erased and rectified. An engineering manager is hired to manage the engineering function and the people that are in the department. If an engineering mistake is made even a reasonable amount of quality control can discover it and fix it. A sales manager who is hired to manage sales can even afford to lose a sale and make it up by making more sales.
But when one of these managers makes a bad hire, most everyone in the company can see it and, since it takes forever to get rid of most bad hires the manager is looked upon as a doofus because he or she hired one. And since the mistake of a bad hire can’t be quickly and easily rectified, the “mistake” walks around the company reminding everyone what a doofus the hiring authority was to hire them in the first place.
In all my years of recruiting I don’t think I’ve ever had a company looking to hire a manager and have, as part of its criteria for hiring, “documentable success in hiring excellent and productive subordinates.” And even if they did, it certainly is difficult to get an objective evaluation of a person’s ability to hire. A manager’s ability to recruit, hire and retain good employees should be one of the main considerations in hiring any manager. But it’s not. It is assumed that any manager with subordinates is good at hiring. But they’re not… most of the time.
So, hiring cycles drag on and on and on. What everyone thinks will take 30 to 45 days takes four to six months because people don’t like doing it and, in their hearts, they know they’re not very good at it. Ninety-nine percent of the hiring authorities in the United States have absolutely no idea the cost to their company that a vacancy has over even a short period of time. Numerous studies, especially one at Harvard University, find that the average value of a productive employee is roughly two and a half times their salary rate. For revenue producing employees, the cost of that vacancy is phenomenal.
On top of the fact that when a vacancy occurs, “It couldn’t have come at a worse time… I’m going to have to get people in the department to cover for this person until I find a replacement, and they are going to be pissed… I’m going to have to do the work this person was doing until I find a replacement.” There are a ton of other emotionally charged feelings… and they’re all bad. They perseverate, “We don’t want to make a mistake… We don’t want to make a mistake… We don’t want to make a mistake… We don’t want to make a mistake… I can’t hire now, I have to do my job… I can’t hire now, I have to do my job… I can’t hire now I have to do my job” when the truth is that it is simply easier to postpone hiring and (much easier) to do the day-to-day job. So, hiring drags on.
I have provided a table that we give to our clients to help them realize, on top of everything else, what a vacant position actually cost them. It sobers them up real quickly. Highlight this address and go to:
http://bit.ly/1TtLK06
Put in the salary range of any vacancy you might have and see what it’s really costing you and your company. If you’re looking for a revenue producing candidate, like sales, the formula is even more dramatic.
So, if you’ve been looking for an assistant controller at a $90,000 salary for eight weeks, you have cost your company $34,615.00. If you’ve been looking for an accountant or production manager who left your company four weeks ago at a $50,000 salary, it has cost your company $14,423.00. And, as you know four weeks can go by in a heartbeat.
If you are a candidate, you can use this table to help you get a job. Last week, one of our sales candidates was in the final interview process with one of our clients. He was interviewing with a VP of sales, his boss and the vice president of finance. Each interview was a “one on one.” As he wrapped up each individual interview, he said, “I want to leave you one last thing,” and he handed each one of the interviewing authorities a small piece of paper with the figure of $93,307.00 written on it. As they looked at it, wondering what it was, he calmly stated, “The quota for this territory is $1.2 million and this is the amount you are losing every month by not having me in this job.” He then paused and asked, “When can I go to work?” Guess who got hired?
Well, I’m sure you get the idea. Most hiring managers are so close to the forest they miss the trees. The cost of a vacancy is real and can motivate managers to take action.
