Yesterday I blogged on Simon Swan’s article in the latest edition of Management Today and got quite a reaction. A whole load of people, shocked at the costs to their business, contacted me with questions and to discuss team restructures. They ranged from large businesses with a number of teams to a small company of four considering expanding to a team of just five people.

Not so boring stats
All of them were shocked to hear the answers to the “INfrequently asked questions”.
that business never asks*:

• What percentage of new hires fail within two years of appointment?
  A: 40%
• What % or restructured teams fail to meet objectives?
  A: 42%
• What % of projects are completed to time, budget and specification?
  A: 28%

But it doesn’t have to be like this and I talked through my callers an eighteen minute SKYPE call when I explained how to reduce the risks of new hire and team failure…easily.
They’ve urged me to offer the same eighteen minutes to my SKYPE contacts (stephenharvarddavis) and I thought I would offer this to my blog readers and at no charge.

If you want to take me up on this then email me at Stephen@assimilating-talent.com so that we can arrange a mutually convenient time for a SKYPE call.
For the moment I’m restricting this to the first ten respondents and during the next seven days so don’t let time pass if you want to take me up on the offer

* Stats from various sources including Fortune Magazine and HBR

Did you see Simon Swans article in the latest edition of Management Today*? Simon talks about the importance of interviewing and quotes Harvard University research that says that new hire failure costs can amount to five times salary. I thought the costs understated and suspect that Simon’s probably taken a fixed cost of salary and direct expenses but not included the lost opportunity costs that result from a new hire failure.

At this point you probably might discount my own research as being inflated, if I included it here, so let me point to Brad Smart’s book “Topgrading” ,as evidence, where he wrote that his research into new hire failure could amount to 24 times the salary. Much of these come from lost opportunities which, depending upon position, include lost sales, projects not met and so on

I thought it interesting that Simon’s solutions to the problem was to ensure that the Resume (CV) was accurate and that the interview process robust. All good stuff. However, a crucial part of the process is the six months that a company spends integrating the individual into the new job. 

* 5th August 2011

I’ve recently heard suggestions that the
more interviews and hoops candidates are expected to jump through…the
better the final quality of hire. Then a similar question was asked on LinkedIn and I thought I would repeat the answer in my blog.

The proposition is WRONG 

Very sorry, but it’s wrong. Let me clarify: I have spent the last ten years talking to CEO’s about
hiring and integrating people into their firm faster and more
profitably. Asking a candidate to do more and more tests and interviews simply clouds the process. Two interviews, one assessment and a follow up meeting to negotiate terms is enough. In my experience having a new hire failure or poor hires has more to do
with the lack of interview experience by the interviewer, an inability of interviewer to assess candidates correctly and
poor integration by the business.

Interviewers training
Directors that interview people for a job do so about two or three times
a year. Hardly enough time to gain great expertise or to maintain that
ability. This may be a reason why businesses rely on more and more interviews and tests. However, again in
my experience, tests are only as good as the ability to understand the
results. (Too many people will fix on one statistic from a test and base their
choice on that as opposed to a rounded assessment).

One solution is to encourage interviewers to undergo some training
before undertaking important interviews. Then to have some experts on
the interview panel that can provide focussed views.

Cost of failed hire can be shedloads of money off the bottom line
Interestingly the COSTS of NEW HIRE FAILURE can be huge and my research
confirms Brad Smart’s research that the cost of failure can range from
10 – 24 times salary.

So if you’re hiring at a salary of $45,000, choose a multiple and see how much a new hire failure could cost your business!

Links:

• 
  http://www.youtube.com/user/stephenharvarddavis?feature=mhee