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By Bruce Powell
Business leaders don’t think twice about engaging an outside expert for legal advice or accounting assistance but many of these same corporate managers will balk at the cost of engaging an outside recruiter to help them resolve their hiring needs.
The Bad News: only 1/3 of all hires are successful.
It’s not uncommon for businesses to make a bad hire. In most cases, only one-third of all hiring decisions are deemed successful; one-third are minimally effective; and one-third are outright failures. The cost of all these mis-hires goes far beyond the cost of their salary. Unfortunately, when you add up the numbers, the cost of mis-hiring is often a company’s biggest and most poorly managed expense. And in no other area of business would management accept such mediocre performance on a regular basis.
How do you fix this?
Unfortunately, there’s no refund for the time, money and resources your company pour into bad personnel decisions, however, there are ways to improve your odds of success.
Believe it or not, working with a good recruiter is usually the most cost-effective way to hire better. Good recruiters bring professional process, industry insight, and an objective perspective to the hiring table. Process and a wider recruitment net guarantee you better hiring results. The counsel they can offer you about the market and strategies to retain your existing employees can be invaluable .They can tell you who’s good, who’s not and why. They have their fingers on the pulse of the market.
This is an absolutely critical step to secure top talent and something few companies have the resources or experience to do themselves. Ultimately it leads to better hiring.
A good recruiter will:
But what about the cost?
Recruiters can appear expensive, often charging a flat rate or percentage fee between 20 and 30 per cent of a new hire’s annual base salary. When you compare this to the opportunity, turnover and additional soft costs of a bad hire the value is much more obvious.
Businesses worried about recruiter costs usually don’t calculate the intangible cost of hiring poorly. Of course there’s no guarantee. You need to work with recruiters who understand the importance of identifying A-level talent, recruiters who are experts in their fields and committed to their craft to get the best results. Even then you will make the occasional mistake BUT your odds of a wrong hire are far reduced. And the cumulative and eroding effect of B-level hires is diminished.
Bruce Powell is a Toronto based recruiter and has been responsible for hiring, developing, and retaining top talent; specializing in a variety of industry verticals including, executive Search, Managed Services, Career Management, Marketing, Banking, Telecom, Media, Entertainment and Marketing Services including Advertising, Promotion, Direct Marketing, Internet, e-Business.IQ PARTNERS is Canada’s leading Executive Search & Recruitment firm. We help companies hire better, hire less and retain more. We specialize in Marketing, Communications, Consumer Goods & Services, Retail, Sales, Technology, Finance, HR & Operations and operate at the mid-to-senior management
Bruce co-founded IQ PARTNERS in 2001 and currently operates as Managing Partner. His personal background includes hands-on management experience in sales, marketing and marketing services. He has built management teams for a wide variety of marketing, communications, media and technology companies. He has also participated in several M&A transactions for service-based companies and is frequently called upon as a resource in the planning and negotiation of such deals.