When a ‘No-Hire’ Costs More Than a New Hire
Have you ever really taken the time to determine the cost of an unfilled position at your company? In many cases, it can be hard to quantify with an actual dollar amount. Sometimes you need to look beyond the financial impact, because there may be a psychological cost to your team as well. To really evaluate the impact of the vacancy, you need to consider these items and how they affect your organization:
Product Development – has your company’s ability to deliver a finished product to the market in a timely manner been compromised by the vacancy? Has this allowed your competition to gain an advantage?
Team Productivity – has there been a disruption in team cohesiveness or idea generation due to the vacancy? One employee can be the difference in how efficiently a well-oiled machine runs.
Individual Employee Productivity/Morale – are employees stressed, frustrated or overworked causing a slowdown in production due to the vacancy? This could be a force multiplier which can cause more attrition.
Management Responsibilities – what is the cost of management being pulled away from their normal workload to fill in for the vacancy? Highly paid employees should not be doing lower paid work.
Customer Service – have errors caused by vacancies resulted in a loss of sales/customers? It could be devastating to lose customers because you didn’t have the right type or amount of staff to handle the issue.
Company Image – has the fallout from the vacancy compromised the company’s reputation, in turn impacting recruiting efforts? We’re in a highly competitive labor market and the only way to retain the best talent is to maintain a stellar image.
Whether you realize it or not, reducing your time to hire will save your company money. However, there could be potholes on the road that require precision handling to avoid. A warm body, a bad hire or high priced consultants as a quick fix are NOT the answer. In fact, they will cost you much more in the long run. Here are a few steps you can take to make sure the ride is efficient and cost effective.
Make sure all of the decision makers are on board and have agreed to make this hire a priority before you start interviewing candidates. Create a plan and a reasonable timeline to execute the hiring process in a clear and consolidated manner and make sure to designate a point person to run the search.
Calling All Sources
Once the job requisition has been approved, start your own search – but don’t stop there. Many companies conduct searches in stages, first using internal sources. If that resource comes up empty, only then will they contact an Executive Recruiter. You are losing valuable (and costly) time by not contacting an Executive Recruiter to start your search on a contingency basis, concurrent to yours. Time is money, and you are on the clock.
In the interest of keeping your costs down, your first inclination is to negotiate with your Executive Recruiter on fees. A few percentage point reduction to the industry standard 25% fee is a drop-in–the bucket in the grand scheme of the costs associated with the open position. Furthermore, those percentage points could be the difference between the recruiter making your job a priority over their other clients’ open positions. Always think of the big picture, and remember that Executive Recruiter fees are an investment in the future of your organization, not a tax on the hiring process.
Always Be Recruiting
As a business owner or a hiring authority, you can never be too prepared when it comes to your staffing needs. Rather than putting yourself in a position to be blindsided by the resignation of a key performer, always remain connected to an Executive Recruiter who specializes in your industry. Resignations tend to come at the most inopportune times (there is never a good time). Knowing you have access to a pipeline of top talent in your industry can play a big role in quickly filling your vacant position. “We always say in our office that time kills all deals. We encourage our clients to stay in touch with us on a regular basis. If they keep us in the loop, we can help them act quickly and hire the candidates they desire.” – Mort Shor, Managing Partner, FPC of Savannah. It can also provide options to upgrade any underperformers on your staff.
First and foremost it’s important to have a replicable hiring plan that can be put into action on a moment’s notice. You never know when you will be faced with a vacancy that can slow down your company’s productivity and potentially cost you a lot of money. Understanding the overall cost associated with the ‘empty seat’ can be just the fuel you need to kick-start your expedited search. Consider the above suggestions as you work through the process and let us know how we can help. Good Luck.