4 Signs Your Hiring System Needs Fixing

4 Indications It’s Time to Improve Your Hiring System

Why should you even care about hiring systems? You need a new employee, you hire a new employee. Right? It seems simple enough. Unfortunately, study after study shows that mis-hiring is widespread (according to the University of Chicago, 45-50% of hires are unsuccessful). Worse, these mis-hires are eating away at your company’s productivity and profitability.

Most employers don’t believe they have a hiring problem, which is why mis-hiring is so rampant. It’s not too difficult to identify. See if any of these indicators apply to you:

Indication #1:
You Have No Hiring System

Do you have a hiring system at all? Perhaps you are a smaller company and think that you don’t need a hiring system yet. Maybe you use random systems that are slightly different for each candidate, or across departments. If you lack consistency, have no standard interview questions, no standard onboarding system, and no standard assessment tool, you are sure to have one outcome: random results.

It’s no wonder so many companies get results that reflect the odds of a coin toss (roughly 50/50) because that’s what they are doing when they hire without a strategic system. They end up with employees who may or may not share the company’s values. Who may or may not fit with the company’s culture. Who may or may not perform well. Or who may perform but have significant personality conflicts.  All of these outcomes undermine performance, employee morale, and ultimately, profitability.

Indication #2:
You Ask Yourself, “Out of My 10 Last Hires, Who Would I Rehire?” And the Answer Is Less Than 7

Seven is a pretty low bar. 70% is a C-grade, and it’s nothing extraordinary, just barely passable. That means you are still eating the costs for three employees who for some reason or other didn’t turn out to be a great fit. Do you want to guess how many employees most CEOs I speak with would re-hire, when I ask them this question? Two or three.

Keep in mind, this is not just from CEOs who seek out our services. I commonly ask this of CEOs out of curiosity. So it’s safe to say this 20-30% average hiring success rate is coming from people who are unaware that they have a hiring issue. Most people believe they are good at hiring. They want to believe they are a good judge of character. In reality, they are likely making at least one of seven common hiring mistakes.

Think about it; would you keep an accountant who had a 30% accuracy rate? Of course not. It’s not an acceptable level of performance for a professional. If you are hiring with 30% accuracy, you not only have identified a problem but also a great opportunity for your organization to improve performance through better hiring. A 70% failure rate leaves a lot of room to grow.

Indication #3:
Most of Your Hires Leave Within 90 Days

PwC Saratoga found that 80% of the time when an employee leaves in the first 90 days, it’s a selection issue. In other words, the wrong person was hired; perhaps based on fit, match, or culture. When this occurs, your new hire struggles to become productive and efficient; they flounder. You end up with unhappy co-workers, unhappy customers, and obviously, an unhappy new hire.

Indication #4:
You Have Trouble Attracting Talent for Your Open Positions

If you have a poor hiring system, odds are that your employer brand will suffer. We live in an online world. If your company is an unknown quantity, or worse, has a poor reputation on sites such as Glassdoor.com, top candidates may decide it’s not worth pursuing a job there. Further, if job seekers are treated poorly in the vetting process, you will lose your best candidates and your reputation will likely suffer. Don’t have a negative reputation to overcome? Your job still may not be posted on the most appropriate sites, or may not be written to attract your best candidate.

Poor hiring practices also lead to high turnover, placing a greater burden on other employees, which lowers morale. That is difficult to hide from everyone they interact with ─ including customers and other job candidates. Unhappy employees may be reluctant to refer people they know to open positions, and may be plotting their own escape. A broken hiring system has the real potential to create ripple effects that are felt across your entire organization.

How Can a Solid Hiring System Help You Avoid These Negative Outcomes?

The good news is that by correcting deficiencies in your hiring system you can create ripple effects that are positive, boosting performance, productivity, employee engagement and retention, employer brand, and your company’s bottom line.

Here’s an outline of what a hiring system can do:

  • Helps you identify your target of who and how to hire
    • Articulate your true needs
    • Follow a defined process
  • Helps you attract the right candidates
    • More accurate job descriptions
    • Better ad placements
  • Improves consistency of hires
    • Follow a strategic process for all candidates
  • Helps you select the right candidates
    • Know what questions to ask
    • Employ consistent interviews and assessments

Is it time to improve your hiring system?

If you are in the Columbus area, join us on October 16th for our Choosing Winners System Training.

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