If you're a hiring manager make sure you seriously consider retaining an executive search firm to find your next senior level employee. Why? Because you can’t afford not to.
The cost of a wrong hiring decision surprises even veteran recruiters. Forbes Magazine reported recently that half of hiring and HR managers estimate bad hires have cost their companies “thousands of dollars.” But when you look at the numbers, that’s a fairly conservative view.
Costs of the Wrong Hire
According to the U.S. Department of Labor, the cost of a wrong hire is at least 30 percent of the employee’s first-year earnings. For a small to mid-sized company, a five-figure investment in the wrong person is a threat to the business.
While the financial impact may be quantifiable in terms of recruitment costs, compensation, benefits, and severance costs, the impact of a bad hire on the culture of an organization can be far greater and reach far beyond the employee’s actual tenure with the company. Poor performers lower the bar for performance and cause team morale to suffer. Absolute costs escalate when taking into account outright mistakes made by the bad hire, missed opportunities, excessive managerial time wasted in dealing with the bad hire and the stress put upon your team by a cultural misfit's misbehavior.
What's the best way to hire great employees?
The hard truth is that every hiring manager will make a bad hire in his or her life, and there’s no formula or interviewing technique to ensure every new employee is a great one. People are complicated, organizations are complicated, matching people and organizations is complicated. It's difficult to predict who will be successful.
So, what can you do to stack the deck in your favor? First and foremost treat recruiting top performers as your most important job. Do not leave recruiting your key team members to unsolicited resumes, referrals, job postings, or searches on social media and job boards alone. It’s important to recognize that top talent is usually not out looking for a new job. Top talented performers keep their heads down, focused on the tasks before them.
Where can you turn to avoid making a costly hiring error?
How Executive Search Can Find and Recruit Top Talent for You
Executive search firms help organizations recruit mid-level to senior-level executives for key positions. Often these positions are not advertised and the people the retained firm recruits aren’t actively looking to make a change. These candidates are referred to as "passive candidates." Experienced recruiters know how to find them, present your opportunity to them, and convince them to consider a new, challenging position.
Here are some benefits you should look for and expect when working with a retained search firm.
- A quality executive search firm is proactive and uses systematic search and outreach methods to find and recruit the best possible candidates.
- Significant time is spent with company leaders to understand the requirements of the position including cultural fit, and other factors beyond professional experience and technical skills.
- The emphasis is placed on quality of candidates, not quantity of candidates. This is a key differentiator of retained or executive search as compared to "contingency" recruiting. Contingency recruiters generally use a different recruitment methodology. They attempt to get as many candidates in front of the hiring manager as soon as possible in the hope that one of the of the candidates will get hired and the contingency search firm will get paid their fee.
How do you choose the right executive recruiter for you?
Each executive search firm has a method of finding candidates for a client company. Once you’ve decided you would rather have your internal HR team working on other projects and want to consider using a retained search firm to find top quality candidates, make sure you are comfortable with the maturity and relevant experience of the recruiter who will be representing you, your brand and your company in the marketplace.
Download our Executive Search case study to learn how Austin Powder's partnership with Dise & Company resulted in proven results.