Have you got £12,000 to throw away? Employ the wrong senior candidate and that’s how much it will cost you. According to the Chartered Institute of Personnel and Development (CIPD), the average cost of recruiting the wrong person is £8,200, rising to £12,000 for senior managers or directors.
When it comes to ‘hiring the right person for the job’, more and more organisations are becoming rigorous with their recruitment processes, including extra stages of interviews, written assessments and character profiling. Now that we are coming out of the recession and with more graduates and applicants than ever before, recruitment is becoming fiercer for employers and candidates alike.
Jarrod Mollison, Business Solutions Director of Datum RPO, which helps companies to make their recruitment processes more efficient, looks at the various challenges to recruitment in the Financial Services (FS) sector, and suggests five tips to help get it right.
7% of all UK employment belongs to the financial services industry. With a sector that boasts over 70,000 financial services and accountancy businesses including auditing, tax, banking and insurance and everything in between, the sector is a natural competition-based industry. Following recovery from the 2008/09 financial crisis, it is also one of the fastest growing. Sourcing the best candidates is particularly tough in this industry. Workers must not only have specialised skills but pass stringent background tests.
In today’s competitive market, businesses, just like customers, need to ensure that they are getting value for their money. Employing the wrong person for a role is a costly mistake to make.Further legislation and an exposed media have the resulting implications that a candidate is not only a financial decision by an organisation, but a reputational one as well. Quite simply, it is vital for any business to get recruitment right. This means that it should not only be followed correctly but also done well. With recent changes to fairness and equality legislation, employers have to diligently ensure that no candidate is discriminated against during the selection process. Therefore, following the process correctly should maintain the reputation of a company.
Underinvestment in the best computers would be seen as a bad business decision, so why is the same thought not applied to recruiting the best candidates? Often, good recruitment consultancies go through the hard work by virtue of possessing a database of candidates from around the country best suited for any required job set. Furthermore, Recruitment Process Outsourcing (RPO) differs from what recruitment agencies do, in that the RPO assumes ownership of recruitment and therefore responsibility of the results.
According to HR Review, a single recruitment costs a company approximately 25% of the basic salary they are recruiting for, whereas recruiting the wrong person could cost anything up to 50%. This cost excludes the time spent interviewing the candidate and any cost to make them redundant. In many situations, it’s hard to tally the exact time it takes to train, work with or replace candidates; therefore, it’s difficult to pin down the exact costs.
Increasingly, people are being dismissed because of their behaviour rather than capability, so a good all-round fit is essential. Even a seemingly ‘right’ candidate who does not get on well with his or her colleagues could prove detrimental to a business. So how should a FS business conduct its recruitment?
Here are my five top tips to get recruitment right:
- Quality over quantity: advertising a position on every jobsite may gain you a large pool of candidates, but most of them will not be ideal. A candidate who is the best of a poor bunch does not make them a good candidate. Instead, advertise a position on your web alone, and the candidates you attract will be the ones displaying an initiative to check specifically for your company.
- A good interviewer does not necessarily make a good worker: Seems obvious but our prime judgment of how well someone would do a job is to measure how well they talk. This may require further tests to assess how well a candidate could perform daily tasks. Think about some of history’s greatest innovators – Albert Einstein, Steve Jobs, Richard Branson – it would be hard to imagine they’d perform well in most interviews.
- Gut instinct matters but alongside a candidate specification: have faith that your experience within an organisation will help direct your judgement, but this should be underpinned by a comprehensive and objective assessment of the candidate’s suitability.Whilst it’s useful to measure the attitude of a candidate you could be sitting 40 hours a week opposite, this does not mean that friendships or likeability should guarantee a contract. Therefore, involving another person in the recruitment process could provide a useful second opinion. So a bit of both head and heart in this case.
- Team satisfaction: a well-skilled demotivated team is no better than a badly skilled motivated team. Beyond their CV, you must ask: will they fit within the team ethos? Will they enhance your team or become a point of conflict? Don’t reply on an introvert to fit into a business that thrives on team energy, or someone with poor interpersonal skills to be able to build positive relationships with your clients.
- Don’t act out of desperation: desperate people don’t make good decisions. Just as it’s advised to sleep on every big decision, hiring a candidate is a big decision. Waiting a few nights to potentially work with someone for years is worth it. This applies throughout the recruitment process – getting the job specification right, having stages of interviews and assessments, chasing up referees and training a new employee. Just as it’s wise to take things slowly with most long-term relationships in life, the same logic can be applied here.
Many companies hesitate to invest heavily before a candidate has even walked through the door, but just as with most business deals, this due diligence is imperative beforehand. Before a company even considers advertising a vacancy, it must seek a thorough evaluation as to what they’re exactly looking for. However, the upshot of all of this is that if done correctly, a business will see no end to the benefits, as the suitable person will continuously improve the businesses’ daily operation.