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Does Your Hiring Process Resemble a Trip to Lost Wages?

by Charlie Hauck

And I don’t have to tell you why people call that place Lost Wages, do I? I am headed there to present to a group of business owners soon, so the idea of what really goes on in most hiring processes struck as cruel irony. Phrases like Resume Roulette and Credential Craps started coming to mind as I thought about my program. Just because a candidate’s resume looks like he or she is an ace doesn’t guarantee the face card will follow for a winning hand of Black Jack. It is scary to think how often people have said “hit me” only to bust on what looked like a sure winner.

How much does it cost?

When you consider the bottom line impact of a hiring mistake, Lost Wages could not be a more appropriate reference. Some people calculate the cost of a bad hire to be 1.5 times the annual salary of the employee. And depending on the industry, or the level of the position, that figure could be very conservative. Despite hard times, we still hear of companies where turnover is as high as 15% in some areas. That math is staggering when you consider there are enough tools available to minimize hiring mistakes. Why so many business leaders/owners still consider assessments or testing to be an unnecessary expense shocks me.

It’s not real money is it?

The costs of bad hiring practices may not show up on a balance sheet as a line item, and perhaps everyone has just accepted them as just the cost of doing business, but when the impact of not making the right choice is so high, how can companies afford to not do things differently? Upgrading your IT system happens because you found something that is more efficient and can help your profitability. Doesn’t it make sense to upgrade the expectation of what kind of human assets you add to your organization?

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