A 2014 report from Oxford Economics found that the average cost of hiring a new worker is a not-insignificant £30,614. That’s split into two components:
i) £25,181 in lost output while the employee gets up to speed – or reaches ‘optimal productivity’, as the report puts it, and…
ii) £5,433 to cover the logistical costs of finding and absorbing said new employee.
That second sum is typically allocated across areas such as advertising, using a recruitment agency and employing a temporary worker – plus the internal costs of interviewing and inducting the new member of staff.
As you can see, then, the bulk of that overall cost is effectively attributed to learning the job.
On that basis, we can safely assume that it takes quite a long time, on average, for any new employee to hit their stride and find the level of fluency they will need in their role.
So, what would be the potential impacts upon an organisation if it had a sudden – and huge – influx of brand-new staff in a highly concentrated period of time?
Well, it looks like we’re about to find out…
All hands on deck
Early last month, it emerged that disruptive automaker Tesla is ramping up its hiring efforts in a bid to boost productivity.
And when I say “ramping up”, I mean massively. Between its main vehicular-assembly plant in Fremont, California and its Gigafactory battery-making unit in Sparks, Nevada, the firm is taking on an additional 400 staff per week.
Tesla hopes to have enough hands on deck to ensure that, by the end of this month, it’ll be making at least 6,000 copies per week of its Model 3 electric car.
It’s interesting to note that, in response to Tesla’s announcement, a Ford spokeswoman said that the quickest her firm would ever hire 400 new recruits would be over a period of 12 to 13 weeks.
That would involve a fairly intensive phase of screening and scrutiny to ensure that the recruits were ‘match fit’ for the work ahead.
Those are pretty important points, particularly as they’ve issued from a longstanding car brand. But they’re not the only reasons why such strategies – while grabbing headlines – may not be all good news for Tesla, or its new hires.
The whole process of how you learn your job tends to be an informal one, with new workers picking up many critical skills and approaches from their peers. In a situation where the proportion of new staff to old keeps on increasing, who are all those new recruits going to learn from?
Another concern relates to the burden this strategy places on those who are doing the recruiting. The HR department would be responsible for handling all of the logistical areas that Oxford Economics outlines, and would oversee any screening system in the vein of what Ford’s spokeswoman suggests.
But ultimately, it’s line managers – and perhaps even the candidates’ prospective, new colleagues – who will have the final say. And if you have a huge influx of new people, then those line managers and prospective colleagues won’t be doing their jobs, because they’ll be so heavily entrenched in vetting candidates.
If the firm decides to outsource this whole process – or even to place it exclusively in the hands of the HR department – to ensure that it doesn’t overload line managers and current staff, that will only add another element of slowdown to the business of helping inductees form new relationships with co-workers. Our research has stressed how vital those relationships are.
Any hiring policy like this may not yield the immediate increase in productivity that it intends to achieve. New people need time and support to internalise the organisation’s culture – and to form those all-important, valuable relationships with their managers.