The hiring of a new employee is not only time consuming, but can prove to be extremely costly should the wrong individual be selected. For many businesses, a systematic approach to the process of hiring usually ends with the creation of a job description or set of job duties. From there, the process can, and often does, go in any number of directions depending on the nature and level of the job, internal hiring practices and the preferences of those assigned responsibility to make it happen.
The lack of a systematic approach to hiring leaves hiring managers and job applicants completely dissatisfied with the hiring process. Not surprisingly, a huge percentage of hires don’t work out.
If you need any further convincing that there has to be a better way, just take a look at these statistics:-
- 70% dissatisfied — 70% of the external customers (applicants) and 28% of the internal customers (hiring managers) indicate they are dissatisfied with the hiring process (Source: Staffing.org).
- 50% customer regret — 50% of the processes users (both managers and new hires) later regret their “buying” decision (Source: The Recruiting Roundtable). In addition, 25% of new hires later regret taking their new job within one year (Source: Challenger, Gray)
- 46% turnover — 46% of new hires leave their jobs within the first year (Source: eBullpen, LLC) and 50% of current employees are actively seeking or are planning to seek a new job (Source: Deloitte).
- 46% failure rate — 46% of new hires must be classified as failures within their first 18 months (fired, pressured to quit, required disciplinary action, etc.) (Source: Leadership IQ). In addition, 58% of the highest-priority hires, new executives hired from the outside, fail in their new position within 18 months (Source: Michael Watkins).
- Only a 19% success rate — only one out of five of the process output can be classified as unequivocal successes (Source: Leadership IQ).
Some additional data points to consider include:
- 66% regret hiring decisions — Nearly two-thirds of hiring managers come to regret their interview-based hiring decisions (Source: DDI)
- 50% new executive turnover — nearly half of new executive hires quit or are fired within the first 18 months at a new employer (Source: Corporate Leadership Council).
- Newly promoted executives don’t do much better (40% of newly promoted managers and executives fail within 18 months of starting a new job (Source: Manchester, Inc).
- Less than 50% are qualified — a majority of managers surveyed (59%) believe that less than half of all candidates they interviewed were qualified (Source: eBullpen, LLC).
- 65% lie on resumes — the key data source that we rely on to source and narrow down applicants contains untrue information more than half the time (Source: The Risk Advisory Group )
- Resume-sorting failures — Of all the “perfect resumes” sent out by mystery shopper candidates, only 12% were actually scheduled for interviews (Source: Hodes’ Healthcare).
- Bottom performers produce less — hiring and retaining below or even average performers have real opportunity costs because top performers can increase productivity, revenue, and profit by between 40% and 67% over average performers (Source: McKinsey & Co.).
Can you think of any other business function where such a high failure rate would be tolerated?
If this was production, supply chain, finance or customer satisfaction, the six-sigma consultants and process re-engineering team would be all over them! But for hiring, the inconsistent and clearly ineffective approach is allowed to continue.
The lack of a systematic approach is the single biggest reason for hiring failure and the motivation for us to develop the LBA Hiring Management System™.
