Companies have never recruited as much as they do today. They spend more time doing it and invest more money to do it. But why are so many companies wrong? What is the real cost of their mistakes? And is the increased emphasis on personality giving way to competence?
David Bernard, CEO of innovative recruiting technology company AssessFirst, believes companies can improve both their bottom line and their personality-driven cultures by modernizing the recruiting process.
The traditional hiring process follows a pattern that most of us know and have experienced. It looks like this: HR determines what the duties of the vacant position are with hiring managers and defines the attributes required to fill it. Job offers are published and candidates apply. An interview is organized. The successful candidate is offered the post.
This process has undergone some changes over the years, but the essential structure has remained the same. The problem with this model is that we don’t know how successful it is. Most companies can tell you how much they are spending on finding the perfect candidate. But far too few of them can explain the true cost per rental.
What we do know is that the traditional recruiting process is broken. I often put my head in my hands when I read the myriad of HR reports that reveal the prevalence of bad hiring. The 2020 Career Builder report offered little comfort. He said 74% of employers hired the wrong person last year. It cost an average of £ 10,843. This is madness.
Productivity should be a key factor when finding a new candidate. Ideally, the new hire should be more productive – whether through skills, efficiency, or both – so that profit opportunities can be maximized. This makes a bad hire doubly costly. Not only are companies paying for a wasted recruiting process with inefficient training and slowed productivity, but the cost of missing out on a chance to improve the quality and volume of production is also detrimental in the medium term. On the contrary, profits which could have increased suffer as a result.
McKinsey & Company research suggests that the top 5% of talent is 8 times more productive than average talent. Of course, every employer should aim to recruit as close to this top 5% as possible. Now you might, if you are an employer or a recruiter, consider this to be impossible – “It’s okay for the Google and the Apple of this world, but how do I find that top 5%?” It doesn’t have to be an impossible aspiration. There are solutions that I’ll get to shortly, but first, let’s see how a bad hire can hurt profitability.
The $ 200,000 / $ 50,000 formula demonstrated by HR Daily is a fantastic illustration of the problem. He describes how an employee who generates $ 200,000 in income would make his employer a profit margin of $ 80,000 on hiring. But an employee of the top 25% of the talent pool would give the company a profit margin of $ 130,000 because it will generate more revenue. A bad hiring therefore results in a shortfall of $ 50,000.
“The first thing we look for when hiring new employees is personality. To me, personality always trumps intelligence in books. – Sir Richard Branson
It’s a statement that divides recruiters, business owners, and HR professionals.
While the claim that personality trumps “intelligence from the books” is controversial, it is indisputable that character is a vital and too often overlooked requirement for any given position.
Finding candidates who match a company’s core values and culture is a profitable exercise, increasing the likelihood that good candidates can be selected. It also provides the opportunity to diversify your talent pool, bringing in people who think differently from other staff to challenge existing standards and processes.
Deciding between two or more candidates who appear to offer similar advantages is difficult; the choice can be simplified with in-depth personality data. Personality is actually a predictor of future job performance that goes beyond the quality of information you can get from analyzing a person’s resume or qualifications.
Comprehensive personality reviews increase the chances of hiring the best people. And the best people generate healthy profitability.
At AssessFirst, our AI recruiting platform collects hundreds of data points about a candidate without the candidate having to complete long questionnaires. This gives employers two crucial advantages in the hiring process; it provides a breakdown of a candidate’s personality type. And it helps predict each candidate’s behavior, revealing the tasks, projects, and even teams where they will have the most impact.
Collecting objective personality data provides information that can help eradicate unconscious biases. All employers are susceptible, for example, to confirmation or affinity bias during the recruitment process. This bias, perhaps more than any other factor, contributes to bad hires.
Those who continue to recruit without the benefits of artificial intelligence are likely to be among the 74% of employers who make the wrong hire. Data-driven personality recruiting goes far beyond a simple personality check-off. It is an in-depth analysis tool inspired by the science of behavior: the assessment of cognitive and non-cognitive models. Here’s how employers can tap into the top 5% specific to their business and their culture.
The “advertise, apply, interview” recruiting model is as archaic a process as it is in the business world. AI-powered recruiting is more frequently associated with blue-chip tech companies, but I think a much larger section of the business community, many of whom are facing the uncertainty of the post-pandemic market, don’t can’t afford to be wrong when it comes to recruiting. And it’s the personality measurements that will help them make the right choices.