Technology and our workforce are advancing at rapid speeds. So why are our hiring processes still stuck in the dark ages?
Technology and our workforce are evolving at a rapid pace. So why are our hiring practices still stuck in the dark ages?
It's easy to get used to doing things the way they have always been done. But in doing so, some companies are overlooking an extremely important fact that is standing in the way of their success:
The hiring process is completely broken.
Consider these surprising facts:
● 46 percent of all new hires fail within 18 months
● 40-60 percent of management new hires fail within 18 months
● Nearly 50 percent of executive new hires fail within 18 months
When you look at these numbers, it's clear that the status quo of our hiring practices is no longer effective. So what are we doing wrong?
To understand why hiring fails so often, let us take a closer look at what the standard hiring process looks like in today's organizations.
The Standard Hiring Process
Here’s how hiring happens at a large majority of companies — from Fortune 500’s to SMB's:
Your company advertises a job opening
When your company is looking to fill a new position, the first step is usually to write a new job description and post the job on online job boards.
There are currently thousands of job boards on the Internet, so finding and narrowing down the best ones for you can be time-consuming and costly. In fact, studies show that companies typically spend about $170 on a job posting per job board they post a job on.
Once your job is posted, you need to make sure that it is constantly renewed and attracts the attention of job seekers. Otherwise, you will have to rewrite and retarget your ad.
Time is spent sorting through hundreds — or thousands — of candidates
Once your job ad attracts applicants, you need to start sifting through them. On average, a company receives about 250 applications for every job posting, and even more for lower-level positions.
Statistically, more than half of those applicants do not meet your minimum qualifications, and a portion of them may not have even read your entire job posting. Of these 250 or more resumes, you will probably want to interview 4 to 6 candidates.
Sending out requests for interviews
By the time a company starts interviewing, about two months have passed on average. By this time, some of the people you want to interview have probably already accepted another job.
So let us say you have received a response from four candidates.
When it's time to interview the handful of candidates you think are right for you, you'll need to be prepared for some appointment coordination. If your company is a larger organization, you will likely want your candidate to interview with HR, team members and members of your leadership team. Fitting multiple interviews into everyone's calendars can feel like a game of Tetris.
Even when you finally have all the appointments wrapped up, you have to expect that there may be postponements. Two of your candidates are late. Leadership can not accommodate them, so they have to reschedule.
You quickly discover that two of your candidates are not a good fit right away. They do not have the experience or qualifications they seemed to have on their resumes. Or they were not clear about what the job entails. One clearly will not fit into the company culture.
One candidate seems as though they may be a good fit.
Sending a job offer
It's been 4 months now. You are still hesitant to select your candidate, but you are under pressure to fill the position and you are doing everything you can to avoid starting the hiring process all over again. So you send an offer letter. Your candidate accepts, and everyone breathes a quick sigh of relief. Until...
Your candidate starts their new position
At this point, you have already spent 4 months and more than $4,000 on your new employee. Now you need to train and induct him. However, no one knows how you will train the new employee because the person who left their job before was the only one who knew how to do the job. And you are not alone - only 12% of employees think their company does a good job of onboarding.
This poor onboarding leads to a bumpy start. By Day 5, your new candidate is clearly unhappy and overwhelmed. You have a nagging suspicion that he may not be a good fit for the company after all.
Unfortunately, the fresh start of the hiring process is so intimidating that you have to constantly justify your hiring. You fail to dismiss the candidate because you fear your hiring team will look like failures. This leaves your new candidate in a position for which he or she is not suited. And that, in turn, drags down the performance of the entire team.
Your fears come true when a member of your new hire's team quits in frustration. What used to be a 'great place to work' becomes a toxic environment. And unfortunately, you now have to hire a new employee.
You have probably spent up to 30% of the new hire's first year's income on a bad hiring decision.
Does this endless cycle of hiring purgatory sound familiar?
Unfortunately, this scenario is all too real for the vast majority of companies today. As we saw above, almost half of new hires follow this destructive pattern, costing companies and job seekers countless hours of lost time and a lot of money.
When you break down this process, it quickly becomes clear that it is flawed. Yet many companies simply do not know how to solve the problem.
That's about to change. A new generation of workers requires a new way of hiring.