Three out of four new hires for your typical small or lower middle market company don’t work out. Then six months to a year they’re gone. You’ve spent all that time hiring them, training them and
then they don’t stay either because they’re not a fit or you don’t like their performance.
What do we do about this? Well, first What’s the problem? Well the problem is that it’s so easy for people to make mistakes in their decision making cognitive biases. If you go look on Wikipedia, you’re going to find a list of like over 100 different cognitive biases grouped into 20 sub categories. So easy to make these mistakes.
How do we combat those biases?
We use process, we use a structured process, we can take our success rate and hiring from about 25% to over 75%. That’s a huge difference. Effectively, you’ve cut your cost of hiring, went down to a third of what it was before. Big impact. It’s worth the effort.
What’s this process look like? Well right now most companies you know look through resumes, you interview the people, take your best guess and you hire him. What if we spent some time on the resume? Then we did some assessments both first depending on position for skills and for personality.
Then we do some interviews, structured interviews. There is a particular way to do that. Then the background check. Background checks are important, even a very simple background check can save you a lot of headache and training expenses and so forth. Then references of the way to wrap that up. But references can give you some insight that you wouldn’t get otherwise and can save you from a bad hire.
So find ways to make your money go further. Hiring better through a process is a great investment to save your money down the road.