The True Cost of Bad Hires
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1 The True Cost of Bad Hires Kristen Wylie, SHRM-CP Product Marketing Director Workforce Ready Kronos Incorporated Daria Friedman Principal Analyst Talent Acquisition Brandon Hall Group Sponsored by: Kronos Incorporated
2 HCM Research and Advisory Firm FOUNDED IN 1993 Sample of Our Clients Community of 300, ,000 Global Clients Leading Independent HCM Research & Analyst Firm Publishing 2+ Pieces of Research Each Day Brandon Hall Group
3 How We Help You Learning & Development Talent Management Leadership Development Talent Acquisition MEMBERSHIP STRATEGIC CONSULTING EXCELLENCE AWARDS PROFESSIONAL DEVELOPMENT Workforce Management Brandon Hall Group
4 Open Surveys Extended Enterprise Learning 2017 HCM Technology 2017 Visit click Open Surveys If you would like to join a panel of survey takers, please contact us at success@brandonhall.com Brandon Hall Group
5 Agenda The True Cost of a Bad Hire Three Tools that Help Prevent Bad Hires Leveraging a Unified HCM Platform Key Takeaways Q & A Brandon Hall Group
6 POLL 1: Approximately what percent of past year hires are considered bad? 1. None 2. 1% to 5% 3. 6% to 10% 4. 11% to 15% 5. 16% + Brandon Hall Group
7 An Average 9% are Bad Hires 45% 40% Percent of Past Year Hires Considered Bad 41% 35% 30% 25% 20% 15% 22% 21% 10% 5% 0% 4% None 1 to 5% 6% to 10% 11% to 15% 16% + 12% Source: Brandon Hall Group 2015 State of Talent Acquisition Brandon Hall Group
8 The True Cost of a Bad Hire Brandon Hall Group
9 A bad hire negatively impacts organizational productivity, retention, and culture. Brandon Hall Group
10 Recognizing a Bad Hire? Bad hires are often easy to identify within the first 1-3 weeks: Didn't produce the proper quality of work Had a negative attitude Didn't work well with other employees Had skills that didn't match what they claimed to be able to do when they were hired Had immediate attendance problems Received complaints from customers
11 Determining Quality of Hire 70% 68% 66% 64% 62% 63% 63% 60% 58% 56% 54% 57% 56% 52% 50% Organizational fit Hiring manager satisfaction Time-to-productivity New hire retention Source: Brandon Hall Group 2015 State of Talent Acquisition Brandon Hall Group
12 Impact of a Bad Hire First year attrition increases cost-per-hire, wastes resources, and causes missed opportunities Not being aligned with culture negatively impacts employee morale, engagement Poor performance cause team s performance to suffer, decrease in quality product/service Low productivity delays organizational goals Brandon Hall Group
13 Calculating Cost-Per-Hire Cost-per-hire is the mean average of total costs divided by number of hires during a specified time period. External costs: agencies, advertising, job fairs, background checks, sourcing costs, travel, etc. Internal costs: compensation and benefits of recruiting and sourcing staff, fixed costs, cost of time for recruiting, learning and development CPH = Total External Costs +[Total Internal Costs] Total Number of Hires in a Time Period Brandon Hall Group Source: SHRM
14 The Average Cost of a New Hire $4, Days Average Cost-Per-Hire Average Time-to-Fill Source: SHRM August 3, 2016 Press Release, Brandon Hall Group
15 Tracking the Cost Is financial impact the biggest burden of a bad hire? Consider the following factors: Degraded staff morale; team stress Drop in productivity Quality of work Lost time for managers and peers Employee departures Missed opportunities Wasted resources used for onboarding and training
16 Stage Able to Identify Bad Hire 52% 31% 6% 4% 4% After new hire is onboard During interview process During onboarding process During pre-screening process During assessment process 1% During offer letter process Source: Brandon Hall Group 2015 State of Talent Acquisition Brandon Hall Group
17 Broken Processes Contributing to Bad Hires Interview process 68% Hiring managers 51% Screening and assesment 48% Candidate experience 26% Sourcing 19% Recruitment team 19% Onboarding 16% Employer branding 14% Recruitment marketing 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: Brandon Hall Group 2015 State of Talent Acquisition Brandon Hall Group
18 Identification of a Bad Hire During Interview Process Listening to past experiences, scenarios 67% Interview assessments 58% Candidate, hiring manager interaction 51% Candidate communication style 45% Job requirements discussion 30% Candidate, employee interaction 13% Candidate tardiness 9% Candidate, executive team interaction 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: Brandon Hall Group 2015 State of Talent Acquisition Brandon Hall Group
19 Three Tools that Help Prevent Bad Hires Brandon Hall Group
20 Candidate Experience Drives Quality Candidate experience is a top focus for organizations for the next twelve months (63% paying moderate or heavy attention). Organizations investing in candidate experience see 70% improvement in quality of hire. Strong consensus that recruitment marketing and employer branding improves: Candidate quality (76%) New hire engagement (76%) New hire retention (63%) Time-to-hire (61%) Source: Brandon Hall Group Surveys 2017 HCM Outlook, 2015 The True Cost of a Bad Hire, 2017 Recruitment Marketing Brandon Hall Group
21 Tool 1: Applicant Self-Service 32% of organizations indicate there is a significant drop-off of candidates during the application process. Only 50% of organizations use mobile functionality for their recruitment marketing. Talent needs an easier application process! Source: Brandon Hall Group 2017 Recruitment Marketing Survey Brandon Hall Group
22 Tools to deliver a better hiring experience For applicants: Design an engaging candidate experience Make it easy for applicants to find the right job Enable applicants to apply quickly For recruiters and HR leaders: Eliminate paper-based talent acquisition processes Online applications are configurable to meet the needs of specific jobs/roles Extend the reach of your job requisitions via job board integration
23 Tool 2: Pre-Screening Gaps exist in the way organizations screen and assess new hires: Background checking (78% important vs. 67% effective) Assessments (72% important vs. 49% effective) It is important to narrow these gaps and prescreen candidates during application process to reduce the chance of bad hires. Source: Brandon Hall Group 2017 State of Talent Acquisition Survey Brandon Hall Group
24 Tools to improve applicant screening Pre-screening questions Narrow the pool of available candidates Basic Yes/No questions to pre-qualify candidates Set applicant expectations Integrated background screening Criminal background Employment/education confirmation License/credit check Capture applicant information within a single applicant record
25 Tool 3: Onboarding High-Performance Onboarding Framework Brandon Hall Group
26 Process and Technology Priorities 60% Top Talent Acquisition Priorities for % 52% 51% 50% 40% 30% 45% 39% 36% 20% 10% 0% Optimizing onboarding process Creating full candidate experience Enhancing recruiting Onboarding tools Social tools Predictive analytics Source: Brandon Hall Group 2016 Talent Acquisition Technology Survey Brandon Hall Group
27 Level of Attention for Onboarding 71% of high-performing organizations are paying moderate to heavy attention to onboarding over the next 12 months. Source: Brandon Hall Group 2017 HCM Outlook Survey Brandon Hall Group
28 Onboarding Satisfaction Level Very satisfied 7% Satisfied 22% Somewhat satisfied 53% Not at all satisfied 18% 0% 10% 20% 30% 40% 50% 60% Source: Brandon Hall Group 2016 Onboarding Survey Brandon Hall Group
29 What needs to be improved? Top Six Areas for Improvement New hire experience 62% Collaboration 56% Time-to-productivity 53% Assimilation 45% Automation 45% Personalization 43% 0% 10% 20% 30% 40% 50% 60% 70% Source: Brandon Hall Group 2016 Onboarding Survey Brandon Hall Group
30 But for technology 25% Have a dedicated onboarding technology solution. Source: Brandon Hall Group 2016 Onboarding Survey Brandon Hall Group
31 Why Onboarding Technology? Top Drivers for Automating Onboarding To improve new hire experience 76% To improve management of process 68% To alleviate manual tasks 56% To enable better reporting/analytics 44% To support a dispersed or global workforce 44% To improve time-to-productivity 38% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: Brandon Hall Group 2016 Onboarding Survey Brandon Hall Group
32 Onboarding Technology Impact 60% Organizations Seeing an Increase in Key Performance Indicators 50% 40% 30% 54% 50% 36% 52% 30% 40% 44% 52% 29% 20% 10% 0% Customer Retention Customer Satisfaction Employee Engagement Dedicated Onboarding Technology Solution No Dedicated Onboarding Technology Solution Source: Brandon Hall Group 2016 Onboarding Survey Brandon Hall Group
33 Most Important Onboarding Metrics New hire retention 68% 79% New hire engagement 57% 65% Time-to-productivity 53% 64% High-Performing* Others Direct manager/supervisor feedback 50% 55% New hire surveys 47% 52% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: Brandon Hall Group 2016 Onboarding Survey *High-performing organizations have seen improvement over the past year in most of their key performance metrics. Brandon Hall Group
34 Role-specific onboarding checklists powered by configurable workflows Track the entire onboarding process from start to finish Custom forms and employee selfservice reduce administrative paperwork ONBOARDING Consistent, engaging employee experience + drive to productivity
35 Reduce the risk of making bad hires More informed hiring decisions How might an HR Manager expand their workforce in a way that takes into account current and past employee performance? Leverage information across a unified HCM platform to make strategic decisions
36 Key Takeaways Almost all organizations make bad hires, and the cost of each bad hire is above and beyond the financial cost. Bad hires negatively impact productivity, retention, engagement, and performance. Improving candidate experience, pre-screening, application process, and onboarding through technology leads to engaged, quality hires. Brandon Hall Group
37
38 Questions? Kristen Wylie: Daria Friedman:
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