Mindfield who? You re Hiring the Wrong People Cameron Laker, CEO Mindfield OVERVIEW

Transcription

1 You re Hiring the Wrong People Cameron Laker, CEO Mindfield OVERVIEW How much are bad hires costing you Validating your hiring decisions with data How data is changing HR Next steps 2 Mindfield who? 1

2 Mindfield is a technology-enabled talent solutions provider that partners with companies to improve the quality of their hourly workforce. Creating powerful hourly workforces Cities 50,000 Hires across Canada 2

3 -298% ROI Manager Base Compensation Number of Years in the Job 1.Cost of Hiring 2.Compensation (All Years) 3.Cost of Maintaining Person in Job 4.Severance 5.Mistakes, Failures, Wasted or Missed Business Opportunities 6.Cost of Disruption 7.Sum of Costs (1-6) Value of Contribution Investment (Cost of Hiring + Compensation + Cost of Maintaining) ROI (Value of Contribution Sum of Costs)/Investment x100 $ 62, Years $ 13,000 $ 188,000 $ 44,000 $ 17,000 $ 536,000 $ 47,000 $ 840,000 $ 126,000 $ 240, % Who s on the bus? 3

4 Average cost of a mis-hire 3-5x base compensation Global 100 heads of HR admitted that 75% of hires or promotions into management roles were mistakes. Median tenure of employees between is 2.9 years. 4

5 The US Department of Labour suggests if solely looking at direct costs of replacing an employee (turnover) you should calculate a replacement cost of 150% of an employee s total compensation and 250% if the employee is in a managerial or sales role. If your average employee compensation package is $50,000 the average cost for loss of an employee is $75,000. 1,000 employees Yearly turnover is 7% Annual expenditure = $525,000 Over 5 years = $2,625,000 COST OF MIS-HIRES HIRING COMPENSATION MAINTAINING SEVERANCE Recruitment or search fees Assessments, Interviewing, Background and Reference Checks HR Department time HR Administrative costs Time/expenses of non-hr people Base salary x years Bonuses (signing and performance) Stock options Benefits Clubs Expenses Assistance Office Rental Computer, equipment Training Travel Severance fee Cost in negotiating separation Administrative costs of separation Time associated with separation Bad press or reputation 5

6 VALIDATE every hiring decision you make. LIFECYCLE OF A POTENTIAL HIRE ATTRACT RECRUIT SELECT ONBOARD ENGAGE RETAIN EXIT Collecting data throughout the process Data-driven Hiring Unsuitable candidates never enter the picture. 6

7 This approach focuses on tying business outcomes such as sales performance, tenure and engagement to the selection, hiring and measurement of quality candidates. Finding likeminds creates tremendous efficiencies in productivity and economy, greatly reducing turnover and absenteeism, and virtually eliminates the risk of hiring the wrong employee. HOW DATA IS CHANGING HR Big data is used to describe the exponential growth and availability of data to business organizations. Opportunity for more accurate analyses and more confident decision making to drive efficiencies, reduce costs and risk. How data is changing HR? Better understanding of who you are hiring Differentiating between high and low performers Who is costing the business versus profiting NEXT STEPS What are you struggling with? How do you define a good hire? How do you eliminate mis-hires? 7

8 Start making better hires 8