CDI Corporation

Stopping Costly Hiring Mistakes in Their Tracks

In today’s highly competitive job market, businesses can’t afford to take a lackluster approach to the recruitment and hiring of their workforce. Not only can a bad hire, whether among permanent or contingent recruits, lead to costly turnover, but it can also negatively impact the organization’s performance and, therefore, its bottom line.

Stopping Costly Hiring Mistakes in Their Tracks
Click to enlarge.

According to the Society of Human Resources Management, the cost of replacing a permanent employee could end up amounting to anywhere between 50 percent and a few hundred percent of the individual’s yearly salary.

Never has it been more important for employers to hone in on a strategy to attract, onboard, develop and retain top talent. However, this is often far easier said than done. Fast Company reported that two of the biggest reasons companies hire bad candidates can be attributed to needing to fill the position quickly, as well as the organization failing to test or research the skills of the candidate well enough.

“One of the key components of the recruitment strategy should be to create a success job profile that includes key characteristics, skill sets, experiences and behaviors,” says Bill Hyman, chief human resources officer for CDI Corporation. “To avoid the time and expense of a bad hire, there are crucial steps companies need to take – starting with identifying who their ideal candidate is.”

Hyman recommends the following tips to clearly define the ideal candidate:

Build a detailed candidate profile
The more specific a business is about what its model candidate for either a full-time position or a contract assignment looks like, the better the chances of being able to identify and attract them. Too often, hiring managers cast a wide net in hopes that the top performers will simply come to them. But there needs to be a better, more specific definition of what that person looks like, the exact skill sets and experience they should have and what will be expected of them.

Not only does this help hiring managers, it also benefits candidates as well. According to Aberdeen Research Group, there is a disconnect between the expectations of employers and candidates, which contributes to higher turnover. Applicants also reported wanting a clearer definition of what the role and responsibilities are.

“Companies have to do a better job of clearly understanding what success looks like in a role, and explaining what candidates should expect – both from the position and company,” notes Hyman. “Candidates should have a clear understanding of what it will be like to work for a company before applying — let alone committing — to a job or to a long-term contract.”

Put competencies into context
As Lou Adler recently explained in a LinkedIn article, without context, hiring decisions are influenced by personal perceptions and biases, which are the leading cause of hiring mistakes. To avoid this, companies must clearly define roles and responsibilities, as well as the required traits and competencies for performing those functions – not just which ones they need, but why and how they will be used on the job. Additionally, how will the success of those competencies be measured?

The article also suggested outlining about five performance objectives explaining the task, an action verb detailing the role, followed by a measurable result.

“By looking beyond the duties of the candidate or contractor, and outlining the ideal applicant’s characteristics up front, employers will be better positioned to hire someone who is the right fit,” says Hyman. “This is essential to creating a performance-based job description that helps employers minimize bias that is based on their own preferences, and instead reduce their risk of making costly hiring mistakes.”

Recent CDI Analysis

“By looking beyond the duties of the candidate or contractor, and outlining the ideal applicant’s characteristics up front, employers will be better positioned to hire someone who is the right fit.”

Bill Hyman
Chief Human Resources Officer
CDI Corporation

Employment Situation (U.S.)

The U.S. added 138,000 jobs in May as the unemployment rate edged down from 4.4 percent in April to settle at 4.3 percent, according to data released by the Bureau of Labor Statistics.

The rate is currently at its lowest level in 16 years, Bloomberg noted. However, the number of jobs gained fell short of economists’ expectations, which predicted the addition of 182,000 jobs.

“Job growth is a little disappointing, but enough to continue tightening the labor market,” said JPMorgan Chase & Co. Chief U.S. Economist Michael Feroli, in an interview with the source. “This doesn’t change the overall story of an economy that generally seems to be growing above trend and reducing slack.”

Since January, the number of unemployed has dropped by nearly 780,000, and the unemployment has fallen 0.5 percentage point.

Both the labor force participation rate and the employment-population ratio decreased slightly in May. Over the year, the number of discouraged workers declined by 183,000.

Total nonfarm payroll employment grew by 138,000 during the month. Average hourly earnings for private nonfarm payroll employees increased by 4 cents to reach $26.22. Average hourly earnings for private-sector production and nonsupervisory employees were $22.00, an increase of 3 cents.

Sector-wise, professional and business services added the most jobs in May, gaining 38,000 positions. Job gains in this segment have averaged 46,000 per month this year.

Mining employment increased by 7,000, bringing total job gains in the industry since its October 2016 low to 47,000.

There was little employment change in construction, wholesale trade, transportation and warehousing, information and construction.

According to Bloomberg, the tightening U.S. labor market is expected to push the Federal Reserve to increase interest rates at their meeting June 13-14.

The full Bureau of Labor Statistics report can be downloaded by
clicking here.

Employment Situation (Canada)

Statistics Canada reported strong job growth for May 2017. This continues the economic trend over the past few months – a good sign for Canada’s overall economy. Overall,  77,000 full-time jobs were added in May. Economists anticipated 11,000 to 15,000 new jobs.

Factories and manufacturing saw some of the largest growth. Factories added 23,300 jobs while manufacturing added 25,300.

Additionally, the service sector added 31,300 jobs in the past month. This sector has exploded in job growth, adding 295,000 jobs over the past 12 months.

There were 59,400 jobs added to the private sector, considered a desirable area for growth.

Science and technical services added 25,900 jobs. These jobs can include computer system design, consulting and accounting services.

Younger people working in Canada saw gains in the job market: 38,200 young Canadians secured full-time work, bringing the unemployment level down by 0.3 per cent.

The unemployment rate rose slightly to 6.6 per cent. However, economists see this as a positive, as it signals that more Canadians are re-entering the job market. The Labour Report showed that 78,400 workers began job hunting last month.

“All told, an extremely strong employment report for Canada, coming on the heels of last week’s strong GDP figures,” said CIBC’s Nick Exarhos to the publication.

Wages increased 1.3 per cent compared to this time last year. Temporary workers also saw an increase in wages – 4.8 per cent – another sign of a tightening labour market. The Financial Post anticipated that this good news could motive the Bank of Canada to raise its rates in the beginning of 2018.

Canadian ES Report:
Labour Force Survey, May 2017

News from CDICorp.com

The U.S. takes a closer look at infrastructure

Good news for aerospace company SpaceX

Oil jobs continue upward climb

Entry-level engineers in Canada can garner high salaries, report finds

Canadian government launches “superclusters” initiative to boost tech innovation