Recruitment as a business risk
The business landscape today is a minefield of ‘issues’ that exposes them to downturn and potential failure. These ‘issues’ or business risks include;
- Strategic risk – e.g. a new competitor coming into the market or customers having more choice
- Compliance & Regulatory risk – e.g. governments introducing new regulations and/or rules
- Financial risk – e.g. interest rates going up or currency fluctuations
- Operational risk – e.g. machinery breaking down or logistic issues
More and more businesses, large and small, are now dedicating time and effort to reducing their exposure to risk. However, very few businesses (if any) consider recruitment a business risk.
Hiring new employees is risky business or to be more precise, hiring the wrong people in the first place is risky for the business.
Hiring staff is very much a fundamental part of nearly every business and the success of the hire undoubtedly plays a huge part in how successful the business will be.
Consider this. A 2012 research article by Robert Half International found that supervisors spend, on average, 17% of their time (which equates to one day a week) overseeing poorly performing employees.
And 95% of employers say that poor hiring negatively impacts the morale of the team.
Anyone who is in business or has been in business will tell you hiring is a bit of a “hit and miss” exercise – sometimes you get it right and sometimes (more often than not) you get it wrong.
However, hiring does not have to be a shot in the dark.
First thing – recognise hiring is a real business risk
If a business, in the first place, recognises the hiring process as a real risk to the business, then that alone sets them up for a more successful hiring outcome.
Why? Simply because they will be more mindful of how they go about recruiting and more importantly, allocate the right resources to hiring – i.e. time, people, training and structure.
Then there’s the DIY mentality when it comes to recruitment – why bother spending money when you can do it yourself!
The hiring process is littered with challenges and if these challenges are not properly addressed and managed, it will result in a poor hiring outcome.
The risks in the hiring process
There are many risks in the hiring process – some common ones include;
- The sheer amount of information that’s circulating out there – particularly online. How and where do you even begin to look for the ‘right’ person for the business?
- The process of hiring is not a core competency for many managers – after all, they have other roles and responsibilities to fulfill – so in reality, how much time and effort will be given the hiring process? Often, manager’s aim is to get it over and done as quick as possible.
- Poor hiring decisions – many times, the manager is just winging it – asking a set of standard, off the shelf questions hoping to land the right person. In doing so, many key critical points will be missed in the interview and in the end, the decision to hire may simply come down to “we need to fill this role quickly”.
- Not the right fit – this will only be found out when it’s too late – i.e. the new person has been hired and may now have been with the business for up to 6 months before management and the other employees come to the conclusion that this person is not the right fit. When this happens – everyone loses out.
Recruitment needs to be handled professionally – by professionals
As mentioned earlier, recruiting is not a core competency for many managers – so why not involve professionals who have the skills and experience to do it?
And rather it being seen as an additional cost to involve a professional recruiter, the business must think of it as an investment to mitigate the risks involved in the hiring process (as listed above).
The advantages of involving a professional recruiter include;
- Focused attention on the process with feedback all along the process
- Detailed assessment of candidates across a number of areas (technical, personal, interpersonal, creativity, analytical etc)
- Quicker and seamless onboarding – leading to faster integration into the business and being productive
- Longevity of placement – i.e. finding the person who truly is the right fit
- Focusing on the core elements of the business while working with a trusted partner
- Happier employees – higher levels of morale
- Lower staff turnover
If your business maintains a risk register encompassing financial, operational, strategic and compliance elements – then you also need to add recruitment to this register.
While the cost of poor recruitment may not be directly observed, it will have an impact on the bottom line of the business.
Recruitment Australia specialises in areas of Safety, Risk, Environmental and Operations. For your next recruitment need, contact us for no obligation consultation either Phone +61 29634 5912 or email@example.com