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Why cutting corners on recruitment is simply not a risk worth taking

27/11/2016

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​Employees are a company's greatest asset - they're your competitive advantage. You want to attract and retain the best; provide them with encouragement, stimulus, and make them feel that they are an integral part of the company's mission’.  Anne M. Mulcahy, former CEO, Xerox 

For any organisation, recruiting the right people will be the difference between long term success and failure. As an SME owner, this is even more true. Whilst larger businesses may be able to recover from some recruitment mistakes, for SMEs with fewer resources and options, they can be fatal.

 ‘When you’re in a start up, the first 10 people will determine whether the company succeeds or not.’  Steve Jobs, Apple.

As false economies go, cutting corners on recruitment is top of the list. And here’s why.​
1.        Cost. Of course, as an SME, finding the budget for recruitment is not always easy. So if  there’s a cheaper solution; a way to use internal resources; an option that avoids costly processes like assessment or using external professionals, then this will be sufficient, right?!

Unfortunately, the evidence does not support this theory. The CIPD estimates that the average cost of recruiting the wrong person is £8,200, rising to £12,000 for senior managers and directors. This is because the cost of recruiting incorporates the cost of finding the person in the first place through advertising or headhunting, the administration of HR and payroll, and the cost in terms of time spent selecting and interviewing. And if the new recruit only lasts a short time, you’ll have to repeat this process and financial outlay all over again.

You also need to take into account the negative impact on business sales/revenues that may arise from the bad hire and potential further downtime in productivity from disgruntled team members. Throw in the occasional grievance or disciplinary procedure, and before you know it, the cost of a poor recruitment process has dwarfed the investment you could have made in a robust process in the first place.


2.       Time. Another key driver for cutting corners in recruitment. If someone has handed in their notice, you’ve won a big contract, or made the decision to expand, naturally, these things don’t generally come with a lovely year’s notice. SMEs will not have large recruitment departments just sitting there waiting for this time to arrive. So the chances are, someone in the business will suddenly find recruitment and selection added into their already burgeoning workload. Enter huge scope for recruitment errors.
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Faced with time pressure, in small businesses, decisions are often made with limited information on the candidate. You may not be bestowed from your first recruitment campaign with swathes of top quality candidates from which to choose. You and your team may not have the time to conduct thorough interviews.
 
But actually, as hard as it is, this stage is deserving of the time. Recruiting the wrong person will simply result in time consuming management down the line. Additional training and support; performance management; the need to consult with HR specialists if things go really wrong; time in managing the feelings of unhappy colleagues who may have been carrying the poor performer, and the time to re-recruit; these things could all have been avoided with the investment in time at the beginning of the process.
 
And it’s not just about time in terms of reactive recruitment. It’s about investing time periodically to consider succession planning and workforce planning. To look at hiring junior staff such as apprentices who can grow with the organisation. Being proactive and thorough in your recruitment decisions and process will deliver higher productivity and commercial success.

3. Your brand. To survive in this competitive world, SMEs need to focus on delivering a quality product and service to their clients and are usually prepared to pull out all the stops to ensure they do so. The people in your team need to have this mindset too as it will underpin their productivity at work and how they speak about your business outside of it. 
Your staff could, and should, be your biggest ambassadors. They could, and should, be selling and enforcing your brand and business values at every turn.
 
So recruiting the right people for your business goes beyond simple execution of a role. It has implications for morale and perception, with the flipside being that recruits being the ‘wrong fit’ could damage your brand, particularly if a company becomes known for having a high staff turnover.
 
Our next blog will focus on how to define the role and the person you want to recruit. In the meantime, if you’d like to find out more about how to avoid cutting those corners, we’d love to hear from you.
 
The Recruitment Team helps SMEs to grow their teams by giving them the tools and skills to recruit the right people. If you would like a review of your Recruitment Process and Skills, please do get in touch. Call us on 07971 511731 or email aliwaters@therecruitmentteam.co and we’ll chat about how we can help you.
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ALI WATERS ASSOCIATES
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 ALI WATERS ASSOCIATES 2016
is the trading name of Ali Waters Ltd. Company No. 09480892,
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