Greg Smith is the President of Chart Your Course International. We accelerate human and organizational performance. We help businesses become more profitable and transform themselves into exceptional places to work that attract, retain and motivate people to their full potential and achieve meaningful lives.
Hiring the Wrong Employee is the Mistake That Keeps On Giving
By admin on Apr 8, 2012 in Employee Turnover, Human resources, Recruitment, workforce trends
Hiring the wrong employee is an expensive mistake.
For example, let’s say a professional services firm recruits and hires a new customer service representative (CSR). After 2 months, the manager realizes he made a bad decision. The employee is terminated.
This is the example used in a recent report by McLean & Company. They placed the cost of hiring the wrong employee at about $12,000. Here’s how they derived the estimate. The analysis McLean & Company used is not very different from the multitude of other articles and forms available with a simple Google search. But it’s a good reminder about the high cost of hiring poor performers, especially since hiring trends are up and many hiring managers are unprepared.
Monthly salary x # of months employed (2 months @ $3,350)
Estimated benefits (35% salary)
Other Significant Costs
Training and orientation (trainer, manager & and other employees’ time spent)
Set-up costs (computer, phone, etc.)
Litigation costs (if applicable)
Total Cost of a Bad Hire
+ Salary & Benefits
+ Other costs
You should notice that these costs might just be the tip of the iceberg and rise when candidate travel costs, relocation costs, signing bonuses, litigation costs, and benefits are incurred.
Hiring the wrong employee is also the mistake that keeps on giving.
After this CSR (or any other employee) is let go, the organization has to start recruiting all over again. The cost to replace this employee just keeps mounting even after he or she is gone. In addition to the recruiting costs ($3,000), there are a number of soft and opportunity costs that add up.
Manager’s time spent dealing with HR about the under-performing employee, discussions with the employee, and documenting his or her performance.
HR’s time spend coaching and advising the manager about performance management and legal implications of termination.
Lost productivity due to missed deadlines, unfinished projects, and missed sales.
Disjointed customer service. Customer fulfillment, engagement, and service is disrupted or less than desirable when management and HR’s energy is redirected toward poor performing employees instead of top performers and customers.
Damage to reputation. The terminated employee will almost certainly spin a different story than the one told by the employer. And word of mouth travels fast, especially if the employee is active on social network sites.
Businesses and business leaders must be one step ahead of change. Whether you run a small business or a large corporation, you need to be an agent of change.
Unfortunately, many organizations suffer from a lack of leadership. Leadership is both an art and a science. A leader gets others to achieve goals by providing purpose, direction and motivation. The ultimate goal is to lead others to a destination they would not go by themselves.
Rapid changes in technology, an uncertain economy, intense competition, strict regulatory requirements and an increasingly diverse workforce are challenges forcing organizations to adapt quickly to new circumstances. A manager tends to maintain the status quo; whereas, a leader creates and manages change. Unfortunately, many people who were successful in the past do not possess the skills and competencies needed for success today.
These varied factors require strong leadership skills—the ability to lead, not just manage. Famed management consultant and late author Peter Drucker put it bluntly by saying, “Every organization has to prepare for the abandonment of everything it does.” Only through innovation will a company survive in today’s rapidly changing environment. Change in the business world was at one time orderly and incremental. In a routine or a traditional environment, managers do well; however, change is much more dramatic today. Today’s business world demands a leader willing to facilitate change and encourage innovation within his or her company in order to be successful.
How Leaders Make Change Happen
Retired General William Livsey said, “You can assign a person to a leadership position, but no one will ever really be a leader until his appointment is ratified in the hearts and minds of his soldiers.” Leadership is earned. It is not based on titles, position or rank. The business that neglects its people and treats them solely as expendable resources stands to incur the greatest loss.
Your behavior, actions and personal involvement are critical in leading others to change and become more adaptive and innovative. This role cannot be delegated to someone else. Here are some specific actions to consider:
• Read leadership books. Talk about your interest, new awareness and commitment to new ideas to conduct your business.
• Ensure that you make yourself visible in all training courses/programs supporting this new direction. Consider becoming an instructor or teaching a class to the people in your company.
• Encourage the management team to do the same — become role models.
• Avoid sending mixed signals. Evaluate your actions and priorities to insure those actions support the new vision.
• Eliminate barriers and bureaucratic procedures that block the way of progress.
• Get personally involved with improvement projects, teams and task forces.
• Spend time with customers and suppliers, as well as with employees and staff discussing these issues. Make these sessions informal, open and friendly.
• Keep an open mind to new ideas and better ways to do business. Be willing to take a few risks just to get more people engaged and involved.
WHO IS SPEAKING AT YOUR NEXT MEETING?
Keep us in mind if you need a speaker, trainer or facilitator for an upcoming meeting or conference. In addition to Greg, we have several highly capable individuals to provide a wide range of services. Visit our website for a list of Greg’s dynamic keynotes and workshops. Contact Cathy for additional information.
Have you ever made a wrong hiring or promotion decision? Do you have people who have difficulty communicating with others? This webseminar explains how to integrate DISC and other online assessment tools into training, selection, communication and professional development applications. People are unique and have different temperaments and personalities. These differences have a direct impact on how we behave with each other, communicate and perform. Interviewing and resumes are becoming less reliable. Assessments provide you an unemotional evaluation of an individual’s behavior, attitudes, values and talent – qualities difficult to judge in an interview alone.
• Learn how to avoid a bad hiring decision which can cost 2-3 times the person’s annual salary.
• Learn the skills, processes and the knowledge you need to identify and hire top performers each and every time — those that will perform in the top 20%.
• Give feedback to people in a style they can understand and accept for improving performance and accelerating professional development.
• Reduce stress, conflict and improve communication between individuals and departments.
• Learn how to identify the emotional intelligence, strengths and abilities of individuals and know which jobs people are best suited.
• Predict an applicant’s success on the job before hiring or promoting them.
• Effectively measure and improve an individual’s leadership competencies.
Employers face the complex tasks on finding ways to improve job engagement, work performance and job satisfaction. A global economy of discriminating employees has placed demands on employers never before seen. Employers face the challenges of maintaining productivity, job performance as well as keeping their workforce engaged and satisfied with their jobs.
Environmental pressures, increased regulations, rising costs, and the needs of the workforce have placed management in a complicated and tenuous situation. The answer lies with creating a work environment that maintains employee job satisfaction as well as motivates people toward exceptional performance.
A survey conducted by the Conference Board showed only 45 percent of Americans are engaged with their jobs. This is the lowest job engagement level ever recorded by the Conference Board in more than 22 years of research.
Those that fail to improve job satisfaction are at risk of losing their top talented people to the competition. Supervisors and managers who maximize the potential, creative abilities, and talents of the entire workforce have a greater competitive advantage than those who don’t. Employees that are engaged in their work have a higher level of job satisfaction and motivation. Engaged and motivated workers provide the health insurance businesses desperately needed in these chaotic times.
Here are a few job engagement techniques that can boost job performance.
Team Assist Boards: Best Buy Company, Inc. has boards, which are located in multiple areas within a department. Peers or managers recognize the excellence of others by writing a quick message of thanks, and then post it on the board.
Tool for New Employees: Northeastern University has many divisions, each containing several departments. The division decided to develop a tool to assist the new employees. It is an orientation/training manual, and the entire company helps direct them where to go, who to speak to, and what they need to begin working on.
Staff Excellence Award: Northeastern University has developed a staff excellence awards. These are done monthly and the winners are nominated by those in their department. They receive a gift certificate and plaque.
Perfect Attendance Recognition: Graybar has weekly or monthly drawings for perfect attendance. This is for those who have had no tardiness, etc. for the previous weeks. They give one gift certificate per week.
On the Spot Award: NexCom uses the “On the Spot Award.” Any supervisor who finds an employee doing the right thing gives it. They give that employee a gift certificate, minimum $25, maximum $100.
Breakfast Burrito Reward: Sandia National Labs has the Breakfast Burrito reward. When a team or individual meets a certain performance goal, they get a Breakfast Burrito party. Status towards achievement is tracked on a poster… red chilies indicate falling behind schedule, and green chilies show if they are on time, or ahead of schedule. This is very inexpensive, but well received. Employees love to eat!
Feed the Teams: Smith and Nephew encourage their various departments to select a weekend to feed the mfg. teams that have to work. They arrive at 8:00 p.m. Friday night for the second shift, 2:00 a.m. for the third shift, and at noon on Saturday for the first shift. The teams have been very appreciative.
Executive Lunch: Tenet HealthSystem selects an employee from each department via e-mail to join Executives (VPs) for lunch. Approximately 10 executives and 15 employees have lunch in a conference room on the Executive floor on a monthly basis. There is no set agenda. Coworkers get a chance to interact with one another, and interact with executives on an informal basis. This program has done a lot for job engagement.
When your customer service team loses their drive, it’s detrimental to productivity, profits and personnel. Learn how to create an excellent customer service strategy and motivate your service team to provide superior service, inspiring customers to return and spread the word. Join us for this 60-minute webinar where you and your colleagues will discover:
Strategies to Boost Morale and Work Ethic Among the Front-Line Reps
Tips and Tricks to Increase Profitability Through Stellar Customer Service
How to Promote Customer Brand Loyalty: Keep Them Coming Back for More
Ways to Identify, Reward & Train Your Customer Service Team: Be the Best Around
This 60-minute webinar will provide you with essential skills to create a high level of service quality at every level of your organization, to promote customer loyalty.
Turn One-Time Customers into Life-Long Buyers: Keys to Distinguish Your Service.
How to establish & implement customer-focused policies to boost brand loyalty
Ways to create an improved, lasting relationship with your customers
Increase exposure: WOW them with service and the word will spread
Give Your Organization a New Face: Happy Staff are Ambitious Staff
How to keep your best reps satisfied with recognition & advancement
Promote employee confidence to build an indispensable & tenacious team
Strategies to train cheerful & upbeat staff members: Attitude is contagious
Increase Productivity & Empower Your Reps to Go Above & Beyond
Methods to motivate reps to strive to do better than the ‘norm’
Recognize negative customers: Don’t let them ruin your day
Facilitate an incentive program: How to determine who & when to reward
Live question and answer session – Have your specific customer self-service questions answered!
Your Expert Presenter:
Gregory P. Smith is recognized as a leading authority on talent management, organizational transformation and customer service, Smith teaches businesses how to create exceptional workplaces that attract, retain and motivate talented people. As an international speaker and author, Smith has addressed organizations in over 25 countries. He has spoken to hundreds of associations, human resource associations, healthcare organizations and businesses on numerous workplace related topics.
As the founder and Lead Navigator of Chart Your Course International Inc., Smith helps executives and business owners accelerate individual and organizational performance and navigate through increasing rates of change. He helps design strategies and processes to grow organizations and implements business initiatives creating clearer direction, increased profitability, stronger executive teams, improved communication and happier and more productive employees.
Smith has written and published over 350 articles and 9 books including his latest, Fired Up! Leading Your Organization to Achieve Exceptional Results. He has been featured in hundreds of magazines and trade journals and appeared on numerous television and radio programs, including Bloomberg Business News and PBS television.
Mark Twain once said, “I can live for two months on a good compliment.” Employee recognition is a powerful tool in building morale, motivation and job satisfaction. A pat on the back or a personal note from a peer or a supervisor does wonders. Small, informal celebrations are many times more effective than a once-a-quarter or once-a-year formal event.
Employee appreciation and recognition are critical to achieving organizational goals. All humans need to feel appreciated. In a survey conducted by Robert Half International, results showed employee recognition and appreciation was the number one reason employees stay in their work environment with fair compensation being second.
Here are a few employee recognition ideas to consider. Some of these ideas provide ways to increase employees satisfaction without increasing pay.
Drive My BMW
Graham Weston, co-founder and CEO of Rackspace Managed Hosting, gives the keys to his BMW M3 convertible to his top performing employees for a week. This creative way to reward employees has a bigger impact than cash. He says, “If you gave somebody a $200 bonus, it wouldn’t mean very much. But when someone gets to drive my car for a week, they never forget it.” The important point is pay and money do not necessarily create job satisfaction. There has to be something more.
The Extra Mile
United Services Automobile Association (USAA) provides blank “Thank You” note stationery to their workers for a program called The Extra Mile. Employees are encouraged to say “Thank You” to each other for the help they receive at work. The most surprising thing happened on the first day the notes were printed. They ran out! The company couldn’t keep up with the demand.
President’s Employee Recognition Dinner
Schreiber Foods, Inc. holds an annual President’s Employee Recognition Dinner. Throughout the year employees nominate each other for five award categories: leadership, quality improvement, innovation, community involvement, etc. A team then evaluates the nominations, and the winners are selected. They are announced and recognized at the President’s Dinner. The recipients receive a crystal award and a bonus.
Before embarking on creating an employee recognition program, take the time to first discover what may be causing employees to be un-motivated. Identify and fix the de-motivators first.