Hiring is the one thing that sets the stage for everything else that's good or bad in an organization. Great hiring leads to productivity, engagement, innovation, and retention. Poor hiring does the opposite. The transformative power of hiring goes beyond merely filling positions. The quality of hires shapes the viability and future performance of your business.
It’s time we elevate the importance of hiring by giving it the focus it deserves, a concept we explore in-depth in our new guide to building your ideal hiring process. Improving our hiring is more urgent than ever in today's complex, competitive job market.
The One Thing
Hiring is the one thing that sets the stage for everything else in your business. It's the foundation, the predecessor, to all other good things … and bad things that happen in your organization. Hiring determines how innovative your company and products will be. It determines how fast those products can be brought to market. It determines the strength of customer service. Hiring is the first cause of every effect in your organization.
When hiring goes right, we improve our sales, customer service, marketing, finance, operations, and innovation. When we get hiring right, we improve our company’s reputation and we attract better talent.
So Why is Hiring Still Overlooked?
Despite its importance, hiring often gets deprioritized and de-emphasized. Typical job interviews, for example, have been deemed to be about as effective in making a hiring decision as the flip of a coin, and turnover is alarmingly high at many organizations. Alarms would sound if customers turned over as often as employees do, but sky-high turnover is often brushed off as “the way it’s always been.”
At Journeyfront, we work with a customer in a high-volume warehouse. They spend about $800,000 a year on hiring. The customer estimates that turnover costs the company about $40 million annually.
Their $800,000 in hiring costs are a drop in the bucket when compared to their massive turnover and productivity issues. Yet so many companies turn cartwheels to achieve minor reductions in hiring costs while never making needed improvements to their hiring process that can produce results on the order of millions of dollars.
John Sullivan, San Francisco State University professor, notes that:
“Large corporations have thousands of business processes, but I doubt that you’ve ever heard of a single process that has a 50 percent failure rate. Your firm’s executives will be shocked to learn that the recruiting process, the HR process with the highest business impact, often has a failure rate of 50 percent.
And that astonishing failure rate occurs at every job level, from hourly employees, to managers, and even at the executive level. You don’t have to be a CFO to calculate the tremendous dollar costs, negative business impacts, and the lost productivity that results from each and every hiring failure. Assume for a minute that you are a corporate executive and then consider what your response would be when you were presented with the following revealing table.
If you understand Six Sigma, you know that in layman’s terms it means that a little higher than three errors occur per million tries. The failure rate in these five job level areas ranges from a low of 40 percent and a high of 82 percent, or an average of 500,000 errors per million hires.”
Investing in better hiring practices is critical to an organization's success. The costs of poor hiring—turnover, lost productivity, and missed opportunities—are too high to ignore. By treating hiring as a strategic priority, companies can unlock significant improvements in innovation, employee retention, and overall business performance.
Explore our guide on building the ideal hiring process to learn how to elevate your hiring strategy and drive long-term success.
