Studies have estimated the cost of turnover ranges from several thousand dollars for entry-level positions to upwards of 150 percent to 200 percent of the annual salaries for executives.
Costs are high because they include not only loss of revenue, productivity and training expenses, but also the time, energy, and stress involved with hiring someone new.
When new team members are hired through the usual means, they typically start out strong. If their acumen, behaviors, competencies, motivators, and emotional intelligence don’t match what’s needed to perform the job at a high level, their attitude and engagement typically deteriorate. They’ll likely move on or need replacing. This will put you in the position of going through the lengthy and often frustrating and expensive process of attracting, hiring, and training someone new.
Wise business owners endeavor to reduce the high cost of turnover and maximize their return on investment with new hires.
Still, all businesses experience turnover for a variety of reasons. The expenses associated with finding, hiring, training, and developing new team members are real, indeed.
The average business hires new talent through a process of advertising, accepting applications and resumes, interviewing what are deemed qualified candidates, asking a few routine questions, and then hiring based on who’s liked the most and appears to be the best candidate.
Without an in-depth analysis and real understanding of the position itself — its key accountabilities — and the type of person likely to perform the job at its highest levels, the success ratio falls off quickly, and the high cost of turnover affects the bottom line yet again.
This is where the proven process of Job Benchmarking comes in. Through this sophisticated approach, companies dramatically reduce errors in the hiring process by eliminating biases and producing the needed information and clarity to hire effectively.
In the first phase of the Job Benchmarking process, subject matter experts — three to seven team members who have a direct connection or experience with the position to be filled — define the position and identify its key accountabilities. This is done from the perspective of the job itself: Which activities need to be done on a consistent basis for the job to performed at its highest level?
During the second phase, a facilitator works closely with subject matter experts to rank key accountabilities in order of importance and time requirements. Subject matter experts are then guided through the completion of the job assessment, where they indicate the acumen, behaviors, competencies, and motivators a person needs to perform the job at the highest level.
With the Job Benchmark finalized, the next step is to identify the most qualified candidates and have each one complete a simple online assessment. A report compares each candidate’s assessment results to the identified parameters created in the Job Benchmark. This sophisticated tool provides clear-cut, unbiased information identifying those best suited for the job and the culture of the company.
In the final phase of the process and with solid hiring information in hand, top candidates are interviewed using behavioral-based methods. The key accountabilities of the position are explained. This procedure defines the position and manages the expectations of the new hire.
Once a new team member is hired, I typically engage them for successful on-boarding and further development of their behaviors and competencies for optimal job performance.
The benefits of Job Benchmarking for hiring new talent are numerous.
Studies have shown that when done correctly, retention increases by 30 percent and productivity improves by 50 percent. Retention increases because their personal motivators match the necessary motivators for the position. Productivity rises because their behaviors and competencies align with the requirements of the job. Symmetry between the job and new hire takes job performance and team member satisfaction to new heights.
The rewards of Job Benchmarking to the company, its team members, and customers are inescapable. As biases are removed and clarity and alignment created, the door to more successful hiring appears.
Business owners who want to experience the highest levels of happiness and success must strive to retain top talent and increase the engagement of their teams. If this is you, the accurate and effective process of Job Benchmarking could be just what you need.
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This article was written for and published in collaboration with The Business Times newspaper. Access the article here.