Spending on Hires Too Top Heavy, Firm Says

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By Martin Berman-Gorvine

Sept. 1 — Recruitment spending is too heavily weighted toward the top of company hierarchies, Michael Rochelle, chief strategy officer of the Brandon Hall Group, said in a Sept. 1 webinar.

According to an international hiring practices survey the Delray Beach, Fla.-based consulting firm conducted over the summer, which included responses from 244 companies in 22 industries in various countries, average costs per hire were:

• $3,798.65 for executives;

• $1,501.79 for mid-level managers;

• $1,249.07 for emerging leaders or high potentials;

• $1,062.72 for “individual contributors”; and

• $740.63 for entry-level positions.


Rochelle questioned the overall wisdom of the fact that only one-fifth as much is spent in recruiting an entry-level hire as in recruiting an executive, saying the figures should be more balanced, and that many organizations are failing to take into account the “opportunity cost of a bad hire.”

Time to hire likewise rises the further up the corporate ladder one goes, with “individual contributor” positions taking an average of 36 days to fill, managers taking 52 days and executives taking 58 days.

According to Ben Eubanks, a human capital management analyst with Brandon Hall, the most popular recruitment metric among the survey respondents was quality of hire.

But Rochelle noted that while organizations tend to assess the quality of new hires by measuring their productivity or performance, many make the mistake of assessing that at one particular time, which may produce “skewed” results. Instead, he suggested, organizations should measure performance or productivity over several months.

Dysfunctional Relations, Bad Hires

The second, third and fourth most popular recruitment metrics among survey respondents, Eubanks said, were new hire retention (cited by 68 percent); time to fill (64 percent); and hiring manager satisfaction (64 percent).

But the relationship between hiring managers and recruiters is not all it could be, the survey results showed. Only 35 percent of respondents said this relationship was a partnership. “It should be 100 percent,” Rochelle said. “The hiring manager should feel they have a true business partner in the recruiter.”

Instead, for another 35 percent, the hiring managers view recruiters as having only an advisory role; 23 percent of hiring managers have only a “transactional” relationship with recruiters, which Rochelle characterized as “I put a coin in the vending machine” to get a new hire, and which is “not good”; and in 7 percent of cases, the relationship is a disconnect.

Perhaps these figures help explain why half the companies in the survey “blame hiring managers for bad hires,” as Eubanks said. Half of poor fit candidates are identified only after starting employment, the survey found. “One thing you have to focus on, are you looking at more than just meeting the role of the position?” Rochelle said.

Other factors include whether new hires are aligned with the organization's values, and whether the environment is conducive to bringing out the best in them. “Many people on paper can be perfect, a bullseye, in terms of performing the job, but still go on to be poor fit candidates,” he observed.

Another disconnect is suggested by the fact that the survey found that “six in 10 companies say strengthening employer brand is the most important change to improve recruiting performance,” but half of the respondents admitted they don't even try to assess what their employer brand is like to potential new hires.

Moreover, only 5 percent are assessing and trying to improve job candidate experience. Eubanks noted that this metric doesn't easily tie into a budget line-item, and Rochelle conjectured that, “I don’t think organizations know what to do with the information, there are so many individual experiences of what might happen to a candidate.”

Retaining New Hires

Tips for retaining new hires, according to Eubanks and Rochelle, include:

• “Engage new hires often throughout the first year.” Said Eubanks, “Don’t just set them down and say good luck.”

• “Extend the onboarding process beyond one week.”

• “Provide team building and ‘buddy system' opportunities.” According to Eubanks, “The more connected people are, the more likely they are to stay on long term.”

• “Leverage onboarding technology, including new hire portals.”

• “Provide coaching and mentoring to new hires.”


The webinar was sponsored by Jobvite in San Mateo, Calif.

To contact the reporter on this story: Martin Berman-Gorvine in Washington at mbermangorvine@bna.com

To contact the editor responsible for this story: Simon Nadel at snadel@bna.com