BUSINESS INSIGHTS | SUMMER 2010 EFFECTRecession and the Right Hire
by Tim KarlenIs it over yet? We can safely say the recession affected all of us. We scaled back workforces, cut salaries and hours, and asked more of those who remained. As we asked more from fewer and scrutinized processes for efficiencies, our individual and corporate weaknesses were revealed.
Shaky gets shakier
If your processes were not well-established or if you had business practices which only functioned when a lot of money was flowing, the recession was ruthless. For instance, one real estate development CFO we placed in November 2007 relayed how it took him a year to understand where his new employer’s $57 million was going. The recession exposed some significant operational, procedural, and financial weaknesses of the company. Hiring the right CFO at this critical junction helped save this decades-old company from what could have been a quick and disastrous decline.
Solid foundation fosters growth
For those who were organizationally sound, the recession filled the job market with candidates. Companies able to grow were deluged with applicants. One wind energy construction firm we spoke with in early 2009 received 1,000 resumes for 20 openings. They screened the 1,000 down to a two-inch stack of qualified candidates.
Strong companies offer a safe harbor. As recruiters looking for key employees, we found that the employed were staying put, hunkering down, and not considering career changes. The more solid your business model, the more likely your people will stay and weather the storm with you, and you’ll have your choice of applicants if you need to hire.
However, a recent survey suggests employers may have some challenges ahead as the economy recovers. Research published in early 2010 by the Conference Board found only 45 percent of Americans were satisfied in their current positions. So appreciation for a job may wear thin if a company has asked too much from employees or if the pain of this recession was not spread equitably.
Investing in the process
So how will these factors affect hiring in the next year? Some companies are allocating more time and money to find the right employees. For instance, after two bad hires made on their own in the past year, one of our small corporate farm clients now insists on rigorous $400 personality profiles even for positions making less than $20 per hour. It is an investment they are convinced will help them improve their chances of securing the best person.
Look back and look forward
There are many steps you can take to improve your odds of finding someone who is right for the job and fits your culture. A more introspective approach involves both a look back and a look forward.
One wind energy construction firm we spoke with in
early 2009 received 1,000 resumes for 20 openings.
The look back asks: what were the true costs of the poor hire and what could we have done better? To discover your true costs, you have to look beyond the obvious salary and benefits paid. You must consider print and online advertising costs, time spent at job fairs, reviewing resumes, phone interviewing, in-person interviews, and second interviews. A thorough process also includes an investment in background checks, personality assessments, employee referral incentives, and travel reimbursement for candidates.
In addition to the traditional hiring expenses above, the less tangible (but potentially more detrimental) costs of poor performance can include: missed deadlines and opportunities, lost business, legal fees associated with bad decisions, and the potentially poisonous effect of an unethical or mismatched hire on other employees. This is not intended to make us gun shy about hiring but rather to help us fully recognize the huge investment a new employee represents.
The look forward is more proactive. What skills and qualities are you looking for in your next colleague? In our experience, successful employees share a group of characteristics that tend to predict success. These include:
- The ability to take on responsibility
- A record of success in holding themselves and others accountable
- The ability to multi-task as well as delegate
- An attitude of respect for themselves and others
- A history of accomplishment (as opposed to activity)
- A willingness to be a “hands-on” doer if necessary
Hiring is serious business, and if you can objectively look at your past missteps, your odds of selecting the right candidate increase dramatically. If you find a candidate with some of the characteristics outlined above, the new employee will strengthen your organization, no matter how the economic climate changes.