Lauder Beaumont Associates

During World War II, Winston Churchill said “He who fails to plan is planning to fail”.  The project management community have adopted this quote as their own which is understandable given the importance of effective planning in their profession.  Whilst we cannot all claim to be professional project managers, we are all managing projects every day in our personal and professional lives.  A project is a temporary activity with a start date, specific goals and conditions, defined responsibilities, and a fixed end date.  It usually involves multiple parties.  

My point is that although we may not label activities as ‘projects’, many of them fit the definition but because they are not necessarily referred to as ‘projects’ the basics disciplines are often ignored, including planning.

Typically, when I go to see a new client, I’m ushered into an office, given a cup of coffee and after the initial pleasantries, my new client tells me about the position they are looking to fill and the type of individual they are looking for.  I don’t expect my client to show me a project plan but I’m keen to understand what level of planning has been done.  Usually, I find the planning is incomplete or has been missed all together.

Most organisations I work with insist on tight project controls for all projects that run, even those with small budgets of £10k or less.  When you consider the costs involved in making a hire, £10k can pale into insignificance when you add up the direct and indirect hiring costs, remuneration costs and most importantly the cost to the business if a bad hiring decision is made.    

As the supplier of services, a plan is very important to me because I want to set realistic expectations with my client, particularly with regards to timescales.  But a hiring plan is even more important for the hiring company.  The only reason to hire anyone is for improved business results.  If the new prospective employee does not contribute to improved business results then I would question the reason to make the hire. This sounds obvious but you would be amazed how often this is not properly thought through.  I realise that the business results are not always easy to quantify but they are vitally important, otherwise it becomes pretty difficult to build a business case for a hire.  Projects don’t usually get off the ground unless there is a compelling business case and as we’ve already discussed, this is a project. 

At Lauder Beaumont Associates, we produce a Hiring Initiation Document for all of our search assignments. This prompts for the key planning information critical to the success of any hiring project.  It includes details of the improved business results sought, remuneration details, a business case, details of the sourcing and interview approach, details of who will be involved in the hiring process, sign-off and authorisations, plus a plan containing tasks and timescales.    

Perhaps this sounds arduous and even a little over the top but the results are well worth it.  The risk of not planning effectively is failure and that can be very damaging and expensive.  A little effort planning now will pay dividends down the line.

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The hiring of a new employee is not only time-consuming, but can prove to be extremely costly should the wrong individual be selected. For many businesses, a systematic approach to the process of hiring usually ends with the creation of a job description or set of job duties. From there, the process can, and often does, go in any number of directions depending on the nature and level of the job, internal hiring practices and the preferences of those assigned responsibility to make it happen.

The lack of a systematic approach to hiring leaves hiring managers and job applicants completely dissatisfied with the hiring process.  Not surprisingly, a huge percentage of hires don’t work out.

If you need any further convincing that there has to be a better way, just take a look at these statistics:-  

• 70% dissatisfied — 70% of the external customers (applicants) and 28% of the internal customers (hiring managers) indicate they are dissatisfied with the hiring process (Source: Staffing.org).
• 50% customer regret — 50% of the processes users (both managers and new hires) later regret their “buying” decision (Source: The Recruiting Roundtable). In addition, 25% of new hires later regret taking their new job within one year (Source: Challenger, Gray)
• 46% turnover — 46% of new hires leave their jobs within the first year (Source: eBullpen, LLC) and 50% of current employees are actively seeking or are planning to seek a new job (Source: Deloitte).
• 46% failure rate — 46% of new hires must be classified as failures within their first 18 months (fired, pressured to quit, required disciplinary action, etc.) (Source: Leadership IQ). In addition, 58% of the highest-priority hires, new executives hired from the outside, fail in their new position within 18 months (Source: Michael Watkins).
• Only a 19% success rate — only one out of five of the process output can be classified as unequivocal successes (Source: Leadership IQ).

Some additional data points to consider include:

• 66% regret hiring decisions — Nearly two-thirds of hiring managers come to regret their interview-based hiring decisions (Source: DDI)
• 50% new executive turnover — nearly half of new executive hires quit or are fired within the first 18 months at a new employer (Source: Corporate Leadership Council).
• Newly promoted executives don’t do much better (40% of newly promoted managers and executives fail within 18 months of starting a new job (Source: Manchester, Inc).
• Less than 50% are qualified — a majority of managers surveyed (59%) believe that less than half of all candidates they interviewed were qualified (Source: eBullpen, LLC).
• 65% lie on resumes — the key data source that we rely on to source and narrow down applicants contains untrue information more than half the time (Source: The Risk Advisory Group )
• Resume-sorting failures — Of all the “perfect resumes” sent out by mystery shopper candidates, only 12% were actually scheduled for interviews (Source: Hodes’ Healthcare).
• Bottom performers produce less — hiring and retaining below or even average performers have real opportunity costs because top performers can increase productivity, revenue, and profit by between 40% and 67% over average performers (Source: McKinsey & Co.).

Can you think of any other business function where such a high failure rate would be tolerated?

If this was production, supply chain, finance or customer satisfaction, the six-sigma consultants and process re-engineering team would be all over them!  But for hiring, the inconsistent and clearly ineffective approach is allowed to continue.

The lack of a systematic approach is the single biggest reason for hiring failure and the reason why we developed the LBA Hiring Management System™. 

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