Opportunity cost: the loss of potential gain from other alternatives when one alternative is chosen (Oxford English Dictionary). If you spend 20 minutes browsing your social media feed in the morning before starting work, you may lose out on 20 minutes to read the news or catch up on email.
Likewise, if you spend time interviewing 40 applicants that sought you out, all with varying backgrounds that may or may not be entirely relevant to your company or the position you are hiring for, you lose time and money that could be invested in a thorough search that brings forth only the most relevant candidates. In the long-run, a strategic and targeted search can be much more economical and efficient than simply posting a position on online job boards.
Implementing the hiring process on your own with internal Human Resources (HR) and a few job postings provides lower initial expenses upfront. However, when you’re weeding through the multitude of underqualified applicants or applicants that look okay on paper but have a unpleasant personality or a possess a totally different philosophy than your company, it’s really like paying to give yourself a headache.
Companies doing in-house recruiting for a management position or an executive position may end up spending up to 150% of the position’s salary. According to James Del Monte of JDA Professional Services, Inc., it can cost up to $150,000 to replace an IT position. During that time, companies must also ensure that the candidate’s vision is in line with their new role, team, and company. This sometimes calls for further investment in team building, training, and lower productivity while the new candidate adjusts. If your interview process is less than impeccable, your new hire could be an expensive mistake, and finding someone who fits the bill will mean starting from scratch.
On the other hand, using an executive search firm such as TD Madison & Associates that has developed a search process that combines executive recruitment with organizational behavior can save the headache. Their methodology provides insights into a candidate’s future performance, along with how they will work with the existing team, with 97% predictability. This approach, which includes a combination of proven interview techniques, ensures that a candidate’s qualifications and strengths complement a company’s vision and mission. Comparatively, an investment in the hiring process is much more likely to pay off when the company knows exactly whom they’re hiring and what their role in the business will look like. So when you really think about the different hiring processes, are your hiring processes and expenses paying off?