Even the best selection methods cannot “guarantee” success. However, you increase our chances of finding the “right” person by using a sound, reasoned method to select the people who will join your team.
The benefits are obviously mutual for both your company and the person hired. The company benefits from improved productivity and business success, and the individual gains a satisfying job, personal growth, achievement and perhaps eventual promotion and a career.
However the consequences of poor selection are far more significant.
It usually takes a lot less time to make a decision to employ a person than it takes to terminate them. Terminating a person’s employment is time consuming, expensive and traumatic for the individuals concerned.
It can lead to negative feelings all round and even legal action if the person feels that they have been unjustly terminated.
An indication of the nature of the costs involved in terminating and replacing a person are shown below:
Direct costs – terminating employment
- Termination payment and benefits
- Out-placement assistance
- Legal costs if taken to Fair Work Commission
Direct costs – replacement costs
- Interview time
- Search and advertising costs
- Reduction in productivity while unsuitable person was employed, and while waiting for a suitable replacement
- Training costs
- Effect on credibility and reputation because of incorrect decision
- Effect on team morale (those who remain behind may be changed in their attitudes, motivation and good employees may even leave your business)
- Additional workload on other employees if the selected person is unable to competently fulfil their duties, or while awaiting the replacement of an unsuitable person
When you’ve hired the wrong person there are a number of things that happen in your workplace:
1. The employee has a period of less than optimum performance after which they resign.
2. There is a prolonged period of underperformance until retirement.
3. There is a period of underperformance after which the person is terminated.
None of these are optimal for your business and all show why it’s critical to get recruitment right.