Band-Aid Approaches Won’t Win the Talent War
As the founder of the MPR System, I’ve spent the last 30 years observing how hiring decisions are made. You know what I found out? People aren’t that important.
Yet, you always hear executives say, “People are the most important asset at our company.” Do they really mean it? I don’t think so, judging by their actions. Business executives seem far more concerned with sales, marketing, production, and finance.
Managers “talk the talk” on hiring, and don’t “walk the walk.” What they do is much more important than what they say.
There is a tremendous hidden cost to bad hiring. If you factor in cost of ads for recruitment, salary, training, productivity losses, and new customer opportunity losses, you begin to get the picture. The current formula for estimating the minimal costs of poor hires is two to four times annual salary. So, if you’re paying someone $40,000 a year and he turns out to be a bust, he will probably cost you between $80,000 and $160,000.
Hiring StrategyChanging your approach to hiring is critical. Like it or not, talented people are the key ingredients for a company’s survival and growth. Those that don’t keep top talent will be forced to sell their business or go under altogether. A recent McKinsey study, called “The War for Talent,” makes this point emphatically.
But here’s the catch: there is and will continue to be a shortage of talented personnel from whom to choose. Companies simply must educate and provide support to assist managers in making smart staffing decisions.
When you hire, you are renting or leasing behaviors, only it’s a far more important decision than which car you choose. You can either hire people who have the “right stuff” for your organization – or resign yourself to corporate mediocrity.
Here, then, are my suggestions about what you can do to win the talent war.
Publication date: 01/29/2001