For most organizations, employee payroll, benefits, and related costs make up a significant portion of total business expenses. In fact, a new study from the Predictive Index, a talent optimization platform, found that labor costs account for 64 percent of an organization's expenses.
For the study, the Predictive Index surveyed 600 executives from across 20 industries. The same study found that less than half (49 percent) of hires in 2019 were deemed "good hires."
Considering how much organizations invest in employees, how can your team ensure you hire qualified candidates who are worth your team's time and resources? Here, a few tips.
1. Avoid bad hires with a detailed hiring process.
Given the tight labor market, top job seekers are off the market within 10 days of beginning their job search. Because of this, your team might want to speed up the hiring process, skipping critical steps along the way. But without a step-by-step hiring process in place, your organization risks making bad hires -- ultimately throwing away money as a result.
While most organizations have some form of interview process, your team should make sure to ask all candidates the same questions to gauge their fit for your open roles on an objective scale.
Beyond interviews, other steps you can take to verify candidates are qualified for your open roles include: skills tests, reference checks, and background checks. By investing this time and money during the hiring process to weed out potential bad hires, you can ensure you're only hiring employees who will drive positive results for your team in the long run.
2. Outline defined, measurable goals.
According to the Predictive Index study, more than one-third (34 percent) of respondents said worries about employee performance and productivity keep them up at night. But in some cases, a new hire might be considered "bad" or not reach his or her full potential because they don't have clear expectations of what's needed to succeed in the role.
Starting with your job descriptions, include an accurate overview of the day-to-day responsibilities of your open roles so you attract top candidates who are motivated by these responsibilities. Many of those who are not a fit will likely weed themselves out before even applying.
Once employees are hired, during their first week, these responsibilities should be discussed with their managers. At this time, managers can also share any key goals or metrics that will be used to measure success in the role and help employees move up the career ladder.
If it isn't clear what's needed to succeed out of the gate, employees won't know where to start, which will lead to lost productivity and profitability on your team.
3. Set employees up for success with training.
Given today's competitive hiring market, new hires won't necessarily check every single box on your list of requirements and desired experience. But if you hire a motivated candidate who doesn't exactly match your requirements, he or she can end up being one of your most productive hires with the right training.
To succeed and stay motivated in their roles, your employees -- especially those with limited prior experience -- need continuous training that goes beyond initial onboarding.
This training can be as simple as video training, which enables your team to watch videos on their own time while saving your business money on traveling to outside training sessions. Other options include interactive web-based classes, training sessions offered directly by your business, and training offered from outside sources.
While employee training might add to your total business expenses up front, it's worth your investment, as it will help ensure employees are continuously learning new skills to drive productivity for your team.
Hiring the right employees is critical to the success of your organization, so it's important to only invest your time and resources in staff who are motivated to succeed on your team. While employee-related costs are a significant business expense, by following these tips, you can make sure your team is well worth your investment.