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Select International Inc. is a Pittsburgh-based provider of employee recruiting tools and services for businesses of all sizes. It has developed Web-based, computer-based and traditional employee evaluation tools and candidate tracking systems. Facing an increasingly competitive market for good employees, many companies are taking a closer look at their recruiting practices and taking steps to improve them. But too many business leaders overlook the big picture and neglect to ask two basic -- but important -- questions:
• Why would a job seeker want to work here?
• Why would current employees want to stay here?
It can be difficult for business owners and executives to objectively evaluate their own organizations' strengths and weaknesses. However, you can bet that job seekers won’t have that problem when considering whether or not to work for your company. So take an honest look at what makes your company attractive to job prospects and what areas need some improvement.
One tool that can be helpful is the Employer of Choice Continuum (ECC). The ECC chart at the end of this article will give you a realistic idea of how much effort and cost will be required to hire the workforce you desire.
1. Look at each row and put an X in the box on the 1-5 scale that best represents your company or individual facility.
2. Make an overall judgment rating as to where your company is on the total continuum. For example, if you find that your X's are mostly in and around the 3 column, then you may decide that your overall rating is a 3.0.
Now you have at least some idea of where you are in relation to being an employer of choice. But what bottom line dollars and cents effect will this have on your recruiting budget? The answer to this question depends on the types of employees you need to hire. For example, if you are targeting unskilled, fairly uneducated applicants who aren't very conscientious and have few problem-solving skills, then your rating on the ECC will have few recruiting cost implications. On the other hand, your ECC rating will have significant impact if you're looking to hire solid, long-term employees who will make a contribution to the organization. These individuals generally possess the following characteristics:
Thinking ability. Able to reasonably learn and apply what they are taught during training. They have inductive and deductive reasoning skills suited to dealing with the everyday issues and challenges they could face on the job.
Relationship skills. Get along with people and do not create interpersonal conflicts or morale issues.
Personality traits. Have normal, stable personalities. They do not possess personality "derailers" that would result in unsafe or high-risk behavior, shrinkage, unanticipated blowups, etc.
Work ethic. Believe in work standards and will perform their job to the acceptable standard set by the company.
Job fit/motivation. Suited to the work they are performing and will stay in their jobs on a long-term basis.
You can use the chart below to determine how much effort and cost will be necessary to hire this type of individual for a company with your ECC rating in a growth economy.
* Costs include advertising, testing fees, interviewer time, administrative time, background checking fees, drug and physical assessment fees. Not included are orientation, on-boarding and training fees.
Based on our extensive hiring experience, we have drawn the following conclusions:
1. If you have an ECC rating of 1 or 2, you are simply not going to hire the long-term-contributor profile described above. You will not do it because the ROI is not there. It is too expensive to recruit these individuals and too costly to lose them to turnover. These employees are precisely the people that will leave first because they will have the most options. This does not mean that you are not going to hire good people that will stay with you for years. You can and should hire the best available people, but their profile needs to be in line with your company's profile. For example, they probably will assess lower in areas of problem solving and certain interpersonal skills.
2. As your rating moves from the 4 to 5 level to the 3 level, you must invest significantly more in recruiting to hire good, long-term talent. As you can see in the above chart, a company at level 3 must spend three times what a company at level 4 spends to hire the same profile. Because the number of very good applicants drops off significantly when your ECC rating drops from 4 to 3 to 2, it is important to find the optimal hiring profile and then invest into recruiting for that profile.
3. When your ECC rating drops below 4, expected 60-day turnover increases significantly, especially among top new recruits. These individuals simply have more job opportunities with higher-paying companies. In addition, lower-paying jobs are simply less valued by employees in general and therefore, result in higher turnover. This is true across all industries and job levels.
4. If you are a 2 or 3 on the pay scale, you should strive to be a 5 on the work environment scale. Average pay and a great work environment is a good recipe for reasonable recruiting and low turnover.
5. Every company should not be a 5. Yes, it is a tremendous recruiting advantage if your company is truly an Employer of Choice in every way, but there is also a significant payroll expense that accompanies this advantage. Many companies cannot afford to pay the high starting rate that would give them this advantage.
The chief lesson we have learned after helping thousands of facilities recruit and assess over 3 million people is that almost every company can successfully recruit, regardless of their ECC rating. But they must understand the profile of employee that will have long-term success in their company and then invest appropriately into recruiting that profile.
They must also understand that both recruiting cost and employee turnover increase with lower ECC ratings, but this trade-off can be well worth the savings experienced from a less burdened payroll. Finally, while many companies cannot be top-tier payers, every company can provide a great work environment, which makes recruiting great people a whole lot easier.
Select International wrote this article for Kiplinger Recommends. To read more about hiring skilled employees, click here. (Free one-time registration required.)
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