How and Why to hire great people – every time
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Transcript of How and Why to hire great people – every time
How to hire great people – ALWAYS
“Human Resources is the greatest asset an organization has and it is the only asset that appreciates daily.”
Problem Statement
Problem Statement 1: “How to
hire great people”
+Problem Statement 2: “Always”
Problem StatementIt is important to understand there
are two problem statements here. We can hire great people
sometimes due to various reasons ◦Strong referral◦Chance (right time, right job, right
people applied)◦Any other reason
However, to hire great people “Always”, we need a process.
ProcessStage 1: Planning
Identify need for recruitment (open
position)
Develop JD
Activities, sources and timelines
Select interviewers
Stage 2: Recruitment
Job posting, attract potential
employees
Initial Screening
Interviews
Stage 3: Finalize
Select from interviewed pool
Reference checksNegotiation and
Roll out
Business Case for the processThis process makes sure that we
“always” hire great people. Now that we identified a process for hiring great people always, we need to evaluate the Business Case for this.
The following approach is considered for the Business Case:
Cost of the Process vs Return on Investment (ROI)
Cost of Process (per candidate)Stage Steps Involved Cost
(Man Days)
Cost (Rs)
Stage 1 - Planning
Identify need for recruitment (open position)
2
Develop JD 0.5
Activities, Sources and Timelines 0.5
Select Interviewers 0.5
Stage 2 - Recruitment
Job posting, attract potential employees 2 500
Screening Candidates 1
Interviews 4
Stage 3 – Finalize
Select from interviewed Candidates 1
Reference Checks (Outsource) 100
Negotiation and Rollout 1
Total 12.5 600
Assumptions• Cost of Background check assumed at Rs.100/ candidate based on data from discussion forums•Portal cost assumptions• Rs. 50000 - annual subscription• 100 candidates recruited per year• Hence, cost per candidate is Rs.500
•Man days to Rupees Conversion• Average salary of employee is 10 LPA• Average salary of employee per man day is Rs.3333(10
L/300 working days)
Category Cost(Rs.)
Man days (12.5 man days)
41666
Subscription and other costs
600
Total Rs.42266
Cost of Recruiting wrong candidate
•Entire hiring process needs to be run again (for hiring a fresh candidate as replacement) : Rs.42266•We lose a 6 month period (assumption based on research) before we realize the candidate selected is a wrong hire• 150 man days (Rs.499950)
•Probability of a candidate being a wrong hire is 0.2 (1 out of every 5 hires).
•So, total cost is :Specifications Cost
Iterating Recruitment process
42266
Lost Time due to wrong hire
499950
Total cost 542216
Net cost (probability of 0.2)
108443.2
Business Case Evaluation
Cost of Following process for “Hiring Great People Always”
42266 Rs
Cost of “Not Hiring Great People Always” (cost of not following process and hence hiring wrong candidates)
108443.2 Rs
•Hence there is a clear Business Case for Hiring Great People Always•The opportunity cost of not hiring great people Always is huge as mentioned above
References https://www.adp.com/tools-and-resources/calculators-and-tools/~/
media/PDF/ADP%202009%20Screening%20Index.ashx http://
articles.economictimes.indiatimes.com/2013-01-21/news/36462889_1_verification-employee-fraud-koramangala
http://www.executiveboard.com/blogs/one-in-five-hires-are-bad-hires-2/
http://www.ere.net/2013/10/28/get-rid-of-your-bad-hires-quickly-with-a-no-fault-divorce-process/
http://www.citehr.com/110974-job-portals-costs-service-tax.html