Article: why recruitment is an essential strategic function
The business implications of hiring mediocre people
When you hire mediocre people, one or more of the following things may happen:
Increased management effort
By default, mediocre employees are higher maintenance and demand more management attention and worry. Time spent managing the demands of problem employees could be better spent on the best people in the team and bad managers have a multiplier effect on the productivity of others.
Customer satisfaction and error rates
Mediocre employees send a message to your customers that you are getting weak or that you don't care about them. Furthermore, errors by mediocre employees may result in losing sales and occasionally customers.
Training time and cost
Because they lack competency, training given to a mediocre employee has to be longer and more remedial. This time spent in training has a negative implication for them becoming productive.
Mediocre employees have fewer and less brilliant ideas, meaning that 'time to market' will be dramatically slowed by the distracting nature of mediocre ideas and questions. Trying to humour or be sympathetic to mediocre staff who don't understand what the rest of the team is trying to achieve wastes valuable time and energy. Michael comments "The important thing to do to avoid this wastage in productivity is to hire winners who share and contribute to your winning team's vision from the off and who really can hit the ground running"
Your competitive advantage
Every mediocre employee you hire is one bad hire your competition cannot now make. A mediocre employee takes up a 'space' in headcount that cannot now be occupied by a 'superstar'. Mediocre employees give you less for your pound in terms of productivity. Since, on average, 60% of all business costs are attributed to employee expenses, inefficient use of these funds is a major corporate weakness. Think about the implication that hiring a mediocre CEO or top manager/director will have on your stock price and the willingness of others to partner or merge with you.
"Surely it is better to buy a superstar employee into the business who costs 25% more in year one but who is going to be 50% more productive than a mediocre employee who comes with no agency or search fee" comments Michael.
Other Employees productivity
Superstar employees often resent being on the same team as 'losers' which leads to greater attrition. The demands of a mediocre employee also lead to slower team productivity
Image and PR
Mediocre employees send a message to the competition that you are becoming weak. It also sends a message to future recruits that you are not a selective employer, which can be especially damaging to those businesses who hire through their own networks of contacts or employee referral programmes. Mediocre employees send a message to current staff that a downhill trend is beginning, where conversely, superstar employees motivate and inspire others. High turnover rates prompted by mediocre hires sends a message to other recruiters and potential applicants.
Other costs and implications
Bad hires often cost the same in terms of salary as their stronger counterparts. A Superstar employee is likely to bring in 5 times their basic salary or more in terms of revenue. It is easy to see the greater cost and strain on HR departments through increased time spent interviewing, disciplining and firing mediocre employees. HR time and image is adversely affected.
What you have to do is hire people who:
Contact us for an informal and confidential discussion on how this can be achieved.