Two of the most difficult, important and expensive organizational tasks are promoting and hiring the right employees. Yet research shows that all too often people decisions are made by "gut" intuition.
Remember that time you thought you had found the just-about-perfect candidate? Then two weeks later, you knew it was a bad hire ... or the time you promoted a super high performer, only to see him fail in his new job?
Why people decisions are hard
Based on scientific research we know interviews and résumé reviews can't identify the people who will best fit their jobs. People tend to make personnel decisions subjectively and are influenced by natural personal bias, even when they think they are being objective.
Add to this that résumés often contain inaccurate information — 40% of résumés have discrepancies in employment and education and more than 50% contain other errors. One federal report estimates that about 500,000 people falsely claim a college degree — that group includes everyone from CEOs to students.
The cost of people decision mistakes
The cost of hiring is an enormous expense that most companies underestimate. Take a job that pays $12.00 per hour (about $24,000 per year). Believe it or not, it costs nearly $7500 to fill this position and for higher paid jobs, the costs in hard dollars, time, and productivity are much higher. And the longer a position stays unfilled, the higher the cost.
Internal decisions like job assignments and promotions are equally expensive: managers estimate personnel mistakes can cost about 50% of annual salary, yet few companies actually calculate their human resource costs.
Personnel mistakes can hit the bottom line pretty hard. Managers report costs that include:
- Lower morale in the department or organization
- Decreased employee productivity
- Lost customers
- Additional / lost training costs
- Additional / wasted recruitment costs
- Severance costs
One large study found that the average cost of a bad hire is 2.5 times the annual salary of the position and more than a third of companies in the study estimated the cost to be four or five times the annual salary. So if you make two or three mistakes a year, the result is ... well ... bad.
Improving personnel decisions
In a difficult economic environment, it is even more important to make the right decision when coaching employees or when you have to fill a position through a promotion or a new hire.
The better the match between a person and the job, the more productivity and financial benefit accrue to both the employer and the employee. Employees who are a good match are more satisfied with their job and so are less likely to look for a new one (and even in challenging economic times, your best employees are looking.) Increasing job tenure, even by six months, can mean big savings. Not only is there a cost savings for the employer, research finds that the longer an employee stays with an organization, the more knowledge she acquires and the more she shares that knowledge with colleagues, thus raising the knowledge level of the company's entire workforce. Smarter people = more bottom line success.
affintus helps you select and hire the people who will contribute most to higher productivity and a better bottom line. The key is finding people who have qualities similar to your top performers. The problem is most organizations haven't had an easy way to access this information ... until now.
affintus is delivered as an easy-to-use SaaS (software-as-a-service) so you can quickly and easily get the information you need to make good people decisions. The process is simple.
First, we analyze your best employees (those who are 10% - 50% more productive than average employees) and describe them in your custom Job Formula. The Job Formula includes details about their cognitive, personality, and work culture preferences — the constructs known to predict future performance.
Then affini-T, our job matching algorithm, quickly and accurately identifies the people who, like your top performers, have a high affinity for the job being filled.
affintus helps employers minimize expensive promotion and hiring mistakes and realize the financial and productivity benefits of data-based people decision making.
Contact us
Contact affintus to learn how to get the data you need to get more stars on your team.