Survey Reveals that CEOs Lack Most Confidence in Hiring people
Survey reveals that CEOs Lack most Confidence in Hiring people
According to a survey by Management Action Programs (MAP), 32 percent of the CEOs report that up to half of their new employees fail to meet expectations.
When it comes to hiring processes, 36 percent of CEOs say they lack confidence in their own company’s hiring systems, giving them a below average rating. They do not trust the process and most often end up hiring “from the guts”- opening the door to the deadliest weakness in personnel selection: subjectivity.
Subjectivity is the big killer in hiring. Not only does it lead to the wrong decisions, it also opens the door to legal liabilities.
Lee Froschheiser, President/CEO of MAP, a business-consulting firm, says the at-risk hiring process is very serious. The cost of losing a new hire can run two to three times his or her annual salary — both in hard and soft dollars — and the total expenses are generally much higher than that. (1)
The survey also uncovers that CEOs worry about how today current events could impacts their company’s potential. However, it is “internal issues” such as expansion, employee retention and marketing & sales that keep these business leaders awake at night.
The survey also indicates that CEOs rely mainly on referrals to source new employees. Other methods, listed in order of popularity, include: print advertising, online advertising, external search firms and their company website ads.
We have experienced this same type of weakness & discomfort about the personnel selection function, after working with over 20,000 companies across the world. My personal observation is that most successful entrepreneurs put more attention where others don’t: they spend more time and allocate more energy to attracting, finding and selecting top players who bring obvious added value to the business and who work toward achieving the Management’s goals & purposes.
As quoted by the great business author Jim Collins in his book “From Good to Great,”
“The good-to-great leaders began the transformation by first getting the right people on the bus (and the wrong people off the bus) and then figured out where to drive it…”
So, what is the morale of that story?
I have repeated these lines at least 500 times, because it is the reality and the simplicity of success in personnel selection! If you want to expand faster and stronger, you need to apply these basic truths:
- Every business owner & CEO should know that the differentiating talent between successful entrepreneurs and others is the ability to be a top recruiter.
- Delegating the hiring process does not mean that a CEO should not know everything about it. At the end of the day, it is your company’s money that a recruiter loses when they make a hiring mistake. People-related mistakes are the costliest and sometimes the deadliest for a small business survival. If you want to keep a tight control on your finances and profitability, start there first!
- Hiring is marketing! You need to apply the (new) rules of marketing to your hiring process. Very seldom can you expect that from a Human Resources Manager. Smart recruiters use their CEO’s help to attract good people. Look at recent airline commercials – CEO’s, not actors, make their point.
- People work for people – NOT for companies. Even if you have thousands of employees, the best of them are working – and keep doing their job because of their respect – sometimes admiration for their boss. In a small business, you are the ultimate boss. And this delicate aspect of leadership unfortunately tends to be overlooked by many CEO’s. Make sure applicants coming for an interview have an opportunity at least to shake your hand. Because at the end of the day they will decide WHO (not what) they will devote half of their life to.
- Spend more time “hunting” for good people. Develop a personal image, as business owner, of an entrepreneur who is well aware that expansion mostly depends on people – not just on great ideas or even great products. Be a people guy!
At No-Fail Hiring, we devote our time and energy to help small business/practices get the right people on the bus. We also train executives to develop the most effective and legal-proof hiring process. Because we know it is where the differences are made.
To your success,
Best-Selling Author of “No-Fail Hiring 2.0”
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