';

How bad executive recruiting hurts good businesses

As a general rule, businesses sense that the quality of their recruiting efforts comes back around to affect their company, both positively and negatively. While they may have a sense for its importance, however, few actually understand just how damaging poor executive recruitment can be to a company's bottom line.

In an effort to shed some light on this uncertainty, a Boston Consulting Group survey found that recruiting ranked first among 22 different HR functions as having the highest impact on revenue and profit margins. So just how do companies with poor recruiting practices suffer? Let's take a look:

Lost product sales

Candidates who have a bad experience during the recruiting process are often left angry and frustrated. As a result of that disenchantment, businesses lose sales from 23 percent of candidates, who, if the experience were to be positive, "would be more likely to purchase products or services from the company," according to CareerBuilder.com. These businesses lose additional sales from 9 percent of these candidates' friends and colleagues, who withhold purchasing upon urging from the candidate. This can be especially detrimental to companies interviewing executives whose businesses are responsible for large sales contracts.

Reduced future job applications

Of these disillusioned candidates, 42 percent will never seek employment at your company again, according to CareerBuilder. In addition, 22 percent will tell their friends and family not to apply for jobs with you, and even more could post negative reviews online and on social media dissuading countless others from sending you their future applications. 

Lower revenue

While it is no surprise that hiring a below-average performer in a revenue-driving position, such as CEO, will result in a significant loss of revenue, poor performance from new hires in less revenue-focused roles, such as innovation and customer service executives, can have a negative impact on revenue as well. Bad hiring for these executive roles could stymie innovation in your products or lead to poor customer service after the sale. 

Additional replacement costs

Bad hires usually quit or need to be let go, which can have a deeper financial impact than you might realize. Beyond the cost of needing to recruit for a replacement and pay hiring managers to spend additional time with new candidates, your business will also lose revenue for every day the position is left vacant. 

Working with a retained executive search firm can help you to both bring in more qualified candidates and ensure those who walk away do so without any negative feelings about your company. 

Finding people is easy, but finding the RIGHT people is not. YES Partners helps companies FIND the right people – for all company functions, across many industries and globally.

Recommend
  • Facebook
  • Twitter
  • Google Plus
  • LinkedIN
  • Pinterest
Share
Tagged in
Leave a reply

© 2017 YES Partners, Inc.