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The Basics of Hiring ROI
Caution: you are about to enter the zone of the CFO. Tread carefully. Bring your green eyeshade and calculator. However, if you master this information, you'll be able to calculate the ROI for your current hiring processes and any new hiring initiative imaginable. Beware though, if it turns out that the ROI of your current hiring process is less than 25%, you're in big trouble. On the other hand, if any proposed new program is over 100% you'll be able to get instant CFO approval and a high-five, along with the check. But don't be seduced, any new hiring programs might not work as promised if the economy recovers anytime soon. Then you'll just be scrambling to stay even.
To see the importance of calculating hiring ROI, just multiply the number of people you're forecasting to hire in the next 12 months by their average compensation. This is probably a big number. For example, if you're planning on hiring a group consisting of college grads, experienced techies, and a bunch of customer service reps, you're probably looking at an average compensation of $65,000. If you're hiring 1,000 of these folks, this means you'll be spending $65 million on new hires in the next 12 months, and if you're going to hire 100 you'll be spending $6.5 million.
Over the past few months I've been making some not-so-bold predictions about the demise of job boards and the rise of the "hub and spoke" sourcing model for finding a better class of active candidates. Rather than repeat the prognostication here, I'd suggest that despite the shift to this new and improved sourcing model, in the long run it might not really matter.
Despite my optimistic view of the past few months, I'm considering the possibility that the recovery could be very long in coming and very slow in growing.
Over the past six months, I've worked with dozens of major companies and some of the latest new recruiting and sourcing technologies. Based on this, it's not a reach to contend that how companies will find, recruit, and hire top talent in 2010 and beyond will be far different than how it's been done in the past few years.
Whenever I need an idea for an article I call Doug Berg, the CEO and/or founder, or something like that, at Jobs2Web. So to meet this week's need, Doug suggested I write about my reticular activator. I thought this was a bit personal, and while initially offended, it turned out to be great advice. I think you'll agree, too.
Take a look at this letter from your hiring manager. As you read it, make it personal. Put your name at the top. Think of a hiring manager you think would send you something like this and put his or her name at the bottom. Then send it to a hiring manager who is the least likely person to send it. Hiring top people is a two-way street. Unfortunately, for most recruiters it's always uphill.
Dear (put your name here),
I'm frustrated. You've let me down too many times to let this continue. As your client, I believe your performance must improve in order to succeed in building and developing a strong team. Your role is critical, but somehow you've trivialized it. I don't want to see average candidates anymore and I don't want to see people who are obvious misfits. You need to take on a bigger role in this process, be more involved, and become more of a consultant than a vendor.
However, with that said, I am not without fault here. Since I want you to have an equal stake in the outcome, I must be more involved in the process from beginning to end. With this in mind let's describe our new partnership relationship in finding and hiring more A-level talent.
Can Your Company Hire A-level Talent?
Every company wants to hire the best people, but most haven't figured out how to do it consistently and across the board. Here's a short checklist of prerequisites. Rank yourself on a 1-5 scale to see where you stand, with 5 being the best and 1 being worse than pretty bad. If you don't score at least 35-40 on this 10-factor survey, you've got your work cut out for you. After you've finished this assessment, send us an email if you'd like to find out how to get started right away on hiring A-level talent every time.
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