How do you attract, assess and retain the best leadership talent in your organisation?
Dun & Bradstreet tells us that the cost of recruiting a new leader or manager into your operation averages out at about 150% of the annual salary you have to pay them. Not cheap, but so long as you’ve picked the right candidate, it’s an investment that pays off quickly. But what happens when things don’t go to plan? It is estimated that 80% of employee turnover can be attributed to the wrong person being hired in the first place, and the overall financial damage to a company for each wrong hire at management level will cost anywhere between £185,000-£522,000.
No matter which way you cut the numbers, hiring the wrong people is costly, but while toting up the wasted cash a bad hire costs makes for good tabloid reading, it doesn’t really help us address the problem. In the real business world, bad hires are pretty rare: what we’re really talking about are good hires with potential that’s allowed to fester. It’s easy to say you hired the wrong people, but what if the problems are about hiring the right people and giving them the wrong support? Without access to the right development resources, mentoring and constructive feedback that will allow them to reach their potential you’ll incur additional ‘talent bleed’ costs along the way that you hadn’t bargained on. By the time your ‘bad hire’ finishes their exit interview at the 2½ year point, how many opportunities for identifying additional skills and abilities in that individual have been missed?
We’ve teamed up with world-class assessment solutions provider Assess to make leadership and management assessments the latest addition to the GoodPractice product portfolio. It’s a new partnership that adds a powerful analytical front end to the learning materials our customers already use to support leaders and managers within the workplace.
Enabling talent to succeed is part of the human capital investment, and companies that have embedded processes in place to support this will be leading the way as the next generation of leadership talent takes to the floor. The focus must shift from blaming recruitment decisions when it goes wrong, to ensuring the people you hire are turned into success stories once they are part of your team.
HR professionals can gain in-depth insights about potential leaders from assessment tools that add definition to the grey area that always exists between potential exhibited in a worker and potential realised. Leadership assessments such as personalised psychometric testing help define and add real granularity to the needs of the person being assessed, and makes addressing these needs more feasible for the HR professional. This in turn accelerates leadership progression, keeps leaders loyal, thereby avoiding knowledge bleed through high turnover and ultimately – cutting costs off the bottom line.
A report this month by the US business think tank Build examined the commonalities between 100 of the top most sustained-growth companies in America. Overwhelmingly, the top priority shared by these disparate industries was a focus on talent, and the retention and engagement of their people. When asked “What might derail your company’s growth or even threaten its survival?” 81% of those surveyed agreed that the sudden loss of an employee would represent the main threat. Yet only around half of those companies admitted to having targeted talent management and retention as a high priority action in their business. We believe this number will start to increase, and what starts over there is sure to fuel a trend in the UK, so we’ll be watching how this behaviour changes closer to home in the near future.