Author: Mike Meyer, Portman Partners Managing Director
Costs of hiring the wrong person go beyond the obvious in the age of ‘quiet quitting’.
There’s an old adage that’s been doing the rounds in human resources circles for decades; ‘hire hard, manage easy’. It suggests recruitment and selection should be discerning and rigorous and managerial oversight less onerous given the right person is in the right job.
It could be argued that the sentiment is more suited to a time when talent was more readily found and when people were less able to move roles with ease if they were dissatisfied with their role, their team, or their boss for example. However, just because talent is more difficult to come by (and keep) in an age of the ‘great resignation’ and global labour and skills shortages, it does not mean that a judicious process of recruitment and selection should not be followed.
But is this the case? Recruitment specialist Robert Half reports that increased demand for professionals in technology is putting pressure on a tight talent market. Research suggests that 61 per cent of survey respondents said they had settled for a candidate who failed to meet the requisite capabilities for the role for which they were hired and 56 per cent said that they’d rushed the recruitment process.
Ask any recruiter or human resources professional and they’ll tell you that the financial costs of hiring the wrong person can be between 50 percent and 250 percent of the wrong hire’s salary. These estimations take into consideration advertising, time taken on recruitment process, salary costs on which you may not make a return, onboarding costs and potential legal costs. But this is an obvious and a fairly rudimentary way of considering the costs of hiring mistakes.
It’s no secret that the digital infrastructure sector has long experienced talent, labour and capability challenges – some organisations more than others. However, all have the potential to ‘hire easy, manage hard’ out of sheer desperation to fill vacant roles. But the short and long-term consequences can be more detrimental than fundamental financial losses. Here’s a few additional consequences that must be considered.
Probably one of the most obvious consequences of a hiring someone who is unable to do the job for which they were hired is lost productivity. A new employee who does not have the suite of capability or, indeed, the application or motivation to undertake the role will take more time, make more mistakes, require additional supervision and draw on the goodwill of other members of the team. Chandler Macleod report that 39 per cent of businesses experienced a drop in productivity due to hiring the wrong person.
Impact on morale
Where mis-hires impose an additional load (practical or cognitive) on others, team morale is likely to be adversely affected. Pressure applied to team working arrangements, team outputs and quality of work can lead to conflict, disenchantment and disengagement of other capable team members.
Emerging from the pandemic, the ‘great resignation’ or ‘quiet quitting’ phenomena illustrate that people are more emboldened to leave jobs or withdraw their discretionary effort if their work or their workplace fails to provide a satisfactory experience. The fragility of staff morale post lockdowns, for example, should not be underestimated. Exacerbating the fragility of workforce engagement by mis-hiring will likely result in turnover of existing staff.
‘Keeping the lights on.’
Although not precisely measured, it’s long been known that when a human is put into the middle of complex systems or where they’re asked to make decisions as rational actors in non-rational situations for example, mistakes happen. The risk is elevated when the wrong person in the wrong role is let loose in a data centre, for example; mistakes happen – at scale. Research conducted by The Uptime Institute estimates that 70 per cent of all data centre outages are caused by human error. This is not just associated with people in technical roles but poor decision-making at senior management levels is also implicated in the risk of outages. Ensuring you have the right person in the right role with appropriate capabilities is important for technical, managerial and leadership roles alike.
‘One and done’
Less discussed is the role of ‘diversity hires. We’re not talking here of the progressive inclusion of qualified people from non-traditional backgrounds, but those brought on board to satisfy a box-ticking exercise and who may then be left to fend for themselves whilst simultaneously being implicitly expected to be a ‘poster-child’ for the organisation’s poorly executed diversity agenda. This is often referred to as ‘one and done’.
While it’s not necessarily spoken of widely (let’s face it, the topic is sensitive) appointing people to fill an arbitrary quota can put people into roles for reasons other than the competence they will bring. This is often associated with poorly articulated and misguided equity, diversity and inclusion policies or approaches. While establishing a diverse and inclusive workplace, where the value of diverse perspectives and capabilities is celebrated and embedded into workplace culture is the ideal, appointing someone for the look of it does no-one any favours; not least of which the individual themselves and those who may follow from non-traditional backgrounds. This approach sets everyone up for potential failure and puts the organisation’s reputation and employer brand at risk.
Interactions with suppliers, relationships with clients and community stakeholder engagement are key to a well-functioning organisation. Corporate responsibility, regulatory practices and, environmental, social and governance structures, arguably, have never been more important to the digital infrastructure sector. Visibility is higher than it once might have been and stakeholder perspectives are easily made public. Decisions made by senior management and leaders can have profound impact on the organisation’s reputation. Hiring competent people with a broad range of non-technical expertise at senior and executive levels is a strategic imperative. The wrong hire here may put more than a dent in productivity; it brings the potential of reputational harm and damage to the employer brand which in turn makes it harder for the organisation to attract qualified talent.
So, while there may be an imperative to switch the ‘hire hard, manage easy’ adage due to long standing vacancies in a landscape of scarce talent, those charged with recruiting are urged to review their policies, practices, learning and development support structures rather than cutting corners on the process of finding the right person with the right capabilities for the right roles.