When it comes to building a successful high-growth business, even the most detailed business plan can be derailed by hiring the wrong employees to carry out the corporate vision.
In fact, the estimated cost of a mishire can be 5 to 27 times the amount of the employee’s salary, according to Topgrading.com. Not only are there hard costs involved in hiring and firing employees, but mishired personnel can also cause a ripple effect by lowering morale and hampering sales and performance results. A really bad hire can even cause A-level employees to leave your business in search of better opportunities.
When building a strong business foundation, building a strong human resource and recruitment plan is one the most important tasks facing executives.
The Topgrading Method
To reduce the possibility of a mishire, following a rigorous hiring process can significantly reduce the chances of the rate of mishired employees. One such method, the Topgrading Method, is a rigorous 12-step process that improves “the productivity, profitability, and progress of an organization by recruiting, hiring, and developing teams of top performers.
Using the Topgrading Method, the American Heart Association improved its rate of promoting A Players into upper management positions from 25 to 95 percent according to this study. As a result, the organization was able to raise $50 million more for their programs in a single year.
Rigorous Hiring Process
Even if you do not utilize the Topgrading Method, we recommend you put into place a rigorous hiring process that allows you to hire slowly and carefully consider potential employees and to fire quickly when employees who don’t match your corporate culture.
Over the years, we have seen our clients realize a significant difference in the caliber of their executive team when they adopt a careful hiring method–whether they use the Topgrading method or an alternative but similar hiring protocol.
It is especially important to use rigorous methods when building or growing your executive leadership team, as these employees tend to have the biggest influence on the entire company culture and as such must be carefully screened and hand selected.
Team members who work for a misaligned leader may do more harm than just leaving the company. They might also start venting their frustrations on public review websites or social media, which could do irreparable harm to the company and also cause confusion or decrease loyalty among potential customers reading these social media posts.
Carefully hiring your executive team can benefit your company in many ways, across all levels. It can increase morale among employees as it drives home the message that you care about them and that you are making the effort to hire leaders that are the right fit. Your employees will feel less stress and experience better communication as they work with leaders that guide them and help them lighten their load.
Be sure to incorporate employee feedback in the hiring process. If your team didn’t work well with a previous manager because of micromanagement issues, for example, be sure to address that in the next round of hiring, it will show you listen to your employees and you care about their feedback.