When you have the perfect candidate for an opening your client gave you, but the candidate is at the top end – or higher – than your client’s stated pay scale, it can be hard to convince your client to budge. But as the saying goes, you get what you pay for.
Poor hires can result in lost productivity and expenses in hiring, recruiting, and training replacements. A survey by the Society of Human Resource Management (SHRM) found that the average cost per hire is just over $4,000. But, the average cost of a bad hire is up to 30% of the employee’s first-year earnings according to the U.S. Department of Labor. However, The Undercover Recruiter reports bad hires can cost as high as $840,000 in expenses, due to hiring, retention and pay.
So, doesn’t it make sense just to bite the bullet and pay more up front to get that top talent and retain them? Sure, but convincing your client of this may take some work.
In his article, Top Talent: 10 Steps to Attracting and Retaining the Best Employees, the author offers up several tips for companies looking to cultivate high performers, including:
Confirm top talent is indeed top talent. Thoroughly assess a candidate to ensure s/he is indeed the top talent you are seeking as otherwise, you may be overpaying for average talent. My experience is certain people have an innate ability to identify top talent but even then, more assessment is warranted. Obtain multiple data points from trusted interviewers. A candidate’s prior experience and achievements are important yet you also need to assess personality and cognitive ability. Consider a more formal, scientific assessment technique as there are many affordable options. Given the high standard you are seeking, consider hiring a professional recruiter who can more quickly provide you a candidate pool which meets this standard.
Be prepared to pay top dollar. Top talent often requires top pay. If your company has HR policies and strict budget guidelines which require managers to hire within predefined competitive pay bands, this can be a deterrent to hiring top talent. Find a way to persuade those within the approval process to seek an exception. Even if you hire top talent near the top of a given salary grade, this will become a non-issue when the employee is promoted in the coming years. I submit that the incremental pay difference given to the top 10% of performers versus an average performance is exponentially returned to the organization.
Treat hiring people like a major investment. Why? Because it is! It amazes me how sometimes managers are ill prepared to interview candidates and view the hiring process as a lower value administrative process. This is a critical sales process. Assume a salaried employee who earns $60k/year costs $80k/year when benefit costs are included. If the average employee stays at a company for five years, this is a $400k total cost. Approach hiring decisions like you would with a major investment decision.
There are several other points that the author makes as far as the company engaging and retaining its new top talent, but the four above are crucial to the hiring process, and a qualified independent executive recruiter can help. When you engage an executive recruiter, they can help save you countless hours and reduce turnover costs. Sure, a recruiter will cost money, but think of it this way – due to their in-depth expertise, experience, and network, an executive recruiter will give you a properly-vetted, more qualified, better fit employee.