Many employers wait until they need a new person before they start posting job ads and looking for a new employee. This will often lead to the knee-jerk reaction of “we just need to get a body in here.” “Just a body” is never what businesses need unless they are in the movie business and they are looking for extras. Though employers may need help immediately, it is far more expensive and time-consuming to hire the wrong person than it is to wait for the right person. A new employee that is smart, fits with the culture of the firm, and works hard can bring the level of work product and morale up in the office, even if that person is at the bottom of the organizational structure.
Any new hire is going to be a significant investment of time and money. Even if the new employee has worked in the same industry, there is always a learning curve when going to work in a new business. No two businesses operate in exactly the same way and it will take the new employee time to get up speed on how your specific business works. There will be a significant amount of time invested in training the new person, and there will also be time and energy spent by everyone on the team to make the new employee feel welcome in their new environment. To the same point, the investment of money by the firm is not limited to just the salary paid. We also have to consider the cost of the decrease in productivity of current employees who are responsible for training the new person.
Employment Numbers Are Not on Your Side
According the US Department of Labor Bureau of Labor Statistics, the US unemployment rate in October 2018 was 3.7%. This number has been steadily declining since it’s recent peak in October of 2009 at 10% (https://data.bls.gov/timeseries/LNS14000000). The unemployment rate has not been as low as 3.7% in nearly 50 years. Because of this, the current employment market could easily turn out to be the most difficult time to find great employees in our careers. In an employee’s market, finding and keeping good employees will necessarily be more difficult.
Because there are so many job openings and firms looking, qualified candidates who would fit into different firm cultures are not staying unemployed for long, and they often receive multiple offers quickly after they start interviewing. While some candidates are just looking to get the most amount of money in a new position, creating a bidding war among several potential employers, it is far more common for a candidate to look for a specific salary range, and then look for the firm culture that they feel the strongest connection to. It is truly a scenario where the potential employee is interviewing the members of the firm to see if he or she wants to work with those people every day. Also, because of the changing landscape of mandatory health insurance and increasing education of sound retirement planning, employees are requesting more benefits from employers in addition to the base salary offers. Competitive firms are offering a full gambit of benefits because they know this will attract the best candidates. Make no mistake – great employees not only want to be paid well, they want a benefit package that is just as competitive.
Kneejerk hiring will be detrimental to your firm because of the money and time that is wasted, but also from a morale standpoint. A firm’s culture will quickly deteriorate if the employees see any position in the firm as a revolving door. If employees are not invested in building relationships with coworkers because they suspect some of them may be gone in six months, the firm can never run as a well-oiled machine. The only way to combat this is to plan ahead – look at where your firm will be in 12 to 18 months and think about what area of the business will be overloaded if you hit your growth projections. If you see some area of your business reaching capacity in the next 6 to 12 months, you need to start looking for your next hire today.
If you are ready to start looking for your next hire, feel free to schedule a call with us to discuss further.