Proactive Recruiting: You Can Either Find the Best People Now, or Pay for a Bad Hire Later

When hiring new employees, are you proactive or reactive? That is, are you out there actively seeking well-qualified candidates that fit the culture of your company? Or do you wait until somebody quits, retires, or gets fired and then post an opening on a job board and hope for the best?

It seems to me that most of the clients I work with today fall into the “reactive” category. I don’t see many hiring managers proactively seeking out potential employees.

There’s a great old saying, popularized by the automotive oil filter maker Fram, that applies here: “You can pay me now, or pay me later.”  Basically, the gist of Fram’s ad campaign was that consumers could pay three dollars to get a new filter now, or they could wait and pay thousands to have their engines rebuilt later.

The slogan is surprisingly relevant to the world of recruiting: you can put the time and attention in to find great candidates proactively, or you can spend three or four times as much time and money fixing bad hires reactively.

The Internet Alone Is Not Enough

Most hiring managers rely strictly on the Internet to source candidates these days, but if you want to find the right candidates, the Internet alone is not enough.

Most corporate recruiters have gotten used to taking orders: they get a request from a department within the company; they post the job qualifications on a job board; they hope they can find a decent match, and they take whatever fills the inbox.

When I suggest that hiring managers and recruiters be more proactive — that they actively market for talent — they immediately tell me how they don’t have enough time.

Really? Because you do seem to have enough time to dig through hundreds if not thousands of applications, interview 10 individuals who are not good fits for your company, and even hire for the same position three or four times in as many years.

Can you even imagine the cost of that whole debacle?

The Cost of a Hiring Mistake

Just because you receive 1,000 applications, that doesn’t mean the best person for the job is among those applicants. Furthermore, hiring a candidate just because they are the best of a bad bunch is a supremely costly mistake. Studies show that replacing an employee — and you’ll definitely have to replace that “best of a bad bunch” candidate soon — can cost as much as twice that employee’s annual salary, especially when it comes to managers and leaders.

A recent LinkedIn post from Maynard Webb, chairman at Yahoo!, notes that many hiring experts and management professionals believe that only 50 percent of all hires are good hires. Webb also notes that, according to Geoff Smart and Randy Street’s book Who,

“[T]he average hiring mistake costs 15 times an employee’s base salary in hard costs and productivity loss. That means one hiring blunder on an employee who earns $100,000 annually will cost a company $1.5 million or more. Make 10 of those mistakes a year, and you are out $15 million annually.”

The effects of bad hires reach further than many of us realize. Those are real dollars diverted from the bottom line, cash flow, and terminal value of your company.

Building Relationships

Taking the time to truly market for talent and build relationships may be more difficult and time-consuming in the very beginning, but give it a chance. Putting in the time and effort to seek out those individuals who are well-qualified, have great attitudes, and fit well within the company culture will pay huge dividends in the future. You should have one or two “ready to hire” candidates at all times.

When hiring for the best, you need to look past the candidate’s resume. Skills, credentials, training, and education are important, but they can only go so far. The candidate also has to be the right fit, and that’s not something you can see in a resume — but you can see it when you get to know your candidates through proactive recruiting.

Being proactive also buys valuable time, a luxury that reactive hiring processes don’t allow. When you recruit proactively, you get to really know a candidate and make decisions based on what you see over weeks or months, not minutes. A candidate who interviews well might fool an interviewer for an hour, but they won’t fool a recruiter for weeks.

So get out from behind that desk! Get out there and make something happen — don’t just wait for it to happen to you! Make your company the company of choice, not the company of last resort!