Talent acquisition has hit an inflection point. Organizations that operate with outdated strategies and technology are facing intense pressure to rethink the way they source, recruit and hire talent. Above all else, companies looking to attract the best of the best must align their talent acquisition strategies more closely with business objectives. According to Brandon Hall Group’s 2015 research, only 10% of organizations have an optimized strategy that reflects organizational goals — a slight increase from 8% in 2014.
More than ever before, organizations must think more strategically about their talent acquisition processes and invest in solutions that identify quality talent. With the competition for talent and shifts in workforce demographics, organizations can no longer afford a bad hire. Yet, over 90% of companies admit to making bad hires each year. Organizations that continue to make the wrong decisions about talent jeopardize organizational growth as well as retention and engagement strategies.
While there is much debate on what is at stake when making a bad hire, it is clear that the cost increases significantly higher up in the organization. During qualitative interviews, some organizations cite that hiring the wrong executive can cost 3-5 times their salary — partly because filling these positions takes more time. Brandon Hall Group found a significant increase in the average cost of hire for executives compared to other job levels in the organization.
Below is a look at some of preliminary 2015 data.
Average Cost of Hire by Job Level
|Mid-Level Managers||$ 1,501.79|
|Emerging Leaders/Hi-Potentials||$ 1,249.07|
|Individual Contributors||$ 1,062.72|
|Entry-Level Positions||$ 740.63|
Source: 2015 Brandon Hall Group Talent Acquisition Study
We will be publishing more research on what these metrics mean and the action steps needed to mitigate the cost of a bad hire. Stay tuned…
–Madeline Laurano, VP and Principal Analyst, Brandon Hall Group