3 tips to making great hiring the financial cornerstone of business success

3 mins, 17 secs read time

Securing top talent is crucial to an organization’s success. For finance decision-makers, it’s important to recognize that hiring is one of the most significant investments your company will make. Great hiring not only drives cost savings and maximizes talent ROI but also ensures accurate budget forecasts, mitigates risks and supports with overall business objectives. Let’s explore three essential tips to help your company make the most of this critical investment.

1. Understand the expensive truth about bad hiring practices

While it’s true that top talent positively impacts a company’s bottom line, hiring without a strategic, efficient and effective framework can have a negative effect. Poor hiring decisions can often lead to increased turnover rates, necessitating repeated recruitment efforts that drain time and resources. In fact, the impact of bad hiring practices is so profound it can affect a company for years. According to the U.S. Department of Labor, the cost of a bad hire can be up to 30% of the employee’s first-year earnings, with some estimates reaching as high as $240,000 per employee. This can include expenses related to training, lost productivity and the potential damage to company morale and reputation.

Hiring unsuitable candidates can result in decreased team efficiency and increased workload for existing staff, which can heighten stress levels amongst team members and reduce overall job satisfaction. Companies could also face legal ramifications if improper hiring processes violate employment laws. Businesses can avoid these pitfalls by investing in strategic hiring processes, including structured interviews and employee assessments, ensuring they hire the right candidates from the start.

2. Implement structured hiring practices for predictable, repeatable success

It’s a proven fact that structured hiring practices, such as clearly defined job roles, standardized interview processes and objective evaluation criteria, can have an immediate positive impact on your business. According to a study by McKinsey & Company, organizations with effective talent management practices experience 2.5 times higher revenue growth and 1.5 times higher profitability compared to peers without such practices. Predictable, steady pipeline data supports the ability to forecast talent needs for both the immediate and far future. Structured hiring ensures repeatable processes and reliable metrics that empower and support recruiters and hiring managers, leading to sustainable cost savings and higher returns on investment by sourcing and retaining top talent.

Additionally, structured hiring improves the candidate experience, enhances employer branding and increases employee retention. By consistently selecting the right talent, businesses can build a more competent, diverse and engaged workforce, ultimately driving innovation and competitive advantage. Hence, adopting structured hiring practices is a vital investment in a company’s long-term success.

Great hiring practices not only reduce costs like severance, training and search fees but also enhance team performance and ensure successful project execution, giving truly ‘people-first’ companies a competitive edge.– Paul Todgham, CFO, Greenhouse

3. Invest in high-quality hiring platforms

Investing in robust hiring platforms can yield substantial cost savings and higher returns on investment. A study by International Data Corporation (IDC) on Greenhouse customers showed $121,100 average benefits per recruiter per year, a 589% three-year ROI and an average payback on investment within seven months.

Organizations using strategic hiring platforms can achieve $4.38 million higher revenue per year and spend 39% less on third-party recruiting. By using advanced hiring platforms, companies can align their hiring processes with organizational goals, enhancing efficiency and achieving better outcomes.

Great hiring practices are fundamental to a company’s financial success. By understanding the costs of bad hiring, avoiding inaccurate forecasting, implementing structured practices, investing in high-quality hiring platforms and balancing long-term and short-term wins, financial decision-makers can ensure their organizations are well-positioned for sustainable growth and success.

Check out our new eBook, “Unlock business success through better hiring,” to learn more about how finance decision-makers can help set their business up for success with structured hiring.

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