Recruiting staff for financial services jobs can be expensive, but it pays to get it right first time around. A recent study published by Leadership IQ has found that 46 percent of newly-hired employees fail within 18 months, while less than a fifth go on to achieve unequivocal success. Unfortunately, this poor success rate is extremely costly.
In fact, research conducted by Sandler Training found that each bad hire costs the average UK business £13,799, while other studies have placed that figure even higher once all associated costs - salary, training, impacted business performance and eventual re-recruitment - are factored in.
Of course, the costs are not purely financial. Recruitment specialists Robert Half surveyed HR managers and 52 percent reported loss of productivity caused by poor recruitment, while 30 percent reported reduced staff morale. These combined costs make it a necessity for you to improve your interview process and avoid bad hires.
Despite what many believe, the majority of bad recruits do not fail because of a technical skills shortage - they fail because they do not possess the right interpersonal skills for the role. For this reason, functional knowledge should not be the sole focus of your interview process; you should attempt to find a candidate with the right personality.
Leadership IQ's study found that the most common causes of failure amongst new hires were:
- An inability to accept feedback (26%)
- Difficulty managing or understanding emotions (23%)
- A lack of motivation (17%)
- Poor temperament (15%)
To put that in perspective, issues relating to employees' technical skills accounted for just 11 percent of failures.
"Your interview shouldn't consist of simply checking off a list of job requirements," explains Time writer Lauren Simonds. "You want to see the person behind the resume." This can be achieved through behavioural interview techniques and by steering the interview away from work-based topics and onto more personal questions.
Clarity and Understanding
With that said, it is still important to make sure you are hiring someone with the right qualifications, experience and skill set. For instance, if you are recruiting for mortgage jobs, you need to know that they understand the mortgage market and you may insist that they have a certain level of previous experience in a similar position.
One of the best ways to improve your interview process is to make sure you create a clear, well-written job description, which details exactly what the job entails and what you need from prospective candidates. This simple step can drastically reduce the number of unsuitable candidates who put themselves forward for the role.
Creating a detailed job description can also help to give you a clear understanding of exactly what you are hoping to find in a new recruit. Once you have complete clarity on what it is you are looking for, you can tailor your interview process so that it is focused on identifying the presence of these qualities and attributes.
Patience Is a Virtue
Finally, you've heard the expression "time is money", but when it comes to hiring new financial services staff, it is better - and cheaper in the end - to take a little bit longer and get the decision right.
When businesses are asked to explain the reason behind their own recruitment failures, a rushed recruitment process is one of the most commonly cited explanations, according to Sandler. Moreover, Leadership IQ found that managers feeling pressed for time was a major contributing factor towards them exercising poor judgement.
A basic but effective step is to make sure you interview candidates more than once before you offer them a job. Currently, a quarter of small UK businesses hire new employees after a single interview, but seeing a candidate multiple times can help you to look for warning signs, clarify areas of doubt, or confirm positive first impressions.