A Man was arrested outside city hall today, pretending to be a Chief Administrative Officer. Fraud investigators say the perpetrator wore a nice suit. He looked (and even sounded) for all the world like the genuine article. “He smiled like one, talked like one and even walked like one” said the incredulous municipal clerk adding, “He was found rummaging through the dumpster, looking for council minutes to send out – apparently he was intent on sending messages to councilors with his secret decoder ring”. Another former co-worker suggested that “Larry’s future is behind schedule.”
People in the city hall administration offices confirmed that “he was definitely scamming everyone”. Our sources tell us that even the mayor and council were bamboozled. Detective W.E. Gottcha spoke to us and agreed to go on the record: “He would have pulled it off too” the detective said, “but then they put him in the CAOs office he had no idea what to do”. I’m told that his face immediately went ashen and when he saw the desk he had the look of a “deer caught in the headlights!”.
It all began last month when Larry Loser (pronounced loo-zay) saw the posting for the job on some web site and turned up at city hall. The Mayor couldn’t believe his luck. “This guy is perfect” he was heard to say to the Deputy Mayor “and we don’t have to pay any fees. Then rubbing his hands together in glee, he added: “I just knew we could do it ourselves”.
Apparently, Ravenhill Group a national recruiter who specializes in municipal recruiting had been trying to persuade council that a hiring mistake could be very costly to the municipality. Some recent studies have shown that hiring the wrong person can cost thousands and even tens of thousands of dollars, not to mention the upset to the town and staff. As he climbed into his car to leave the Mayor who had suddenly come to his senses about how to recruit said regretfully “I guess that’s what we get for trying to do our own recruiting. This guy Larry is definitely stuck on the down escalator of life”.
The true cost of hiring the wrong person is a much-debated subject. Who could even begin to count the cost of the lasting damage caused to a team, department or even an entire municipality? Aside from the immediate and real cost of the hiring mistake and resulting dismissal, there’s the expense of having to do it all over again. A hiring mistake can affect morale, service attitude, service delivery, and, of course, elections. These basic costs are often multiplied, depending on the seniority of the person concerned. Further, there are nearly always unintended effects when disillusioned team members also leave.
Estimates of the true cost of a hiring mistake vary. A quick Google search of recent thoughts on the subject suggests that two times the annual salary of the individual is a good place to start. The Chartered Institute of Personnel and Development (CIPD) estimates two-and-a-half times the salary. The Harvard Business School says it can be between three and five times the salary, and up to ten times for very senior or specialist positions.
Obviously, some of the costs can be measured quite easily. Initial recruiting costs, a period of wasted salary and benefits, any training costs, plus a severance package are very real, as is the cost of going through the hiring process all over again. Then there are the costs of management time, lost service, (in some cases) lawsuits – and, of course, lost votes.
All of these can be listed in the “that was very costly” column. But what about the less tangible costs? What price can you put on the damage to your municipality’s name or reputation as an employer? On top of that, if other people from the ‘damaged’ department leave, can you also chalk those costs up to the original “hiring mistake”? Trying to determine the financial implications can make your head spin. If the right person had been hired in the first place, what impact might that person have had from the beginning, and how much better off might you be now?
Hiring the wrong person is a mistake that happens all too easily and all too often. These mistakes can happen for a number of reasons. Everything from poorly completed reference checking (references that would verify both experience and skill sets), to a disregard for personality, as well as a candidate’s attitude, skills, and knowledge (to determine cultural fit), can contribute to a faulty decision. In the majority of cases, a straightforward investment in the recruitment process is enough to avoid a potential disaster. This is one reason why we created the A.S.K. Selection Tool™
Often overlooked is the fact that people are an asset to a municipality, just like an IT system or road grader. Nonetheless, even though many municipalities cheerfully use the phrase “our people are our greatest asset”, they don’t cheerfully invest in a hiring process in the same way they would for road equipment, or even training for existing staff.
I know a Municipal Director of Finance who made the following comment: “I would never dream of spending $400,000 of my city’s money on, let’s say equipment for the city, without having numerous meetings. I’d want to check with the stakeholders to outline the reasons for the expenditure, the process of how the money will be spent, and the metrics associated with the outcome. But, with recruiting, where it’s just assumed that our expenditure is just the cost of an ad we don’t give it any thought. We just say we have a job opening – go fill it. I won’t ever do this again. The reality is a wrong hire can cost us a fortune.”
Of course, there is a cost to retain a professional recruiter like Ravenhill Group … but before you decide to throw an ad in the paper and do it yourself, you really need to ask yourself: “What is the true cost of hiring the wrong person?”
YOU DO THE MATH
Take a moment and think about a “hiring mistake” your municipality has made. I have provided a brief list of both tangible and intangible factors that affect the cost of making a bad hiring decision. As you go through the list try to estimate the cost of each factor, and then add it all up. The factors used are as follows:
Tangible factors: recruiting costs such as fees and advertising, salary, benefits, management time, training costs, overhead, lost productivity and lawsuits.
Intangible factors: damaged reputation, loss of goodwill, low staff morale, turnover, loss of other qualified candidates, unfinished municipal projects and reduced productivity,
Well, it is criminal. To waste taxpayer dollars on advertising has the highest potential of attracting the unhappy and the unemployed…. If that works for you fill your hat!
For those who think that the fees of a professional recruiter aren’t worth it have a look at this Hiring Mistake Calculator. I think you’ll change your mind in a hurry! When you do, why not give us a call! 1-888-447-5910.