FAIRBANKS - Is it any wonder that movie producers hire big name actors for starring roles? In sports, why would a team spend millions of dollars and give up the ability to bring on multiple new players just to hire one star? The entertainment and sports industries inherently understand that hiring top talent is an investment and that the goal of such a move is to increase revenue beyond the cost of hire.
Too often recruiting and hiring is seen as a line item expense. It costs time, training, there may be the expense of travel to either bring a candidate to your organization or to send a representative to an event outside. There are advertising costs, salaries, benefits, and a variety of other expenses that all rolled up account to a very expensive transaction just to bring one person on board. But what impact does that one person have on your organization.
Hiring is so much more than a transaction and the sum talent of the people within your company, are greater than their individual parts. Because the importance of hiring the right people has a direct impact on your organization’s bottom line, doesn’t it make more sense to view the performance of your recruiting through a return on investment model?
Here are five ways your hiring process can impact your revenue:
1. High performers increase revenue.
If you develop a hiring system that identifies and allows you to hire individuals who are top performers in their field rather than average performers, your overall production and revenues will increase. Likewise, if you only hire average or below average performers, you can expect your overall production and revenues to be below average. While this concept seems obvious, does your company have a process to identify high performers?
2. Focus on hiring individuals who are strong creative thinkers and problem-solvers.
Innovative companies like Apple, Yahoo and Facebook have ways to identify and hire individuals with creative, problem-solving minds that develop new and exciting products and services. These companies have excelled in-part because they hire so many of this type of people that they are able to get more new products to market more quickly.
3. Hire top performers who stay longer.
The days of lifelong employment are at an end. However, the longer you can keep top performers in your organization, the more they will produce for you. An effective retention program is not only an important part of your recruiting process, it is essential to increasing your revenue. What are you doing to keep your top-performers on your team? Hint: Have you asked them?
4. Hire top talent away from your competitor.
In a competitive marketplace and in a war for talent, if your organization has a strong hiring process, you can find the creative and top-performers you need at your competition. In addition to increasing revenue, you also gain new ideas and knowledge in your industry. How many of your own employees have been hired away by your competition?
5. Do not focus your hiring on compensation.
Many hiring managers assume that top performers require top salaries. Salary is typically the largest part of a compensation package, but often the overall package is more important than the salary alone. What benefits, perks, paid time off, bonuses, etc. makes your organization more attractive? What about the culture and the company’s reputation? Hiring top talent and giving them opportunities to earn more perks through their performance increases revenue.
The initial costs that go into recruiting top performers and creative thinkers into your organizations will pale in comparison to the revenue and productivity they bring to your organization. The Miami Heat understood this concept when they recruited LeBron James from Cleveland and put together a team of exceptional players to win a national championship. James could probably have earned more staying with the Cavaliers, but there was something he wanted more that he didn’t see possible if he stayed in the same location.
Do you plan on investing in your recruiting next year? Do you have a way of measuring the return on your investment? If you found a goldmine while out hiking in the wilderness that no one else knew about, would you not go and spent whatever it cost to buy the mineral rights to the land knowing it would produce a much greater return than what you spent? How many gold mines have you let walk past your door because it cost too much?
Mike Calvin is an Employment Consultant with 1st Fruits Consulting and helps organizations with their hiring needs including full life-cycle recruiting, candidate sourcing, selection process, interviewing and assessments, and win-win negotiating. Based in North Pole, AK Mike can be contacted by email at email@example.com. This column is brought to you as a public service by the UAF Community and Technical College Department of Applied Business.