The recruitment process is extremely expensive and time-consuming.
If an organization selects the wrong candidate then the potential
costs are extremely high. No matter how unsuitable a person may
be, once they have been employed employment legislation makes it
both expensive and risky for organizations to fire people.
Employee rights and the real risk of expensive litigation make it
a vital to choose the right candidate at the outset.
Resume’s and application forms show a work history, and whilst
the places and dates of employment are usually accurate, there is
a strong motivation to exaggerate responsibilities and
achievements. The exact details of which are difficult for the
potential employer to check. There is also the problem of a
growing industry in both books and online businesses which offer
‘help’ in writing the perfect resume. Whilst candidates who have
gone too far in talking-up their achievements and abilities will
usually be caught out at the interview stage, this is a very
expensive and time consuming process for the organization which is
recruiting.
There is some debate as to whether educational achievements have
become debased in the past few years. However, even if this
argument is ignored, the number of courses and qualifications has
grown rapidly in recent years and it is not always clear what a
particular qualification means in terms of abilities.
The interview process has shortcomings since the candidate needs
only to prepare for a short and relatively predictable series of
questions. It is also fairly easy for a candidate to appear
good-natured, motivated and interested for the duration of the
interview. There has also been a significant amount of research
over recent years, which has shown clearly that interviews alone
are an unreliable way of selecting the best candidates.
Interviewer bias can act against the interests of the recruiting
organization by excluding the most capable candidate on entirely
spurious grounds. If the bias involves gender, ethnicity, or
sexual-orientation and this can be demonstrated, then the
organization will suffer adverse publicity and possibly legal
penalties.
References are notoriously unreliable as previous employers have
nothing to gain by warning a potential employer of an unsuitable
candidate. They may be both pleased to lose the individual from
their own organization and afraid of legal redress if they provide
an honest appraisal.
The Cost of Selection Errors
The costs of selection errors can be broken down under a high
number of different headings. Poor selection for example, more
often means high turnover which in turn increases recruitment
costs. Recruitment costs can vary between 10% of salary for more
junior members of staff to 40% for senior managers.
Training of staff is becoming increasingly costly: the cost of
training just one air traffic controller nears $200,000. In
certain jobs like fighter pilots, costs have been estimated at
over a million dollars to train each one.
Poor selection will also lead to costs caused by incompetence and
lost opportunity. Incompetence produces pressure and stress on the
individual as well as on work colleagues, loss of profits and loss
of future business clients. The overall cost of poor selection is
incalculable but almost certainly equals on average, the annual
salary of the job incumbent – and in many jobs where severance pay
is given it will be far greater than this.
Against the enormous costs of poor selection, the costs of a
professionally delivered testing or assessment service is
relatively inexpensive with occupational tests given individually
or to groups of 20 or more candidates, at one ‘sitting’. The
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