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Why Do 50 Percent of All New Hires Fail and How to Avoid It?

Yeah, you read that right! It’s a staggering number and is probably the result of first recruiting and first philosophy fire.

Often named The rate of failure exists from owners, supervisors, and hourly employees at all rates according to the report. To get a better idea of what he’s talking about, take a look at some sad stats below:

  • After 18 months, 46 percent of all new hires fail

  •  50 percent of all hourly workers leave or are fired within the first six months

  • Around 40% and 60% of all new hires run by management fail within 18 months

  • Compared to 50% of all new executive hires fail within 18 months

  • One in five new hires, or 19 percent, can be considered an unambiguous achievement

Recruitment not driven by data fails

In a data-driven environment, when it comes to a bad hire, it is hard to imagine that there is no cost calculation. It is also shocking, however, that corporate recruiting is based on assumptions or processes rather than using concepts of process reengineering.

He also notes that over 75 percent of decisions made during the hiring process has been found to be based on intuition. When you read that, it doesn’t sit well because it’s difficult to clearly identify the root cause of not hiring the right candidate without any calculation of the loss.

At present, the hiring process is only changed selectively whenever a major issue occurs, not a complete overhaul from the ground up. But even a restructuring of HR can only be successful if it’s a process powered by the results.

So a dollar amount has to be determined to determine the cost of each poor performer who was recruited. It makes a lot of sense that recruiting is consistently failing because you can’t really know where to go wrong without a solid database to work with.

But it doesn’t end there, because you may also have to deal with high turnover rates associated with the following:

  • No job satisfaction

  • Unfulfilled individual needs

  • Culturally mismatched new hires

  • Poor team dynamics

  • Low motivation to stay at the company

Both these can be attributed directly to intuitive hiring practices. Data analysis can help you identify trends such as when workers are culturally incompatible with the organization.

There will be no formal interviews without proper research that can help predict the results. This really hits the nail on the head as 66% of hiring managers later regret their decisions on recruitment. Furthermore, another 40 percent of newly promoted executives and managers fail within a year and a half of starting the job.

Companies must identify the recruiting issue first

Each job is relative to the company, to the position’s responsibilities and to many other variables. HR departments, therefore, need to come together to determine what a hiring failure actually means and which definition best suits the firm.

Some of the variables included in this description may include terminations, turnover, work performance, and training. Some other considerations may include the time required to meet minimum standards of profitability, salary costs, legal issues, movement, diversity, and satisfaction of management.

Although measuring the recruiting failure rates is important, measuring the work performance of new recruits is also important. This will also determine the quality of every new employee who works within the company. So if the company’s aim is to increase the effect of hiring, it will also become important to quantify performers who are above average.

Even though we may have become used to the chaos caused by high turnover rates, it doesn’t have to be this way because a simple change in perspective will make the difference.