Finding the perfect employee for the job is rarely easy. Even though IT jobs are projected to grow 13 percent from 2016 to 2026 (faster than average for all other occupations), filling those jobs comes at a cost.
According to the Society for Human Resource Management’s (SHRM) Human Capital Benchmarking Report:
- The average cost-per-hire for companies is $4,129
- The average time it takes to fill a position is 42 days
- The average employee tenure is eight years
- The annual turnover rate is 19%
These numbers consider all hires, although the cost-per-hire for new IT hires is likely much higher and they take longer to find. SHRM found talent retention for tech companies is the most volatile, with the average IT employee tenure being estimated at only three years.
This is concerning when you consider how absolutely necessary IT jobs are to the survival of a company. Whether or not an organization is considered a “technology” company bears no weight. Every company requires technology to compete, therefore likely needs to hire one or more IT personnel to manage the infrastructure. For those with a mature IT department keeping those key positions filled can be like whack-a-mole.
New hires are an investment – a significant one at that. It may sound simple to go to Indeed, LinkedIn, Glassdoor or other job sites to find an IT pro, or to hire a staffing company to do some of the work for you, but it often isn’t that simple.
“Given the breadth and pace of innovation, all signs point to a widening skills gap in many areas and for more types of workers. CompTIA workforce research consistently reports concerns among employers in finding candidates with the right combination of technical and soft skills.”
Breaking Down the Cost
If you’ve never thought through why new hires are so expensive, here’s a simple breakdown of each step required for a single employee. This process involves multiple internal staff, not only the hiring manager. They are all being pulled off of their daily job tasks in order to facilitate the hiring process. The loss in productivity depends on how long the process takes and how many candidates are cycled through the system.
Consider the staff and hours required for each of these standard hiring steps:
- Define the job requirement
- Post and maintain the job opening on social media, website and job boards
- Screen resumes
- Develop pre-screening protocol to weed out on-site interview candidates
- Contact candidates to set up initial phone interview
- Conduct phone interview using pre-screening protocol
- Assess remaining viable candidates
- Contact remaining candidates to schedule onsite interviews with multiple personnel
- Coordinate interviews with multiple personnel
- Prepare for onsite interviews
- Conduct interviews, often multiple days, involving multiple people
- Meet with interviewers to discuss interviews
- Select candidate
- Perform background check and/or drug screen
- Prepare offer
- Communicate offer to candidate
- Negotiate offer
- Begin HR onboarding process
- Train new hire, including scheduling meetings, tours, and shadowing programs
Every one of these steps is necessary, yet have a cost. Getting it right – the first time – is priority number one in order to maximize ROI of each hire.
Hiring Takes Skill
As a hiring manager, whether you decide to do the hiring internally or to pay a staffing company to do it for you depends on how much time and resources you have to throw at it. Keep in mind the importance of hiring the right person for the job. The last thing a hiring manager wants to do is expend all of the time and costs listed above or pay a staffing company, only to realize a few months later that the candidate they thought was an ideal fit was a disastrous dud.
We often consider the skills of the candidate more than we do the skills of the person hiring. Hiring the right person doesn’t start at the candidate level. It begins with the very first step in the hiring process: defining requirements. If the requirements aren’t spot on, that is, detailed and highly specific to the job, you’re either going to waste your time vetting the wrong candidates, or you’re going to misrepresent yourself and hire the wrong person for the job.
Requirements Are Everything
Defining the requirements is perhaps the most important step a hiring manager can take in the hiring process. If you need help pinpointing exactly what you want and don’t want in a candidate, it may be wise to hire a staffing company who can look at the position with fresh eyes and help create the most accurate requirements by asking questions you may not have thought to consider. You know an organization needs help if they have a pattern of hiring talent who leaves or is let go soon after.
Requirements should be used as a weed-out tool, helping to refine the candidate search to only those who truly meet the skills definition and fit into the culture of the company. Cultural fit is just as important as skill fit. Most employees will be required to work on teams. You want to be certain any new hire can not just be on the team, but be an integral part of the team in order to foster true collaboration and synergy. Include cultural requirements in your job requirements definition.
Quality over Quantity
Finding the right person for the job isn’t as easy as posting a job opening on your website or job board. Only 14.9 percent of hires are made from a job board candidate. For skilled IT positions, filling It positions takes much more finesse. Those who know their skills are in high demand won’t necessarily be scouring job boards. They have the luxury of waiting for companies to find them.
This is where staffing companies can shine, yet it is highly dependent on their relationships with industry talent. The best staffing companies will have strong professional relationships with talent, knowing who might be swayed to leave their current employer for a better opportunity and what that opportunity needs to look like.
Sorting through resumes can be a full-time job and many hiring managers prefer to pay experts to do it for them so they can focus on other tasks. All too frequently, staffing companies whittle the list of potential candidates down to 20-30, sending you the resumes of the candidates that generally fit the requirements description. While this may appear to be helpful, it actually creates more work for the hiring manager.
The key to excellent outsourced staffing is to find a company who does 90 percent of the legwork for you, so you only have three to four high-potential candidates to consider and put through the expensive process. Their vetting process should consider skills, personality and cultural fit, as well as career goals and expectations. Aligning these qualities with your requirements and culture will save you significant time and ensure no one is wasting their time interviewing unqualified candidates.
A question to ask a staffing company is, “How many resumes should our company expect to receive for each job position?” If they tell you they will send dozens, RUN. All they are offering you is a glorified resume dump. You aren’t hiring someone to throw resumes over the fence simply for the sake of feeling like they are meeting their contract obligations. They work for you, remember, and you are paying them to make your life easier.
Ask the company what goes into their process of finding the right candidate. From what pool of candidates do they pull? What is their screening process entail? What responsibility do they take for the quality of candidates they send your way? How well do they know the candidates?
Hiring for IT is quite different from hiring for other internal positions. IT skills are in high demand, yet remarkably difficult to find. Investing in a staffing company whose sole focus is IT will give you the best bang for your buck and improve the odds you’ll find that perfect fit in less time with less effort.
