Why Don’t Companies Train Managers How to Hire People?

According to research from talent technology pioneer Hireology, where I have the privilege to serve as CEO, fewer than 10% of organizations invest a single second of time training their managers how to hire people effectively.

That statistic is – and will always be – shocking to me.  I can think of no other single investment that a company can make than to focus on and invest in helping their managers be fantastic at sourcing, screening and onboarding the best possible new team members.  Here are four reasons to make the decision to train the skill of hiring as a core management skill within your company:

People are 70% of your company’s cost structure.  For most organizations, payroll costs consume around 70% of all revenue generated.  Yet, management teams fail to invest anything in training and optimizing strong hiring processes.  This omission is a huge mistake.

Not convinced that the investment in a strong talent acquisition process is a good one?  Consider a simple example with our friends at Acme Incorporated.  Acme, who we’ll say is in the service sector, has a hiring success rate of about 30% across the enterprise; for every one hundred employees they hire, seventy of them will quit on or before their first anniversary.  Plugging in a cost factor of $16,000 per turned hire tells us that turnover is costing this company just north of one million dollars per year for every 100 people it hires in hard costs alone.

Worth investigating, don’t you think?

People are your product.  I don’t care what business you think you’re in.  You’re in the people business, period.

If you’re a manufacturer, it’s people that run your plant and facilities. If you’re a retailer, your people are the key to customer experience in the store. If you make software, you can’t do much without people to code your solution and sell it to the world.  If you’re a restaurant, people cook the guest’s food and help them to enjoy their night out.

If the managers responsible for hiring the right people are out there winging it in interviews, then it’s easy to see why they’re struggling to pick the right people; they’ve never learned how to do it correctly and bad hires are being made as a result. Those bad hires and the sub-par results they generate are now rippling through the organization, impacting everything from production to sales to customer satisfaction. Good hires would have the exact opposite effect, so why aren’t you investing in tools and processes to ensure that your managers have the skills to hire great people?

Great teams are a source of sustainable competitive advantage.  These days, a product or service innovation can be replicated by your competition in near real time. Marketing innovations have a lifespan that’s measured in months, if not weeks. But the right people, working in the right jobs and being managed effectively, deliver a truly differentiated result.

That differentiated result is the asset you’ve created when you invest in helping your managers become experts in the ability to hire and retain top-shelf talent.  Talent acquisition is like any other core, critical business process – it takes time, resources and training to master and scale it.  You can’t build a top-performing business without great people, and you can’t hire and retain great people with a team of managers who have no idea how to hire them.

Great people want to work with other great people.  Raise your hand if you like working for a losing organization full of mediocre (or worse) players.

Didn’t think so.

Top-performing employees tend to be professionally networked with other top-performers, which means that the better your team, the better the likelihood that they refer these A-player contacts to your organization. Additionally, great employees really dislike having to work with a sub-par team or co-worker. It makes their job harder and after a while they begin to wonder whether or not their manager has the skills or presence to upgrade the talent pool.

Every week you wait to focus on skilling up your managers’ abilities to recruit and retain top talent is another week you won’t be leveraging the biggest untapped ROI in your business.