Jeff Lipschultz’s Blog

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Why Use a Recruiter: Part I – The Cost of a Bad Hire

Whether internal or external, recruiters bring value to a difficult process of finding the best talent for an open position in a company.  Granted, if a role has countless, very qualified candidates at the door, random luck will suffice.  However, for many roles, careful screening of potential candidates is required to ensure the best fit for the job is hired. Taking shortcuts can lead to settling for the best of what may be a “B-list” of candidates.  Sometimes, employers think the candidates who apply for their open position on a job board are the best possible candidates.  A good recruiter can prove this wrong time and time again.  Sometimes the best candidates are not even looking for a change (until it is presented to them).

One of the obvious problems associated with hiring a “less-than-optimal” employee is the risk of an eventual mismatch and having to let go of the employee in the first 90 to 180 days (by the way, good recruiters replace their hired candidates if this is determined early on).  There are many costs related to a bad hiring decision–many companies have unique situations that contribute even more to the wasted time and money.  Zappos CEO Tony Hsieh once estimated bad hires had cost the company “well over $100 million.” In general, the U.S. Department of Labor estimates the price of a bad hire to be at least 30% of the employee’s annual salary. 

The more influential the role, the bigger the cost might be.  What about hiring a new Sales and Marketing Director?  During the hiring process, the company is losing potential revenue.  Once hired, the new Director must get up to speed, learn the products and approach, start down the road of getting productivity within the team, and then finally start to concretely contribute to the bottom line (hopefully).  If things don’t work out, and the company has to start all over again, imagine how much money has been lost in unrealized revenue.  This doesn’t even include the other employees’ time in training the new-hire, setting up benefits and payroll, and other tangible activities.

Taking this a step further, how does firing employees impact the rest of the team.  Employees start to wonder if they are next, or if they’ll ever have a boss or peer that will be around longer than 90 days.  This assumes the “bad apple” has not rubbed off on others, perhaps telling stories about how messed up the company is compared to other places they have worked.  This can lead to a downward spiral, snowball effect wrapped into one, along with some serious morale issues.  This is just the internal effects.  A bad hire can also sour relationships between the company and its customers (potentially leading to more lost revenue, legal issues, or even worse, a negatively impacted reputation in the marketplace).

Good companies tend to give poor performers a chance to rebound.  After all, maybe some of the problem is due to the company’s training practices or just bad timing.  Performance reviews and coaching requires time and energy beyond the normal training.  Time that could be spent working on the regular day-to-day issues.  Worst case, these leaders have to deal with micromanaging and potentially, disciplinary actions.  If this pattern of bad hiring decisions continues, the decision-maker’s reputation may quickly become tarnished, too.

Other non-recoverable, tangible costs include relocation allowances, referral bonuses, unemployment insurance withholding, and sign-on bonuses.  A huge, non-tangible cost includes a newer concept, “Employer Branding.”  Actually, the idea is not new–the term is.  People have checked into company’s reputations long before there was Glass Door.  Simply by asking their network, potential candidates can see if an employer is worth the trouble before even applying for a position (or saying yes to a recruiter’s request to interview).  Once a company’s reputation is blemished in this area, it can be very hard to attract good talent for a long time.  Then the likelihood of hiring B-list candidates becomes even higher, and the whole cycle starts again.  A little scary, actually.  Rate of turnover or average tenure are among the more popular questions recruiters are asked.  People want a good salary, but they want stability even more (along with opportunity for growth). 

The cost of a bad hire has so many aspects, it is hard to get an accurate measure of its impact.  And again, it does depend on the role and span of responsibility.  However, much of what’s been discussed effect all companies when they do not hire the best candidate.  The more the process is focused on quality, the more likely the best will be hired.  Often times, a third-party can be the difference.  Someone who will put in the time to present a short list of great candidates and guard against hiring those who only claim to be a good fit.  A good recruiter also can take some of the subjectivity out of the process–their reputation is on the line every time they present a candidate.  They don’t want to fail.  A really good recruiter can also help with the interviewing and selection process the company is using.  This focus on quality can help a company avoid the cost of a bad hire, but also allow their hiring decisions to pay dividends for a long time.

June 13, 2018 Posted by | Candidate Selection, General Musings, Management 101, Working with Recruiters | Leave a comment

Why You Should Know About "The Rise of the Creative Class"

This guest post is contributed by Angela Martin, who writes on the topics of Job Search Web sites. She welcomes your comments through email:

So you may be on the job hunt right now, or perhaps you already have a job and you’re considering switching careers. Now as all of us who are hyper-connected to the Internet know, there’s a glut of career advice tips out there, and they all promise that if you follow the advice, you’ll land that job immediately. Of course some pieces of advice are better than others, some are given by recruiting experts, like here at Jeff Lipschutz’s Blog, and some by people who may just be unemployed bloggers themselves.

What I propose to discuss is not any specific “trick of the trade” that will supposedly net you a paid gig, but rather a current trend in economic development that demonstrates the future direction that jobs will take in America and arguably around the world. Being aware of this trend, I think, will be helpful in understanding the subtle shifts in attitude that many in business are taking toward hiring. Richard Florida, an economist and social scientist, wrote about this particularly theory in a book called “The Rise of the Creative Class.” He also wrote an accompanying article for the Washington Monthly that previews this theory.

To sum up Florida’s ideas, basically, what typifies the creative class is knowledge and, as the name implies, creativity. Florida believes that the best jobs will be taken by those in the creative class. The “Super-Creative Core” is the smallest but most important of the group, and it is comprised of individuals who “fully engage in the creative process,” and along with “problem-solving…their work may entail problem-finding.” This core group of creative people can be found in a wide variety of fields including engineering, education, research, and computer programming.

The secondary group that comprises the creative class is what Florida terms “Creative Professionals,” and these people, too, encompass a broad range of specialty fields, like business and finance, law, healthcare, and education. The two groups together form a discrete entity of people who are driving economic development and are generally looking for work in “creative” cities that appeal to their lifestyles. In Texas, the state’s three major metropolitan areas—Dallas, Houston, and Austin–all make the cut for the top ten cities that have the conditions needed to satisfy this growing class.

But what does Florida’s theory of the creative class have to do with a typical professional’s job search, and ultimately, the recruiting process in general? Well, Florida proposes that recruiting strategies will change in order to attract this creative class. Gone will be the days of static interviews. Now, recruiters will increasingly be trying to gauge creative capacity, to understand what makes each candidate really tick, and what he or she can do for the company that will be innovative and forward-thinking. Thus, something to think about in your own job search is to not only reflect on what you have already accomplished, but what you can accomplish in the future in creative, unusual ways.

April 27, 2010 Posted by | Candidate Selection, Careers, Guest Post, Job Search | Leave a comment

How Do Your Values Affect Your Job Selection?

Candidates have all kinds of reasons to NOT pursue certain companies or job opportunities.  I’ve heard plenty of them.  “I don’t want to work on a PC. I need better benefits.  I can’t work in a cubicle farm.”

One of the more unique reasons for turning away an opportunity is Personal Values.  Sometimes there is something the company does or has as policy that leads candidates to reject job offers.  This is a touchy subject for employers to deal with, but one they should address if they see trends in the recruiting efforts.

I recently shared a survey on this topic on AOL/emurse.  Take a look and be sure to vote, too.  Please feel free to comment on this post if you have any good stories on this topic.

Article: Do Values Have Value in Your Job Selection?

April 15, 2010 Posted by | AOL article, Candidate Selection, General Musings, Job Search | Leave a comment

The Interview is Done–Will the Phone Ring?

When the phone doesn’t ring within 24 hours of an interview, many job candidates start to assume they didn’t get the job.  The waiting game is worse than the interview itself for some.

Read what to do and NOT do during this stage in process in my latest article:  Post-Interview Waiting Game.

November 9, 2009 Posted by | Candidate Selection, Interviewing 101, Job Search, article, Video, Working with Recruiters | 2 Comments

Can You Go The Distance?

Collaborative, creative, team player.  Self-motivated, quick-learner, top communicator.  Do these terms describe you?  Well, they should because apparently they describe just about everyone based on the resumes I’ve seen.  For certain, these terms are not original.  While discussing your talents within a resume or interview, you need to convey you possess these attributes.  However, job seekers should keep in mind these are not enough.

There is one attribute I don’t hear much about from candidates that I think may be more important than the others: ENDURANCE.  As an avid cyclist, this word comes up often for me, especially around the discussion of long-distance rides and races. 

In the working world, what connotations come to mind?  If an employee has strong “endurance,” he or she typically:

  • Do not shy away from tough assignments and gets them done on time
  • Is politically savvy and can manage through controversy
  • Can set action plans in place that are achievable (often times with limited resources)
  • Leverages constructive criticism to make themselves better
  • Sticks around for a while and looks to get promoted from within
  • Does not get bored easily
  • Takes few sick daysturtle

I’m sure the list goes on and on.  As employers look to bolster their teams, they want strong contributors.  All the common qualities mentioned at the top are important, but frankly, they are expectations of every candidate.

Endurance is something that is proven and displayed through solid examples.  The best examples relate how an employee rose above the rest to accomplish big things during tough times.  In my opinion, endurance is a differentiator.  It enables you to go the distance.


Related posts:

Resume Writers- Keep Your Plate Out of the Boiler

October 27, 2009 Posted by | Candidate Selection, General Musings, Interviewing 101, Resume Writing | 13 Comments

Double Duty for Hiring Managers


My wife has been in China for a week and I’ve been playing the role of Mom AND Dad for our girls.  Stereotypes aside, I’ll just say I’m having to be the good cop and bad cop.  Sweet and sour.  There are many who do this full-time and I admire them.

This situation reminds me that hiring managers have to remember to pull double-duty during the interview process.  A hiring manager should be critical during the interview and ask pertinent, direct questions.  At the same time, the manager needs to realize the (best) candidates are also interviewing them.  Managers must present themselves in a professional manner, but should also let their true personality show.  Being a real person during the interview gives the candidate a chance to evaluate how well they could work with that manager.  Being open to questions about management style, work environment, and expectations is a good start.

A relevant example comes from a friend of mine who was interviewing recently.  She interviewed with a manager who asked all types of off-the-wall questions and pushed hard for more if he thought she was giving “pat answers.”  Later in the interview, he explained why he asked certain questions and gave feedback on her answers.  He went on to say how he is easy to work for, but nonetheless, my friend had a hard time picturing a good working relationship.  Most likely, she was not the right fit for the job.  The right person for the role might have been someone who enjoys frequent debates or a fever pitch work environment.

As a part of being the “good cop” in the process, it is also important to convey the benefits of working for the company.  Even in an economy where there are many candidates available for every posting, managers still have to present their job as a great opportunity.  After all, the best candidates for the job may have other options.  More information on communication strategy for enticing the candidate to work for your company is available in a previous post:  Have You Wooed Lately?

Acting as Mom and Dad boils down to simply being a good parent.  And acting as an interviewer and interviewee during this process is a part of being a good manager.

Got more advice on how to be a good interviewer? Leave a comment below.

October 14, 2009 Posted by | Candidate Selection, Management 101 | 6 Comments

There’s No Mystery: The Best Candidates Get Picked

Part of how recruiters earn their fee is by determining who are the best candidates for the client’s job opening.  Some candidates may feel a little put out when they are not selected to be presented to a client. 

Understanding what qualifies as the best candidate for a job may dispel any myths or mysteries about the selection process recruiters use.  An article I’ve written for gives an objective description and some guidelines for job seekers.

Click here to read the article.  Please share your comments/questions using this blog post.

October 5, 2009 Posted by | Candidate Selection, article, Working with Recruiters | 7 Comments

The Importance of a Consistent Message

Whether you are searching for a job or searching for the best candidate, a consistent message needs to be communicated throughout the entire candidate selection process.  For both parties, the message can center around the Five W’s:

  • who you are
  • what you seek in an employer or employee
  • where you are in your career or hiring process
  • when you expect to make a decision
  • why you are looking for a job or candidate
  • (and even how: how you expect to arrive at a decision)

For example, some who’s and what’s for both:

Candidate:  I am an experienced marketing executive looking to lead a team marketing custom software.

Company:  We are a Fortune1000 software development company looking for a marketing executive with 15+ years software marketing experience, an MBA, and five years experience leading others.talkdirectly

Sounds simple, doesn’t it?  You might be surprised how often both sides veer of the path of delivering a consistent message. 

The Candidate’s Message:

Candidates need to follow the advice I’ve written for interviewing. Specifically, they need to understand what the company is looking for and communicate the experiences and skills that tie directly to those requirements.  An inconsistent message starts to form when a candidate starts layering in all the other things they might be interested in or relating skill sets that the company does not need.  Mentioning all these things dilutes the core message.

Throughout the interview, all the interview responses and examples provided need to tie back to the core message.  By doing so, a candidate will reinforce the impression that has started to form of what they are all about.  The more examples provided, the stronger the message gets.

The Company’s Message:

On the company side, the consistent message can get diluted when there are a series of interviewers who have not been prepared adequately.  Each interviewer should be asking questions tied to the same requirements.  Also, when asked, “what is the company looking for in a candidate,” every interviewer should answer the question almost identically.  Granted, direct reports to the position may have different needs than the supervisor to the position.  However, all these answers should be agreed upon up front.

Another area of concern is the messaging on what the company is all about.  If one employee says the company’s core competence or mission is X and another says Y, what is a candidate to think?

Even little things like “where are you in the process?” can be a tripping point.  If one interviewer says, “we just started looking at candidates” and another says, “we’re close to picking three finalists,” what is the candidate going to think?  Although, both statements could be true, it doesn’t sound very consistent.

Bottom Line:

Just like in traditional marketing, when the message is not consistent across all sources, the receivers of the information lose sight of the intended message.  A little preparation and strategy can go a long way (on both sides) to ensure both clearly communicate what they are looking for and what they are all about.

September 1, 2009 Posted by | Candidate Selection, Interviewing 101 | 13 Comments

Have You Wooed Lately?

A-List candidates want to work for A-List companies.  And, they want to be treated like an A-List candidate.  As companies interview and identify the best candidate for the job, many act as if they are the only (or best) opportunity the A-List candidate has. This is counterintuitive.  A-List candidates typically have more than one opportunity and often have a hard time choosing between them.  The choice sometimes boils down to the level of wooing!

So what is professional wooing, anyway?  Just like selling a product to customers, hiring managers/interviewers need to sell the company to candidates, especially the A-List.  For great companies, this can be easy.  They just need to strategically communicate what makes them great.  Like most things, it comes down to execution.  Here are some of the details on communicating a company’s “greatness” and wooing the candidate during the interviewing process.

What to communicate?

What differentiates your company from the rest?  What do you offer that is part of their list of “wants” for their next job?  A-List candidates want autonomy, challenge, education, strong growth potential (for themselves and their company), and respect.  Interviewers must listen carefully when A-List candidates share what has made them successful before.  What was it about their past environments that propelled them to greatness?  Listen for aspects that describe the perfect “fit” for the candidate.

When to communicate?

Don’t wait until the end of the interviewing process to share all these winning qualities.  You need to be doing it all along.  Even in early stage interviews, when candidates ask about the company, you should be prepared to share all the aspects of the company that would be appealing to the candidate.  During the offer-to-acceptance period, realize that counteroffers from current companies are possible and stay in tune with the candidate’s feedback.  Even after acceptance, be sure to keep the new employee upbeat about starting the new job (before starting, upon starting, and for weeks after starting).

Side note: Outside of the interviewing process, many of the best managers are even wooing candidates when they do not have an open job.  They talk to A-List candidates all year long anticipating following up with them later.  Others leverage Social Media to communicate about their Employer Brand.

To whom to communicate?

You need to provide information to anyone who is part of the candidate’s decision-making process.  At times, this might be indirect by asking what questions a spouse or parent might have.  At other times, it might be chauffeuring the candidate and his family around a new town or providing a real estate agent.  The key is to ask questions to the candidate that probe into the lingering issues that are being discussed at home.

Who is to communicate?

In a word: everyone.  Make sure the messaging is consistent.  All interviewers should be appraised of what is important to share with an A-List candidate.  Each will have their own way or perspective communicating the selling points which will build reputation equity, a consistent image, and excitement.  All levels of the organization should be involved.  A-List candidates like talking with the executives and typically have great questions for them.

How to communicate?

Don’t make it a hard sell.  Many companies shy away from this process because they don’t want to appear to eager or are not comfortable pushing too hard.  If done right, these are not issues.  If you are building the impression of the company one brick at a time throughout the whole process, you don’t have to build the whole house at the very end.  Be matter-of-fact about the information you are sharing.  Weave it into conversations along the way as you hear the triggers in the questions that are asked.  When they talk about their goals and vision, mention the company goals and vision.  When they talk about their favorite job experiences, share some of yours with your company. 

Sometimes, you will need to be more direct.  If you sense there is a concern the candidate is not sharing, ask if they have any hesitations about joining the team.  Sometimes just asking, “What about this company and job attracted you to interview with us?” will prompt a great deal of conversation.

Why to communicate?

As stated above, you can never assume a candidate will take your offer.  You need to act as if you are one of three choices for the candidate.  Even if your company is truly fun to work for, many may not know this.  If you are not communicating your Employer Brand through Social Media and other methods, how would they know?  It is your job to share this in a unique, conversational way.  By the way, do not assume economic conditions alter the level of communication required.  This is always a requirement.  At times, this effort can even mitigate the chances of getting into a salary negotiation.

Often the interviewing process is compared to dating, and why not?  Both sides are getting to know each other over the course of a few meetings by asking questions and learning about each other.  Both sides go back to their peers and influencers to seek approval of the other.  Both sides compare the other to an ideal benchmark.

So if only one side is doing the wooing, chances are the romance is not going to last.

April 30, 2009 Posted by | Candidate Selection, Management 101 | 14 Comments

Keep High Standards for Selecting Employees and Employers

high jump We tell ourselves we are looking for the best.  The best candidate.  The best job.  The best fit.  But often times the process gets compromised along the way and we settle for less.  For employers, it might be the timeline, the looming workload, lack of patience…or quality candidates.  For job seekers, it might be desperation to move on to a new opportunity or fooling themselves about the true fit for a long term relationship.  No matter the reason, the reality is neither party should compromise the high standard.

Having a high standard makes us all better.  The benchmark of quality or ability should stay in place regardless of circumstances.  Even when it becomes tiresome.  My freshman year of college, I learned to play racquetball by playing my roommate who had been playing for years.  I would lose each game by 16 to 20 points every week.  This went on for months–halfway into sophomore year, in fact.  But during that time, my ability got better and the score got closer and closer.  Until one day, I won a game.  After that, all our games were close.  My friend Tim was the benchmark and he never wavered from giving me the same challenge each week.  There were several lessons learned from this experience:  never give up; playing someone better than you makes you better; and stay true to a high standard–aim high!

So how do we ensure as employers and job seekers we keep our standards consistently high during the employment process?

Employers must do the following:

  • First, establish a true job description that is based on the needs of the organization.  Be specific.  Have clear goals.
  • Dig deep for candidates.  Don’t rely on one source, whether it be internal, networks, or recruiters.  Although, once you find a good source, sustain it so it will be there whenever you need it.
  • Be critical.  Although a candidate might be good at a lot of things, make sure they are good at the “right” things.
  • “Fit” is not just ability, it includes cultural/organizational aspects.  Will the candidate get along with the team and follow well-established, proven processes?  Or will they be too much of a maverick or “high-maintenance?”
  • Have a consistent interviewing process that provides objective evaluations.  When holding to a process, it is harder to fall back to “gut decisions.”
  • Know how to seal the deal.  Just the other day, a friend told me a story about his employer bringing a candidate in from out of town and having no plan to take the A-List candidate to dinner or tour the city.  When employers lose the #1 candidate, they at times settle for #2 (who may be a far cry from #1).

Job seekers must do the following:

  • Before interviewing, make several lists:
    • your attributes you want to use in your next job
    • the best elements of all the roles you’ve enjoyed in the past
    • the requirements for the next job including location, salary, level of responsibility/decision-making, visibility, day-to-day tasks, and others
    • what is missing is your current (or past) job that you really need for personal job satisfaction
  • If necessary, consult a job coach to learn more about yourself and your qualifications.
  • Next, combine all these lists in a job description that you should pursue. Set priorities for the elements of the job description.  Determine what are deal-breakers versus bonuses.
  • Although it may be hard to stay true to that vision (as it make take time to find it) accept trade-offs based on your pre-set priorities.  Don’t rationalize.
  • Ask probing questions to interviewers that clarify the job description they are offering versus what you want.  Make sure you meet a cross-section of the organization to solidify your impressions of the company.
  • Do your homework.  Find out everything you can about the hiring company leveraging Social Media channels, financial data, and personal networks.

We all know the cost of a bad hire.  For employers, it can be a daunting task to find a new employee after a recent-hire leaves due to a bad hiring decision.  For job seekers, a short tenure at a company listed on the resume prompts questions and doubt. 

Even if it takes 25 to 50% longer to find the right fit, both parties need to hold themselves accountable to a high standard for the decision.  When this happens, we all win.  We might be exhausted when it’s over, like playing my buddy Tim in racquetball.  But ultimately, we will find it well worth the effort.

April 14, 2009 Posted by | Candidate Selection, Interviewing 101, Job Search, Management 101 | 10 Comments