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.

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

New Year’s Resolutions and the Job Search, Part II

A few years ago, I wrote an article for job-hunt.org about New Year’s Resolutions as they pertain to a Job Search. It has become an annual tradition to share it on Social Media every January as the content is still relevant.  This year, a colleague of mine, Jacob Share, took this article a step (or two) forward.  Please have a look at both articles if you’re entering 2018 with sights on a new job!

My original article:  New Year’s Resolutions for Job Seekers

Jacob’s article:  Awesome New Year’s Resolutions Ideas for Job Seekers

January 5, 2018 Posted by | Careers, General Musings, Guest Post, Job Search, Job-Hunt.org article | 1 Comment

Staying Focused Throughout Your Job Search

There is no doubt that finding a new job is hard most of the time.  There are going to be ups and downs and moments when you’re not sure you will ever find the right position.  The key is to remain positive and analyze your process continuously to look for opportunities to refine your approach.  My latest article for job-hunt.org also addresses how to rationally think about the challenges facing you during this important stage in your career.

ArticleStaying On Track and Optimistic in Your Job Search

November 27, 2017 Posted by | General Musings, Interviewing 101, Job Search, Job-Hunt.org article, Personal Branding | 1 Comment

The Graceful Exit

It’s easy to get excited about starting a new job. It is also common to be anxious to leave your current one to get started as soon as possible.  But we all know the expression about never burning down bridges.  Your reputation in the working world, or even your specific industry, can hinge on this old adage.  I cover the specifics on how to ensure you leave your current job in a professional fashion in my latest article for job-hunt.

Article:  How to Gracefully Leave Your Old Job

November 10, 2014 Posted by | Careers, General Musings, Job-Hunt.org article, References | Leave a comment

Counter-Offers Can Be Counterproductive

Once in a while, when a job seeker submits their resignation and offers a two-week’s notice, they get a surprise in return: a counter-offer. Quite frequently this includes a match on salary with the new company and sometimes an increase in responsibility. In this situation, many things can go wrong for all involved.

The Candidate Perspective

I once had a friend go through this experience and he was perplexed as to which path to take. He was the one to instigate a job search process, so I was a little surprised there was even a decision to be made. After all, once you start a job search, it’s likely you have already decided, for whatever reason, that it is time to go. The counter-offer covered both money and responsibility. Even long-term growth potential. My friend had a long list of concerns, but in the end, I asked a simple question: “When you drive to work each day, what is it you want to do when you get there?”

In other words, no two jobs or companies are exactly the same. When the current company offers you reasons to stay, you need to remind yourself why you wanted to leave. Will those issues be addressed? Even if there are promises to address them, will they be able to live up to their intentions? Does past performance indicate they are true to their word? Without an employment contract, their word is all you have.

Just remember, money and title are nice. But 40-70+ hours of work per week is a long time to spend doing something (or being somewhere) you don’t enjoy. Most people want to accomplish something professionally. Be sure to consider which opportunity truly offers this chance?

The Current Employer Perspective

No one likes to lose good employees. Especially if we have groomed them, trained them, and depended on them for a long time. However, when an employee makes the hard decision to leave, you must accept you missed the boat somewhere and didn’t address the issues along the way. Trying to band-aid the situation by keeping them on board will likely prove to be temporary. The joy of a raise and new title is short-lived in the working world. Six months later, they will realize they still want to move on.

Sometimes the boss offers a counter just to protect their own reputation. Are you the first to leave the group in a while, or part of a series of folks leaving? Is the timing really bad for the company? You need to assess why the offer is being presented. Is it simply because you are too good to lose? And if so, why did it take a resignation to prompt this kind of action?

If you accept the counter, you should realize that some companies will start a search for a replacement anticipating your future departure. This is a disastrous situation as you may be potentially fired (or overlooked for future promotions). Instead of people moving on and new people moving in allowing for growth for all involved, the situation turns stagnant, and sometimes unfriendly.

The New Employer Perspective

No company has time to waste in a job search. They do not like interviewing candidates who turn out to be just “kicking the tires” and “seeing what’s out there.” They want to meet candidates who are ready to join their team, not consider it.

When a candidate rejects an offer to stay where they are, the relationship between the two is strained or severed. In essence, the company feels the candidate was not honest during the process.This impression is all they remember (and likely marked in their records/database).

If you are only curious about opportunities at a company, take one of their current (or past) employees out to lunch so you can get a true perspective of what it’s like to work there.

Bottom Line

When considering whether you want to leave, make a sound decision. Ask yourself right at the start, “If my company countered an equal offer, would I consider it? And why?” You may just need to have a heart-to-heart with your boss and ask how you can improve your current situation through increased responsibility or redirection of your role. If you do decide to leave, don’t look back unless you’re absolutely certain your old job will become better than the new job.

January 14, 2014 Posted by | Careers, General Musings, Working with Recruiters | Leave a comment

Are You a Scary Candidate?

When conducting a job search, your #1 Goal is to present yourself as an ideal candidate for as many job openings as possible.  You always should present yourself in a positive way.  Common sense, I know.  So it is a bit shocking at times to see how many job seekers can do the opposite.  Often they are not even aware it is happening and they may never find out.  In my latest article for Job-Hunt.org (who just revamped their Web site by the way), I discuss several ways you can unintentionally scare off recruiters (and hiring managers/HR personnel) including:

  • A Horrible Resume
  • Job Hopping
  • Ambivalence
  • Bad Social Media Image
  • Lack of Professionalism
  • Personal Agendas
  • Ignoring Advice or Not Following Directions
  • Dishonesty

Article:  How to Scare Recruiters Away

June 24, 2013 Posted by | General Musings, Interviewing 101, Job Search, Job-Hunt.org article, Personal Branding, Resume Writing, Social Media, Working with Recruiters | Leave a comment

Networking Starts in Grade School

Every smart job seeker knows the value of networking to help the process along.  Not every job seeker realizes their network has a life of its own.  It can be what cinches the deal or sends you packing, too.  My latest article for job-hunt.org has a story to illustrate this, and also pointers on “cleansing your network reputation.”  As always, if you have thoughts on the subject, share them within this post.

Article:  Networking Since Grade School? Yes!

August 15, 2012 Posted by | General Musings, Job Search, Job-Hunt.org article, Personal Branding, Social Media | Leave a comment

Tweet Your Way to a Sweet Job

Self Magazine interviewed me a little while ago for thoughts on Twitter and the Job Search.  They picked the most salient point of our discussion and included it in the August 2012 article.  My quote:

Keep your Tweets 80 percent positive, suggests Jeff Lipschultz, cofounder of recruiting firm A-List Solutions in Southlake, Texas. “You’re allowed to complain about a bad restaurant experience or the terrible weather every once in a while, but hiring managers want someone who will enhance a company’s culture,” Lipschultz says. “Complainers don’t.”

For the online version of this article, click this link.

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August 3, 2012 Posted by | General Musings, Job Search, Social Media | Leave a comment

Don’t Tweet Your Way Out of a Job

twitter picRecently, I was interviewed by SELF magazine regarding job seekers losing credibility through their behaviors on Social Media, namely  Twitter.  Although it’s been discussed by many, including me, it seems there’s still a need to counsel people on how to maintain a professional image within the Social Media world.  With this in mind, I wrote a short article on the subject for my friends at Job-Hunt.  See if you agree with my thoughts.  Either way, feel free to leave comments on this blog.

And the SELF article should be in the August publication (on the shelves and online in mid-July)–we’ll see how much of my interview makes it into the article.

Article:  The Impact of Social Media on Recruiters and Your Next Employer

June 20, 2012 Posted by | General Musings, Job-Hunt.org article, Social Media | Leave a comment

Looking at a Resume through Recruiter’s Eyes

Clearly, there is no end to amount of advice offered on resume writing.  However, every day I read resumes that have glaring mistakes.  Not simply grammar or spelling.  There are resume pitfalls that can cause doubt to arise about you.  It may seem unfair.  At the same time, can you really expect a perfect stranger to know how well you fit the job if you’re conveying a different message?

Although there are many who can provide advice on resumes, including professional resume writers, I thought it would be helpful to share a few of the common errors I see.  Check out my latest article at Job-hunt.org to learn more.  Feel free to add your own advice by commenting on this article within my blog.

Article:  What Recruiters Want to Find on Your Resume

May 7, 2012 Posted by | General Musings, Job Search, Job-Hunt.org article, Resume Writing, Working with Recruiters | Leave a comment