What The Black Hole is Costing You! It’s Staggering!

  

Your Corporate Strategy:  It Just Doesn’t Matter?       Part 18

Having already covered business can ill afford $2Trillion in churn and training costs in the preceding part 6, the additional unknown costs of “Black Hole” recruiting policies really points to some extraordinary issues.

1.      Neither the company nor HR recognize, track or treat the problem

2.      They don’t investigate  and determine the true and whole cost of churn

3.      The company blames HR by cutting budgets, people and programs

4.      More than likely HR/Talent/People Departments don’t comprehend the extent of the            problem.

5.      No one recognizes it effects on sales, costs and profits.

6.      If HR/People/Talent Departments know the facts they cannot or do not represent their    positions well.

7.      HR/People/Talent Departments are profit disengaged or were never engaged.

In the most basic terms possible: 

When the Black Hole application or hiring process tick customers off so much they will never again buy your product or services it reduces sales:

 Is this acceptable?  What would most companies do to quickly raise net profits by 5%, 2% or ½ %?  This increases the $2Trillion churn cost because no one apparently understands and tracks the negative impacts of ridiculous recruiting and hiring practices on sales and profits.

There may be some start up expense for this change...but with a return!  The exciting and tantalizing number is:  Instead of a continuous small incremental erosion of sales and profits (our example of a 5% sales decrease at the bottom line) positive application programs produce a 1/4% to 1/2% or more sales increase!  In our example the net profit swing could approach 10+%!  These are not small numbers!  Most importantly, these can be tracked to insure what you change creates value. 

These costs to your company are mind numbing!  Do you know how your application/hiring process is treating your customers?  However, losing sales and profits from the employment application side due to bad recruitment/acquisition/hiring processes is only part of the story.  Although generalized estimates vary by industry, the additional hard and soft expense costs of hiring and/or replacing an employee can amount to 3X the position’s base wage.   Actual hiring costs are incurred throughout all management levels and hiring authorities within a company.  

Worse, the longer the hiring process takes, the higher the costs.  As previously discussed, this increases the very real possibility high value candidates will not wait for a disjointed, prolonged and non-communicated hiring decision.  While the prolonged hiring process drones on, who’s performing the functions the position is supposed to perform? More money is being lost!  This is today’s norm.  

If you are interested in other reasons the process is broken check out some of My People Thoughts at:

http://johnspeoplethoughts.blogspot.com/2011/09/black-hole-swallows-everything.html

Next: Why not begin with some simple steps (solutions)?