Fortune 100 companies and small businesses alike are leveraging the benefits of employee assessment companies to help them hire the right employees. The financial impact of a bad hire can have dire consequences for your business. According to the US Department of Labor, replacing a bad hire can cost 30% of the first year’s potential earnings. The Recruiting Times has estimated that it can cost as much as $7,000 to replace a salaried individual contributor and as much as $40,000 to replace a senior executive. With these figures in mind, it’s easy to see why integrating employee assessment tools with your recruiting software is a critical step in your recruiting process. Here’s a closer look at five specific benefits that these tools can add to your hiring process.
Help eliminate hires based on false information
As a recruiter, you’re relying in large part on a prospective employee’s resume to give you insights into their experience, education, and expertise. Each of these areas is important to determining both their ability to do the job you’re hiring for, as well as their long-term viability as an employee. The statistics on job seekers fabricating information about their experience are staggering.
The Society for Human Research Management has estimated that as many as 53% of applications contain false information. Pre-screening adds another layer of protection, in addition to interviews and reference checks, to help you weed out non-qualified candidates.
Reduce the potential financial impact of a bad hire
As discussed above, a bad hire can cost your company thousands of dollars to replace. There are also additional impacts that are harder to quantify, from damaged employee morale due to perceived turnover to managing workflow and customer relationships. Another potential risk is a company potentially facing a negligent hire suit. A negligent hiring claim arises when a poor hiring decision leads to harm to a customer, co-worker, or other individual.
As a result, the company can face a lawsuit and then it is incumbent upon the employer to prove all steps were taken to properly vet and screen the employee. An article in Fortune Magazine suggests that employers have lost as many as 79% of negligent hiring suits, and judgments average in the range of $1 million per lawsuit. Proper pre-screening helps prevent these issues from arising, and provides a solid precedent that the company follows rigorous hiring procedures in the instance that a suit did arise.
Improve hire quality and cultural fit
The standard employee assessment can focus on a wide range of issues, from determining specific experiences to understanding more about a candidate’s psychological profile and work style. Each of these areas is important to finding the right candidate. By determining what information you need prior to selecting candidates for interviews, an integrated employee assessment program can help you identify highly qualified candidate pools.
Employee assessments are also exceptionally useful for gathering data about qualities and traits that are harder to uncover through resume review and early conversions. These factors can include work style compatibility, general approach to problem solving, and overall cultural fit with your organization. Employee assessment tools offer an objective measure of these issues to help inform your hiring decisions and clarify areas that should be probed more deeply during one-on-one interviews and during the reference check process. Since these areas can be as vital as experience and education to a new hire’s long-term success at a company, their importance shouldn’t be overlooked.
Employee assessments help companies mitigate risk, while recruiting more effective. By integrating your employee assessments with your online recruiting software, it’s easy to manage your workload, provide a good experience for candidates, and get fast and accurate results.