At Risk: New-Employee-Success Rate, Hiring Systems
LOS ANGELES, June 19, 2007 — Imagine how your company would run if half of its employees performed below average or turned out to be a hiring mistake. Unfortunately, this very real, stressful and costly scenario is playing out for many top CEOs, according to the 2007 Management Action Programs (MAP) Quarterly CEO Survey conducted by Vantage Research. Survey results indicate an "at risk" employee-success rate, given that 32 percent of the over 400 CEOs report that up to 50 percent of their NEW employees haven't been meeting expectations over the past two years.
"CEOs don't have faith in their companies' hiring processes, which isn't surprising given their companies' relatively poor track record in hiring consistently successful employees," says Allan Hauptfeld, principal of the Valencia, Calif.-based Vantage Research & Consulting (Email).
The 2007 MAP Quarterly CEO Survey is a new effort to track business leaders' professional perspectives and behaviors. Additional second-quarter statistics point toward a breakdown in hiring systems as the culprit behind this "at risk" employee-success rate. Again, more than a third (36 percent) of CEOs lack confidence in their company's hiring systems, rating them below average. And when these employers discover a strong candidate, they often cannot afford to bring this person on board.
"Just finding the 'complete package' in a potential employee, that is, with appropriate skills and training combined with the right attitude and work ethic, is very challenging for CEOs. Then, if they DO find that candidate, offering an attractive compensation package becomes the next major hiring hurdle," continues Hauptfeld.
Lee Froschheiser, President/CEO of MAP, a business-consulting firm that has accelerated sustained growth for over 13,000 companies and 160,000 executives since 1960, says the at-risk hiring process is very serious. The cost of losing a new hire can run two to three times their annual salary – both in hard and soft dollars – and the expense is sometimes much higher than that. "It's extremely expensive and frustrating for many CEOs, but these same business leaders don't have solid on-boarding systems to support finding talented employees," states Froschheiser.
The survey also uncovered that CEOs worry about how today's current events impact their company's potential. However, it's "internal issues" that keep these business leaders awake at night.
"Given their hiring and employee challenges, it's no wonder that 'internal company issues (growth, employee retention, marketing/sales)' outrank external issues (economy, fuel prices, real estate fluctuations) in importance to future business performance," Hauptfeld says.
Finally, the survey indicates that CEOs rely mainly on referrals to source new employees. Other methods, listed in order of popularity, include: print advertising, online advertising (e.g., Monster.com), external search firms and their company website ads.
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