The Risks on Hiring the Wrong Candidate and Why You Need ProMatch



Since its asset sale of the Panorama Division, Prescott Solutions has narrowed it’s focus on delivering top IT and ERP Talent through our ProMatch System. From SAP, Oracle and Tier II functional experts to solution architects to ERP project managers, we take pride in bringing the best and brightest our industry has to offer to our clients.

I recently visited with the CEO of an IT Technology company that posts approximately $50M in annual revenue.  Prescott Solutions had been retained to fill a specialized C+ engineering position that they needed to fill. What was interesting about this request is that the company houses an internal recruiter. As a boutique consulting and recruiting firm, this is a typical type of request for our team. In today’s technology industry, recruiters and talent acquisition departments simply can’t fill all jobs alone. Or they have done it and wasted thousands of dollars with new hires that derailed the project.

We have never doubted the importance of retaining a qualified recruiter to help locate general positions for the company team. However, I admit that even I was a surprised to see in recent survey by CareerBuilder state that 69 percent of employers reported that their companies have been adversely affected by a bad hire this year, with 41 percent of those businesses estimating the cost to be over $25,000, and 24 percent said a bad hire cost them more than $50,000. These were also employers with recruiters on staff. Even with a general recruiter on your team, a company can easily continue down the bad hiring path and cost additional revenue loss.  The financial implications of a bad IT and ERP hire are astronomical.

On the surface outsourcing the recruiting function to a third party may seem like an unnecessary expense, especially in today’s labor market where there may be a large pool of available talent fitting your particular needs.  However, before deciding to utilize in-house resources that don’t specialize in finding true “Culture Fits” for your next hire you may want to consider what a growing body of research has to say about bad hiring decisions.  Outsourcing the hiring function can not only save your organization money but also make you money in the long run.  But before we consider this information, let’s first look at the standard costs involved in hiring a new employee and how ProMatch is the best thing you could ever do for your company.

 General Activities/Costs Related to Recruiting and Hiring

  • Getting the job description done accurately
  • Outlining salary range tolerance and benefits and compensation
  • Writing and placing the ad that attracts the right candidates
  • Handling phone calls and phone screens
  • Receiving, categorizing and organizing resumes
  • Reviewing resumes
  • Arranging interviews (5 to 7 first interviews would need to be scheduled and 7 to 10 hours coordinate hiring manager schedules and possible re-schedules?)
  • Conducting first interviews – 14 to 28 hours of employee time as interviews to clear EEOC should consist of a minimum of 2 Company Interviewees
  • Developing a short list of candidate for second interviews – More Company Employee time devoted only to hiring
  • Additional testing of short list candidates
  • Arranging second interviews
  • Conducting second interviews
  • Performing reference checks
  • Performing Background Check ranging from $35 to $90
  • Extending an offer
  • Sending rejection letters
  • Conducting Drug and Alcohol Screenings – $50 to $100 per candidate offered
  • Other specific hiring and assessment related activities

Estimating the costs related to the listed activities depends on various assumptions:

  • You get an excellent response to your first job post. – Rare for companies needing niche IT and ERP technology hires
  • The first candidate offered the job accepts and starts.
  • The hired candidate works out for the long-term.

If any of these assumptions fails to hold true then the costs can go up substantially and you still may be replacing the employee within one year. When it comes to filling the employee gaps in technology there are huge “hiring stakes” involved that you shouldn’t handle alone. Clearly, the “hiring stakes” are high at any point in an organization’s development. I would argue, however, that they are at their highest when it is a position you need to immediately fill for your IT and ERP project. Not only can a bad hire derail the project by not performing his or her anticipated duties, but actually can sour the entire work environment in an incredibly damaging – and long lasting – way. For example, before hiring Prescott Solutions to do their staffing, a client told me the devastation of allocating a bad hire on a 1.3 million dollar SAP consulting project they contracted. Their results, were devastating as they not only lost the 1.3 million dollar contract but they ended up spending over $90,000 in legal fees attached to terminating the employee for poor performance.

There is no way to look at a bad hire as an acceptable business cost, so you simply have to take hiring very seriously. You have to aim to hire the right person on an IT or ERP project from the start. The fact of the matter is simple: many companies just don’t know how to hire for a technology projects, especially an ERP project. Even, the CEO of the IT Company that retained us specialized in IT networking, infrastructure, firewalling but not IT competency based hiring and cultural fits.  It’s not how they make their money. Your company may have the most gifted Talent Acquisition department but corporate recruiters on staff don’t understand the nuances of IT and ERP hiring and which candidates will really get the job done right. They don’t know the behavioral questions to ask, they don’t know how to evaluate technical skills and software modules and they don’t know how to find an IT and ERP expert who fits the culture of the company because experience on a resume can’t give you those answers. This is where Prescott Solutions steps in and literally saves the day. Our ProMatch candidate selection process identifies top IT and ERP talent. Using our staffing and resource acquisition methodologies, we are able to deliver the right people for the right job at the right time. Further still, we offer a flexible array of contract, contract-to-hire and permanent placement services, ensuring that each of our clients finds the best short- or long-term solution for their unique needs.

Click through to learn more about Prescott Solutions staffing services, including SAP, Oracle and IT -specific resources. Or, if you’re an IT, SAP or Oracle candidate looking for your next project, check out our Careers page or send your resume directly to recruting@prescottsolutions.com.

About the Author

avatar About Portia Prescott

Portia Prescott, CEO/President, is the force behind Prescott Solutions. A Brown University-educated executive and acknowledged leader in specialized staffing, Portia has recruited former C-level executives, change management leaders, federal government consultants, PR experts, engineering resources, Lean Six Sigma professionals, aerospace specialists, and supply chain professionals from major corporations.

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