During my recent MBA webinar series on recruiting, hiring and onboarding, I polled participants on these topics. Last week, I asked students “What percent of new hires leave the company or are terminated within 180 days of their hiring date?” The answer was shocking. Attendees estimated that 60% of their new hires don’t last 180 days. This is an unbelievable and unacceptable percentage!
When you think about the time and money spent on recruiting new hires, it is hard to imagine getting such a low return on investment. What is going on here?
Any industrial psychologist will tell you that when new employees fail so quickly at a company, there are serious flaws with the hiring and onboarding process. Obviously, hiring managers are doing a poor job ensuring that new employees are a proper fit with the company and respective position.
In my consulting practice, here are some of the most common problems I see regarding the hiring process:
• Companies that still use a “friend of a friend” process where the candidate is known in the market area by field management. There is no objective assessment on whether the candidate can actually deliver what the company needs.
• When field managers are threatened with termination if they don’t bring in recruits and are not penalized if they make a bad hire.
• When bonuses and compensation for senior managers are tied to number of originators hired and not sales force productivity.
• The belief that quantity of originators is better than quality of the new hires.
I could go on but I think that you get the picture. The system is broken. As far as onboarding is concerned, these are some of the the key issues:
• New hires are not assimilated into the new company’s culture and value system and are left to figure it out on their own.
• Personal development is centered on teaching the new hire the company’s computer system and CRM. There is no personalized plan for career advancement.
• No effort is made by the company to develop peer relationships between valuable insiders and new recruits.
• Field managers are not being taught how to coach others. In addition, because most managers are producing managers, their production matters before the development of new sales hires.
Granted, these issues are just the tip of the iceberg. In a purchase money environment, reckless hiring and poor onboarding practices will cause a Titanic-scale disaster at some point.
It is no secret that the current quality of the staff and management is at the heart of every successful transaction. With 60% of a mortgage company’s new hires leaving so quickly once they join a firm, what does that say about the company and industry? No wonder customers have such a negative view of banking.
Are your most valuable assets walking out the door every night and will they be back tomorrow? Now is the time to assess your hiring and onboarding process and make the changes necessary so that every time customers connect with your company, they get the very best you have to offer.