It is a common notion in business that no one gets hired but for an expectation of increased revenue or profit. Conversly, making bad hiring decisions leads to turnover, which is the bane of any organization’s revenue stream.
According to the Harvard Business Review:
“80 percent of turnover is caused by bad hiring decisions. These are costly mistakes. The U.S. Department of Labor calculates that it costs one-third of a new hire’s annual salary to replace him. These figures include money spent on recruitment, selection and training plus costs due to decreased productivity as other employees fill in to take up the slack.
But these numbers don’t reflect the intangible damages an exiting employee can have such as lost customers and low employee morale across the rest of the organization. And, turnover costs climb even higher as you move up the organization: mid- and upper–level managers can cost over twice their annual salary to replace.”
Making a hiring decision is in fact: making a buying decision. A hiring decision should be an investment decision however in many cases there is a need to be solved by hiring someone right away.
Solving needs. That’s the key reason why people buy things, whether or not we are consciously aware of our actions. Of course we look for value when we buy, but at its basic core: we buy because of a need.
Employers: when you hire someone make sure that you are hiring to solve a need that you have but more importantly make sure that you “buy the solution.” In plain and simple terms, make sure that you have properly identified the business need that you have and why that need exists, then and only then “hire the solution.”
When you hire the solution, you are buying down the business need or enhancing business profit and ultimately solving the issue at hand.
Hiring the right person though difficult it may be, is the solution and it’s also perhaps the biggest challenge that a company faces. (Sometimes an effective way to buy down a hiring solution is to terminate the issue at hand. Maybe the wrong person is in the wrong position.) Of course that is a different topic though completely relevant.
In conclusion, buying the solution is an extremely effective strategy when making a hiring decision. Making a bad hiring decision happens to the best of businesses and though painful it may be in terms of costs and morale, having a “solve needs” strategy goes along way in successful hiring.