Wrong Hire — Cost of Existence


  • Talent management , Employee retention are getting to be of paramount focus for organisations & rightfully so . Increasingly it will be about our ability to spot talent , attract , nurture & our ability to create Human / Talent Resonance ( best alignment between an employee’s talent with the role requirement ) , which will be our differentiator & decider for outstanding success—it is going to be less & less about Knowledge , Capital or even Technology
  • Attrition is the opposite of retention . There are two broad categories of attrition : Desirable , Undesirable – causal factor for each is divergent . While undesirable attrition has lot to do about an organisation’s ability to positively engage the employee & retain him / her for longer ; whereas primary reason for undesirable attrition is Wrong Hire – organisation’s ability to select ( or lack of ability ) right candidature .
  • Attrition of any kind ( & for whatever reason ) and its replacement COSTS ! . There have been extensive ( research based or otherwise) accounts of estimation of cost of attrition / replacement & various reporting on different components of this Cost : Recruitment , Induction , Training , Initial warm up time , Employee morale , Company image , Cost of discontinuity … etc . Not much for me to add here .
  • However surprisingly , as much as is written about the costs post exit / replacement of a person – everyone seems to have missed on the cost of Existence of the exiting employee — I am obviously referring to Desirable attrition candidate . There are significant hidden costs of a desirable exit , while the employee is working . I call it as Cost of Existence or a Wrong Hire . Since none has focused on this real but ignored cost , I chose to bring it to attention here .
  • Every additional day of a Wong Hire in job costs organization immensely , in myriad ways , as :
    • Absorption :Since the alignment of inclination and role is low , ‘ uptake ‘ is low & slow . Hence impacts getting ‘ up to speed ‘ in time & quality of output
    • Training : Since inclination is low , efficacy of training is low . Gain for training costs is questionable
    • Productivity : Again due to low fit between role requirement & the employee talent / tendencies , work output is low , both in terms of quantum & quality
    • Substitution : Since the work output is below desired levels , most of the time to keep on track , it calls for ‘ substitution ‘ of efforts from the supervisor . This employee unfairly draws much management resource , just to keep afloat . This is draining of management time , energy , which otherwise can be redeployed in more gainful ways
    • Organisational momentum : One person operating ‘ below par ‘ does not just affect his supervisor or teammates – in a chain reaction of substitution, soon most of the organization , at all levels start operating at one level below . Beyond work output , it saps the organization of its vital vibrance , energy .
    • Negativity : All negative / below par things have a ‘ gravity effect ‘ on the organization . Most draw parallel from a non performer ( going un addressed ) to lower their performance ( if he can survive at low performance , why should I stretch for more ? ) This is indirect negativity . However non performers have a far more potential to add direct negativity , by spreading their frustrations , depressions ; they can harm the organization immensely
  • Unfortunately though most of us have experienced this “ Cost of Existence “ of a Wrong Hire , no one has paid much attention to this , either talking about or estimating the cost of this damage . I too have experienced it first hand & while I have no organized study to back up ; my hunch is that the Cost of Existence of a Wrong Hire is no less than the cost of its Replacement .
  • The cure for this is – Right Selection . We need to realise that while Knowledge , Skills can be imparted from outside , Talent or Constitution ( how is that individual ‘ made up ‘ ) comes as intrinsic with the person we hire . Hence it is important to see that we select – not the most intelligent or most knowledgeable or most skilled , but the most right in constitution . No amount of training or hard efforts can change a wrong person into right . Remember no training can convert a Donkey into a Horse … training can at best make a Donkey , a better Donkey


The more I have work on Strategies , more I traverse through the landscape with Successes & Failures & the more I learn about Business , the more & more I am convinced that — Strategy / no strategy , Technology / no technology ; the most fundamental factor for sustained business success is RIGHT  people  . Right human resource is a multiplier & wrong resource is a divider

Therefore Right Selection is a fundamental business process for an Organisation — it’s first level Quality Control . Great organisations like Google place overwhelming emphasis on employee selection , to an extent that they advocate even cutting $ from Training budget & putting into Selection budget . Selection process in best of organisations are therefore more elaborate , intensive , rigorous & with involvement from the highest level ( not outsourced or abdicated )

While each organisation will & should evolve its own selection process , here are some observations & learning which can help most  :

# Do not hire or pay for what you can ; pay for what you can’t : Historically most make the mistake of interviewing candidate based on his CV & select based on Academics , Knowledge / Skills , Experience . To me this is belief has outlived its expiry date . These are not selection parameters , but rejection parameters . ( It is like Power steering / Power window for a new car — this is no more a decision parameter ) You should not even ask anyone for interview if he / she does not qualify on these parameters . But once shortlisted , don’t waste your time on checking knowledge / skills , academics . Knowledge & skills is what you can impart & hence if your , otherwise Right candidate is short on these , they can always be imparted — then why pay for what you can do . You must hire & pay what a candidate brings , but you can’t impart . This is what I call as ” Constitution ” of a candidate . Constitution is what makes a Horse ,a horse & a Donkey , a donkey — you can do nothing to change & hence look for & insist on while hiring . A constitution is how a candidate , as an individual is ; his / her attitude , application , perspective to work , beliefs , etc …. these are the elements define what he is & significantly impact what he can do in the job

# Do not be under illusion ; we are not in transformation business  : We need to understand that we do not have the wherewithal , nor the mandate nor the time to transform anyone against his / her wishes . We can not turn a Mango into an Orange & vice versa . Do not be under the naive impression that we have the tools to do it . Training can only make a donkey into a better donkey ; but never into a horse . It is like a Fertile land v/s a Barren land . This choice has to be made at the point of selection ; not after

# What is a RIGHT constitution  : I guess , a large portion of profile of a RIGHT candidate is likely to be Universal ; though some portion will always be contextual to the Industry , Business environment ,  Stage of evolution of your organisation & its Value system . I can share what I have distilled as a set of 5 parameters – what constitutes a RIGHT person for us in our current business context : (i) Independent thinking , (ii) Ownership , (iii)  Self management , (iv) Learning ability , (v) Problem – Solution ability .  I have elaborated on these 5 attributes in my last posting in December …. for any more clarity you can always reach me at yatinsamant@yahoo.co.uk ; yatinsamant@handiman.in

# Right selection is a skill , we need to train our interviewers on : Although right selection is so fundamental to business success , ironically , practically none of us , the world over , has even been formally trained in ” Quality Interviewing ” , nor are the interviewers are ever measured on their ‘ performance ‘ — with the exception of a few organisations ( again like Google ) . From my experience I can certainly tell you that right interviewing does require Training , Practice and Measurement & feedback

“OWNERSHIP ” as distinct from ” SINCERITY “

Right person ‘ profile

To me , selection of a ( right )team member is a fundamental process for Business Success — it is actually not a recruitment , but a Quality Control process . To me ‘ Right ‘ person is by his / her Constitution and not by education or knowledge / skills . Essence of my experiential learning in this subject has helped me distill 5 distinct attributes of a ‘ RIGHT ‘ person in our business context :

– Independent thinking

– Ownership

– Self management

– Learning ability

– Problem solving ability

While entire thought process behind ‘ Right selection ‘  ( including knowing Horses from Donkeys ) deserves to be a separate topic & on which I promise to share with you my enlightenment next month , special purpose behind this note is to awaken you to the distinct difference between Ownership & Sincerity .

Many take these two words / attributes ( Sincerity , Ownership ) as interchangeable — they do not know / understand the difference . Many of the rest of us probably subliminally know some difference but are either confused or can not articulate well , the way I will now lay out for you

It started with , when I asked my team members to self rate on the 5 ‘ Right ‘ person attributes I listed above . I saw many of my team members rating themselves 4 out of 5 on Ownership , which got me thinking …. It was clear to me that they were no where even 3 on this … yet as individuals , they have been dedicated , sincere , intelligent & interested — then where is this ( my ) perceived discordance coming from … when I reflected deeper , I realised that they were probably rating themselves on ‘ Sincerity ‘ , when thinking of ‘ Ownership ‘ ( I could understand & agree if they rated themselves 4/5 on Sincerity ) , when I interacted with them on my dilemma my understanding was confirmed . That prompted me to give them clarity on the difference between the two concepts , I hope it will help you too .

# Sincerity is an attribute ( inside )of a person , Ownership exhibits ( externally ) in outcome . Sincerity is about what you are ; Ownership is about what you achieve

# Sincerity is to do with Efforts ; Ownership is about Result

# Effectively , Maids are Sincere ; Mothers are Owners  !

” Maid to Mother ” is yet another of my proprietary , IP registered program about Organisational Transformation ….. but about that , some other time … In the meanwhile & till I connect back with you next month with more on Right person selection ; please share your views / perspectives on if & how different you feel is Ownership from Sincerity .