Scrutinise hiring risks to enhance growth of organisation

One of the critical execution action plans for the HR department is to ensure that the organisation is not left with a shortage of qualified employees.

In BPO, software, retail, healthcare, hospitality and high-end technology companies and organisations that depend a lot on critical human skills are always alert about talent acquisition. Non-availability of employees would lead to business loss.

For instance, in the garment industry, shortage of employees brings down the function of the production lines and so is the case in BPO and IT companies. Organisations either have less manpower or do not have the suitable manpower at all for execution or to cater to customers.

Companies have formulated effective recruitment and selection policies, along with putting exclusive well-trained recruitment teams in place. Recruiters and managers want to do the right thing but sometimes, the wrong things occur in the process, costing the company dearly, and it invites business risk.

Recruitment and selection is positioned as a very critical function. Earlier the aim was to “Get the right man for the right job”. The new lingo is to “Induct the right person for the right job, with right skills, knowledge, positive attitude, with right values, at the right time, the right cost, the right location and one who will bond, intended for long a association with the organisation”.

Recruitment and selection is a pleasant assignment, but it would become a nightmare in case the team does not reach the set targets. Timely hiring of candidates and bringing them on board is the agenda for the recruitment team, but they do encounter many risks.

Most of the risks surrounding the HR function are ignored or not assessed systematically.

Fire fighting and resolving issues after they have occurred are the typical styles of HR working.

Risk assessment would include to alert, support timely action and avoid disaster-like situations. The time has come for an HR Team to identify the risk arena, specifically in hiring. The challenge is to prepare beforehand to win the talent war in a competitive world. Risks emerge time and again based on the process adopted, situation, business environment, scarcity of talent and unpreparedness etc.

1. Risk created by the recruitment team.

a) Job Descriptions: Do not jump without an attractive job description. Have a clear-cut picture of a candidate with job responsibilities and requirements, complete with both hard and soft skill specifications. Designing a clear job description would not only help in attracting, but would also aid in picking the right candidate. JDs should briefly highlight the most important abilities required for a person to succeed. Make the job title clear; use job titles that clearly describe the profession. nDon’t use jargon and fancy designations. Importantly, more exhaustive job descriptions deter few good candidates that they may not fit the overly specific (or ambitious) criteria. One has to be realistic to prepare and also careful not to include requirements which are too ideal and those which may be beyond the right candidates.

b) Right kind of sourcing: More than 25-30 sources are available for recruitment. Quick and less expensive sources lead to optimum results. Selecting highly expensive sourcing methods such as advertisements in media and not achieving results would create highest risks.

Recruitment teams should understand the sourcing techniques to mitigate the risks in this area. Getting on board critical skills and senior personnel is a very risky proposition and one has to be extra vigilant to select an appropriate sourcing method.

c) Group discussion, aptitude & written tests and interviews: The biggest challenge is to conduct the entire recruitment and selection process right from attracting candidates, screening of resumes, shortlisting for preliminary interviews, holding group discussions, aptitude test and following for final interview and final selection process needs to be planned meticulously and executed flawlessly.

Any deficit, inaccuracy, delays, bad quality process would hamper the hiring process and unimaginable risks erupt. Having right interview panel members who can ask right questions and dig deep to find out the solid talent would yield good results. Time to time conducting internal audits, revisiting the hiring process and scrutiny of risk would go a long way to seize the future troubles.   
d) Check for references: Failure to check with references is “like playing with fire”. The hiring team should do a proper reference check of the selected employees, have foolproof methods of reference check. Do not make a decision with a single reference, but contact all relevant personnel. Particularly senior employees with bad track records would bring a lot of headache, disrepute, create risks and stand as hurdles to the organisations.

e) Provide a great induction: The recruitment team not only has the responsibility to bring employees on board, but ensure that they are properly inducted. Unstructured induction would lead to disaster if the recruited employees leave the organisation within no-time.

Employees’ tenure during the initial 3-6 months is crucial and once they continue the chances of leaving will diminish. A great amount of risk comes around as the firm has spent considerable time and money to bring employees on board. It is essential to study the reasons for attrition during the initial 6 months period, analyse the risks and evolve strategies to mitigate them in the most intelligent manner.

2. Risk Created by the candidates.

The Biggest risk from candidates is that they take offer letters, do not join and lack the courtesy to communicate their decision. Candidates join and leave organisations within 90 days; they come on board with 2-3 other offers and jump for other opportunities. Candidates who do not fit culturally or are unable to adjust to the environment would disappear and create vacuum. Th organisation should identify the candidates who do not exhibit ethical behaviour and integrity at the initial stage itself. The challenge is identify such risks well in advance, quantify them and kick off corrective action.

3. Risk Created by organisation

Organisations should have a good manpower planning system in place. Selection should not be done in a hastily, unplanned way, putting last-minute pressure to fill the positions etc.

Take time to hire properly than to sacrifice quality. Organisations should examine the policies and procedures of hiring and whether they are in tune with the present demands.

Are the internal processes lengthy, cumbersome, time-consuming, and too many hurdles which may carry many risks? Organisations should demonstrate ethical behaviour and integrity in the hiring process. Top management personnel should involve and verify from time to time about any discrimination or bias occurring in hiring, or for other corrupt practices.

Organisations should propel for continuous innovation and improve the hiring process to reduce possible risks. Measuring the success of hiring process. Every organisation craves for good hiring ratios. An efficient selection process would help in good hiring to a great extent. Employee hiring is not always successful and has room for disaster.

The major fallback lies in hiring mistakes made by team members. When the going is good nobody bothers about the expenses. They also tolerate one or two mistakes in selection, but continuous hiring mistakes would be pointing towards the HR department’s recruiters. A cost of faulty hiring is possible to be determined quickly.

Organisations do pay through their nose for the wrong selection, forced to saddle with their costly mistakes, as it is not possible to correct the situation immediately or initiate termination process straight away.

The most needed action plan to mitigate risks in hiring is to introduce a matured measuring system for hiring process.

Measuring how well the recruitment team is performing the role of talent acquisition would guide to foresee the risk and offer tips for improvement. Conducting survey among the new employees to know their experience in the hiring process would go a long way to get practical tips.

They would be sharing their few funny ideas too which would help in revisiting the recruitment and selection process. Organisation should subject the entire hiring procedure for external audit once a year, look at their findings and suggestions seriously and initiate corrective actions to surmount the possible risks.

(The writer is management consultant and trainer)

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