How Are You Spending Your Employment Budget?
Considerable time and expense were involved in advertising the openings, screening the pile of applications, scheduling initial and follow-up interviews, and carefully checking references. An added expense was setting up on-the-job training, and carefully explaining the company's goals and philosophies to each new group of employees.
Needless to say, the cost-per-hire was significantly more than the initial figure. The goal was to ensure that the best people possible were being hired for the jobs to be filled, all the way from custodial positions to plant manager. Because such care was used, the rate of turnover at the end of the first year of operation was less than 4 percent.
It doesn't require a degree in rocket science to understand that the careful selection of employees, although more expensive initially, will save money down the road in terms of replacing and retraining employees and ensuring a productive workforce. Over time, a higher cost-per-hire will inevitably be more than made up in the profitability of a solid, stable and carefully selected workforce. The place to put you’re your employment budget is at the front end of the hiring process, not as employees are going out the door.
