The real cost of bad on-boarding

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The real cost of bad on-boarding

Retaining candidate’s engagement and commitment:

As we work across the UK with mid-senior level candidates we’re seeing increasing trends of companies failing to secure their preferred candidates once they’ve made an offer of employment. We feel this is symptomatic of the fact the industry is candidate short and many businesses are competing for the same candidates. It’s also in some cases a reflection that many businesses still don’t recognise the value & importance of on-boarding candidates properly and how not doing this properly will often play into the hands of their competitors who may be delivering a better and more consistent candidate experience from the first contact through to when the candidates starts in their employment.

Once a candidate has gone through the recruitment process there’s already been a significant cost incurred. Step back for a second and think of all the time and expense that a business incurs both in sourcing and interview candidates. Advertising costs, recruitment department costs, hiring manager’s time and expenses, senior management’s time in approving new appointments etc.

Businesses will often be very conscious of the cost of using an agency but surprisingly very few businesses calculate their own costs of sourcing candidates and taking them through their recruitment process. Perhaps if more businesses looked at the costs then there would be a more consistent approach to ensure candidate experience and on-boarding is of a high standard.

By knowing the time and financial investment that’s made during the recruitment process it’s far easier to see the impact on your business of losing your preferred candidates during the recruitment process both pre or post the offer of employment being made.

“For every week an offered candidate goes without contact from their new employer the likelihood of them starting reduces by 25%”

What are the key considerations?

When a business is understaffed some of the implications are:

1. Customer Service levels can drop when a site is functioning without having a fully staffed team in place. This can lead to customer’s taking their business elsewhere which then directly impacts revenue and profit.

2. The Existing team will often have to work extra hours and shifts to cover the site whilst a candidate is found. This can then negatively impact moral within your existing team who might then be more likely to look for a new job or be open to approaches from your competitors who are looking to hire.

3. The risk that as time goes on there’s temptation to over promote someone to fill the vacancy as a short-term fix when in reality the business needs to focus on recruiting a more qualified candidate from outside of the business to help drive the team and business forward.

When a candidate you have already spent time and money recruiting later declines an offer then the costs and risks outlined above only increase further and even if the vacancy initially wasn’t business critical then that can quickly change e.g. as time goes on or if you have an unexpected resignation within the business.

“Between 30 and 35% of newly placed candidates leave within the first 6 months. Of these over 75% cite poor on-boarding and lack of organisation around their training as primary reasons for leaving, and 40% of those who leave went back to their previous employer”

Why will candidates reject an offer of employment?

Counter Offer

The most obvious reason is if they’ve been made a counter offer from their current employer. Whilst there’s always going to be some situations that can’t be foreseen the counter offer is the single biggest reason for candidates declining offers. Things you can do to mitigate the risk of your preferred candidate accepting an offer are:

1. When you’ve identified your preferred candidate make as good an offer as you can.

2. Ensure you’ve sold the benefits of your business clearly to the candidate so they understand what value you can bring to their career not just what they can bring to your business.

3. Deliver a great ‘post offer’ candidate experience which will help validate the candidate’s decision to accept your offer of employment.

Receiving a Low Offer

If the offer you make to the candidate is below their expectations then consider the impact of that and the likelihood that the candidate will reject your offer.

A lower offer can devalue the candidates perception of the hiring manager and the business, and can put at risk any engagement and buy-in that has been generated up until that point. If you were in their shoes and received an offer that was lower than what you expected / hoped for consider the question marks this might create in your mind.

Things to consider:

1. What’s the cost v benefit of under offering the candidate. It in ‘theory’ might save the business some money but not if they reject the offer in which case you’ll often then have to incur further cost from having the position vacant longer and it’s highly likely you will end up having to offer a higher salary to the next candidate particularly as the vacancy becomes more business critical the longer it’s open.

2. The candidate is highly likely to get a counter offer when they resign so is the financial incentive for them to move jobs enough to enable them to accept your offer? By under-offering are you just making it easier for your competition to retain their employees that you want to bring into your business?

3. Even if you’re prepared to increase the offer (in the event they decline your first offer) this often can be too late as doubt has been created in the candidates mind and they may question whether you see the value they can bring to the business. What if that candidate is also interviewing with one of your competitors who makes a good offer. You could be making it easier for your competitor to secure your preferred candidate.

4. Going back to the candidate and increasing the offer after they reject your first offer can be a risky tactic and in our experience is hit and miss. The candidate might think ‘if you thought I was worth that why didn’t you make that offer in the first place?’. If there’s any temptation to offer a lower figure first and see what the candidates reaction is, this is a very risk approach as many candidates won’t be comfortable trying to negotiate with you so may just reject your first offer, end communication and move on.

5. If you’re delivering an offer that’s lower than their expectations and it’s justified then take the time to explain why the offer is fair and talk to the candidate about what you can do to support them to address any gaps in their experience. They’ll want to know when will they next have an opportunity to have a salary review and what will the business do to support them. The commitment of a salary review in the near future (documented in their offer letter) can go some way to help put the candidate at ease and make it clear they will have future opportunities to have their hard work and progress recognised. Help them see the value you’re going to add to their career and how this will benefit them short, medium and long term.

“Candidates who had a positive experience of their on-boarding and training with a new employer were around 60% more likely to stay with that business”

Poor / inconsistent on-boarding and communication

A candidate may decline your offer for reasons other than ‘money’. Many candidates place equal importance on stability and relying on their gut feeling when it comes to assessing whether they’re making the right / wrong decision in moving jobs. The period just after an offer of employment has been made, and up to and beyond their start date is a critical part of the recruitment process.

Simple things can make a real difference during the on-boarding process such as:

1. Communicating offer, contract and training information quickly after the offer has been made. Many candidates want to see what they’re signing up to and it’s understandable giving moving to a new company is a big step for many people and some candidates are more prudent / risk adverse than others. If there are any delays then this could not only delay their resignation (and therefore their start date with you) but could also ‘spook’ the candidate and cause them to question their decision. It’s key to keep the positive momentum and communication flowing once the offer has been made to the candidate.

2. Delivering a personal touch. Does the Recruitment Manager and the Hiring Manager extend a personal ‘welcome on board’ phone call to the candidate shortly after the offer has been delivered? This is so simple yet so impactful and that personal touch delivered quickly can help the candidate validate their decision to accept the position. Both Recruitment and the Hiring Manager are invested in the recruitment process but it’s surprising how often this doesn’t happen or happens too late. Consider the value of this particularly if their current manager is trying to persuade them to stay or is telling them they’re making a bad decision. We’re talking about a 5 minute phone call but it’s surprising how many times this doesn’t happen and it’s a real missed opportunity!

3. Set up a lunch or coffee with the Hiring Manager (welcome to the business, talk through what the training’s going to look like, maybe meet some of the team). You could also send the candidate a voucher to visit your business. The goodwill you’ll generate from these simple touches will help keep their engagement and it can go a long way! This small cost is far less than the cost of losing the candidate’s engagement.

4. Consistency and reliability of communication. It can be damaging if the candidate is expecting a call or an email with information at a certain time and then that communication doesn’t happen when it’s been promised. It can create a level of doubt in the candidates mind and rightly so. The impact of not delivering on a promised communication can be far greater than the time it would have taken for the relevant person to make the call / send the email that the candidate was expecting. Consider what your reaction would be if a candidate didn’t call you when scheduled. You’d be questioning their commitment. It works both ways!

Consider the time and financial cost of getting it wrong and having to go back to the drawing board! You may have just missed out on the best candidate for the role…..

Conclusion

It’s a well reported fact that good candidates are hard to find. Because of that, good candidates have options and can be more discerning when it comes to deciding what companies to join. As much as a candidate needs to prove to their prospective employer that they’re the right person for the job, gone are the days when companies can keep candidates waiting during a prolonged recruitment process or can expect a candidate to turn up on their start date having had little or no contact with them whilst they’ve been working their notice period.

Key take-away points:

1. Put yourself in the candidate’s shoes. What would a good and engaging recruitment and on-boarding process look like to you? What would you hope for if you were the candidate and what things if not done properly might cause you to question whether you’re making the right decision?

2. We need to remind ourselves that moving jobs is a ‘big deal’ for people. It often doesn’t just affect the candidate but can also impact family, dependants etc. and some candidates can get twitchy if things aren’t managed properly in the build up to them joining your business. Don’t give them any excuses to question their decision.

3. Ensure that both your Recruitment & Operational teams work together and take a collective ownership for delivering best practise on-boarding. Ideally operate and manage an internal SLA to ensure on-boarding is consistent across the business. Communicate this to your recruitment partners (internal, external, stakeholders etc.) and measure compliance to the SLA.

4. Remember that even if the recruitment process has been engaging and positive, if the on-boarding isn’t as good then it stands out even more and the time, cost and effort put into sourcing the candidate and taking them through the recruitment process can ultimately be wasted.

5. Manage the candidate’s expectations. If they don’t know what to expect in the period between offer and start date then they could be unnecessarily worrying about things. People can get nervous and anxious when it comes to change (particularly those who haven’t moved jobs for a while). If they don’t know when to expect their contract, training plan etc. then they could wrongly assume they’re just deemed a payroll number and that nobody’s really bothered about them. You should be able to map out the key steps so they know that everything is on track and in hand. This is basic communication that’s easy to get right if everyone recognises the importance of it.

6. Commit to any specific communication that has been promised to the candidate. Not calling a candidate or sending emails / posting information when you’ve promised it can cause the candidate to get cold feet. They can only form a judgement based on what they do / don’t hear from you.

7. Make the best offer you can. Whilst you have a budget to manage if you trim the offer unnecessarily and the candidate doesn’t accept it then more often than not you’ll end up incurring more cost than you would have if you’d made a better offer in the first place.

8. If using an agency, make sure they know what your onboarding process / SLA is. Both parties have a vested interest in making sure the candidate stays fully engaged. The Agency often has more of a relationship with the candidate and this can be a valuable support both to the candidate and employer so don’t disconnect from the agency once the offer has been made to the candidate.

9. Remember that good candidates aren’t secured until they start in your business. If they’re working a notice period they’re still susceptible to a counter offer, approaches from other businesses etc. The work isn’t done once an offer has been made; it’s in reality the start of the most crucial part of the recruitment process.