We're all too familiar with the uncountable bevy of off-the-wall, excessive perks companies offer to attract and retain top talent. Company vacations,
outlandish signing bonuses, and full kitchens are just the beginning of the lengths some companies go to to lure the best and brightest. But once you get someone in the door, they spend their bonus, and the novelty of your soft-serve ice cream machine wears off, you've still got to keep them around.
Or not, in the case of Amazon.
Legit to Quit
Taking a leaf out of Zappos' book, Amazon is now offering employees up to $5000 to quit. As the Time article quotes Amazon's CEO, Jeff Bezos:
“The goal is to encourage folks to take a moment and think about what they really want,” Bezos explains. “In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”
Clearly, Bezos is on to something here. To a company the size of Amazon, $5000 isn't much compared to the damage an unhappy candidate could cause, not to mention the malcontent they might sow in the culture.
While many companies aren't in a position to spend $5000 to locate an unhappy candidates who isn't aligned with company goals and values, the underlying theory in Amazon's ploy can be brought back to the beginning of your hiring cycle, and potentially used to prevent bad hires in the first place.
Cost Per Bad Hire Variables
While I'm sure many of you are aware of the pains of a bad hire, the cost of a bad hire is equally distressing. This harrowing metric takes in to account the following:
- Time spent finding, sourcing, and communicating with the candidate, calculated by the salary of your company's recruiter
- Time spent interviewing and discussing the candidate, calculated by the salary of recruiters, hiring managers, peers, and executives
- Time spent training the candidate, in terms of your hiring manager's and team members' salaries
- Opportunity cost, the difference in productivity between the bad hire and an alternative hire
- Time your employees spend fixing a bad hire's mistakes
- Unquantifiable costs, such as lower productivity as a product of low morale
Bear in mind a bad hire isn't necessarily unskilled. Even a very talented worker with a poor attitude or low work ethic can do as much damage as an imposter. For this reason, the sort of trials and tests you give a candidate during the hiring cycle may not be a precise indicator of future performance.
Tying it Together
Here's where it gets tricky. How are you supposed to know someone's not going to work out based on a handful of interviews? There are a few tactics you can take.
Find their Motivations
In Amazon's case, they aren't looking for people merely motivated by more money. Try and get candidates to talk about their ambitions and medium- to long-term goals. Also, have a look at their previous career moves, and ask them why they moved from one organization to another. If significant raises played a huge factor, you could be dealing with a mercenary.
Take it Slow
Many companies are now bringing on new talent on a contract-to-hire basis. Paying potential hires a competent hourly rate for 4-6 weeks will allow you to figure out what they'll be like once their boots are on the ground, and can allow you to refrain from extending a full-time offer (and spend all the time that goes along with it) to a candidate who isn't a great fit.
Stage Try-Outs
Other organizations are staging a more formal trial period, typically lasting around a week. Spending 40+ hours with someone in your office can give you a much clearer idea of what they'll be like. While many candidates, especially those who already have full-time jobs, may not be able to commit to a week long trial, getting them to work with the team for an entire day may give you some of the insight you need to determine whether they have a place with your organization.
