Poor Hiring Decisions Impact Your Bottom Line

By Doug Walner President & CEO, Psychological Services, Inc. | October 28, 2008

Evaluating the strengths and weaknesses of job applicants isn't an easy process. Conventional interviews and first impressions can often be misleading. The candidates you may have thought would be strong performers could buckle under pressure or be ill equipped to handle what you may consider the most basic tasks.

So, what can employers do to "hedge their bets" and help ensure that they're hiring the best candidate possible for the job at hand? One answer is by using assessment and evaluation programs to better match candidate capabilities with key job demands. Cognitive, aptitude and other such tests can help measure not only a person's mental ability, creativity and decision-making skills, but also specific personality traits, whether that person shows a willingness to learn and to succeed, and other factors.

Assessments can also help "weed out" poor candidates and help companies from making mistakes that could severely impact their business's bottom line.

Costly Misjudgments

According to a survey by one of the country's leading accounting firms, turnover costs about 1.5 times the salary of the employee who needs to be replaced. That includes severance costs and other costs related to recruitment, training and lost productivity. It's a hard pill for any employer to swallow, particularly in the hotel and hospitality business where having one "bad apple" in a key position can result in untold damage to a hotel's name, reputation and revenue from repeat business.

The annual hotel industry turnover rate at present is a staggering 48.35%, according to the American Hotel and Lodging Association. When one takes that figure, and combines it with the typical cost of replacing an employee, the case for making the right hiring decision becomes even stronger. Bad hires can cost money - lots of it. But there are other downsides, as well.

Choose a Social Network!

The social network you are looking for is not available.

Close
Coming up in March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.