Building a Great Company
In today's economy, it's more important than ever for companies to clearly define the "employee character traits" of new job candidates to ensure their business success. With organizations becoming more team-structured and project-based, personality traits and good people skills are becoming essential attributes for achieving workplace harmony. In other words, you get your hiring right - you save your company time and money.
Take Hotwire, for example. Launched in October 2000 - at a time when most e-commerce companies were struggling - the new discount travel site not only attracted top talent, but also took vital strategic steps to ensure their new hires were a perfect fit to thrive in their corporate culture. From day one, the Hotwire team established employee character traits as guidelines for their interviewing process. Doing upfront screening paid off. Hotwire now enjoys some of the lowest employee turnover rates - below industry averages.
Hotwire CEO Karl Peterson recognized the value of creating a company culture from his days as a partner at Texas Pacific Group. "I believe a big part of our success has been due to pulling together the right mix of people who share similar values," Peterson said. "In addition to having the right technology and financial backing, a solid, workable team is essential for creating a thriving, profitable business. I also knew it would save our company money in the long run."
Just how much money can a company save by reducing mishires? A lot. According to Brad Smart, an industrial psychologist and author of Topgrading, an employee mishire can cost a company 14 times the base salary - or a stunning $840,000. For those in upper management, he estimates the cost at 28 times the salary.
Hotwire's Peterson believes that his company has saved a significant amount of time and money by doing the work upfront to ensure Hotwire found the right people to succeed in the culture Hotwire desired to create. "Getting the 'people thing' right is huge strategic advantage in any industry," Peterson said. "It can make or break a company, especially in the first few years."
So what steps can you take to make sure your hiring investments pay off?
While Hotwire has proven that strategic hiring can add to the bottom line in both dollars and employee morale, they are not alone. Many other companies are seeing the value of strategic hiring. You can do the same for yours. By taking these important steps before hiring your next employee, you can save your company thousands of dollars - perhaps millions. And you'll go a long way towards creating and maintaining the kind of thriving, harmonious company culture that keeps a company growing - in good or bad times.
Fred Lange is owner and president of HR Architect, a turnkey HR solution firm that specializes in sourcing talent, developing talent, and creating thriving work environments. Based in northern California, Fred can be reached at firstname.lastname@example.org. Visit www.hrarchitect.com for additional information.