Hiring from a diverse and qualified talent pool is essential for organizational success, yet hidden biases often impair interviewers’ ability to assess candidates objectively.
According to the SHRM WorkplaceTech Spotlight discussion between talent acquisition leaders Guillermo Corea, Managing Director of SHRMLabs, and Vikrant Mahajan, founder and CEO of JobTwine, standardized interviewing processes and artificial intelligence can mitigate biases and ensure the best candidates fill roles. Their conversation explored critical data on the substantial expenses that firms face from poor hiring decisions and discussed innovative technologies such as JobTwine that inject greater fairness and efficiency into recruiting.
The Costs Associated with Hiring Mistakes
Botched recruitment takes a heavy toll on companies.
“The average cost-per-hire is about $4,700, but many employers estimate the total cost to hire a new employee can be three to four times the position’s salary,” Corea said.
Moreover, managing underperforming hires saps management bandwidth. “If a wrong hire is made, 26% of a manager’s time is going to be spent coaching a wrong hire,” Mahajan said.
Training, onboarding, and potentially needing to restart the hiring process compounds the inefficiencies of mismatched hires. In fact, companies lose an average of $17,000 on each bad hire, and the U.S. Department of Labor estimated that the cost could be as high as 30% of the employee’s first-year wages, potentially reaching $24,000 for someone with an $80,000 salary. Mahajan noted that these expenses likely underestimate the actual costs, which he estimated as ranging from $50,000 to up to $240,000 across different roles.
These sobering statistics spotlight the importance of minimizing hiring miscues from the outset. Yet, biases often unconsciously distort talent evaluations, leading recruiters to focus on candidates they instinctually warm to rather than objectively assessing each person’s abilities. A striking 48% of HR managers admitted that biases affect the candidates they hire.
Tackling Biases That Impact Interviewing
People naturally gravitate toward those who remind them of themselves and share similar perspectives. In contrast, candidates with different backgrounds or communication styles may be unfairly penalized.
“Humans’ unconscious bias will play a role in any interview, especially if it’s not standardized,” Corea said.
Read full article here
Hiring from a diverse and qualified talent pool is essential for organizational success.