Saturday, March 19, 2005

More on 100% fit

The organisation decides to go for 100% fit and managers wait until they find the 'right' candidate. For many roles you have empty spaces in the organisation.

What is the cost of this? Well putting a financial cost is pretty difficult in a knowledge based organisation. This is because the whole thing depends on complexity and interdependencies - by having someone working well in one position can increase the productivity of a whole host of others. Have a look at some of the network stuff coming out of the knowledge management community for more on this.

We can however make a simple assumption - that the value to the organisation of employing someone is greater than the total cost of doing so. To get to a more accurate number you probably need to ask the hiring manager 'what is the monthly cost to your business from not having this person' You need to look at things such as related projects which will slip and the value of those projects as predicted in the business case.

Here time to hire does become important, but not at an averaged level. What you're interested in is not the aggregate level but trends by departmental / functional level. Whilst time-to-hire stats do not adding much value trend values do and should be on your radar screens.

The leaner organisations get the more that this matters. So to get a better performing organisation you could argue that you should not be looking at 100% fit but on getting someone with the potential on board quickly. Please understand that I'm not advocating hiring low performers, just hiring based on the potential not whether the person has done the same job before. The question is 'how do I get someone who is productive in X months time?' The answer might well be 'hire without 100% fit and develop'

Of course you could build some slack into the system and over-recruit to cover for the inevitable resignations. You could use development and hiring together and hire for the future, building succession into the system. Now wouldn't that be sensible.