Due diligence needed in exec hiring: the difference between success and failure
We recently showed the cost of making bad senior hires, with 48% going wrong in the first 18 months.
To remind you of the enormity of the problem – the cost is a whacking 3.5 x salary for packages around $300,000 and even more for those higher up the corporate ladder, with the true cost of a bad CEO hire coming out at anything up to $30 million for big cap pharma (according to Leadership IQ).
Large companies may ride out the drop in share price or sales; the drop in morale and the exit of key talent. But these quakes cause long-lasting tremors in the organisation and inevitably the seismic effects are always damaging for the company and sometimes fatal for people’s careers.
For the smaller companies – fast growing biotechs and newly emerging mid-sized companies going through change – failed hires can spell catastrophe.
Here’s the paradox though. Most firms will readily agree that hiring is their key priority, but at the same time they treat it as a commodity activity driven by a search for the lowest unit cost. There needs to be more focus on the ROI of great people, currently an almost non-existent concept at many companies.
Recruitment should be undertaken in the same way as any other strategic business decision, using evidence for hiring the chosen candidate and developing a precise on-boarding programme to enable them to deliver.
Let’s remember what order Steve Jobs had these two in “A small team of A+ players can run circles around a giant team of B and C players…I’ve noticed that the dynamic range between what an average person could accomplish and what the best person could accomplish was 50 or 100 to 1”
We believe that better due diligence reduces the risk of failure, and we provide evidence-based decision-support, so let’s look at some evidence
The industry average is 48% failure of senior hires within 18 months.
Our Proof of Candidate® methodology produces 88% success in the role or promotion within 18 months.
Clearly business decisions supported by evidence and due diligence are simply… safer
The numbers speak for themselves and these are figures our clients are proud of. But we can do better and we are determined to continue to beat this with every client mandate.
Our due diligence process together with bespoke onboarding is what drives these numbers … let me know if you want to talk about how we do it.