Why Companies Are so Bad at Hiring
For one thing, they recruit too many employees from outside their ranks
Perhaps the oldest management cliché is that “people are our most important asset”. If that were true, companies would rigorously assess their own hiring practices, and record, to ensure that they are indeed recruiting the best people. Remarkably, many fail miserably at this task. Only a third of American companies check whether their recruitment process produces good employees. That is one of the striking revelations in a recent survey of hiring by Peter Cappelli, professor of management at the Wharton School in Philadelphia.
When companies are asked why they do not monitor the effectiveness of hiring, the most common response is that measuring employee performance is too difficult. Given that staff costs are the single biggest expense item at most companies, this is a startling admission. And, as Mr Cappelli points out, there are some simple things employers could do: check how long newly hired workers stay at the company, or ask a supervisor whether they regret the hiring decision.
This failure of monitoring is all the odder given the effort that companies expend on recruiting outside their ranks. In the three decades after the second world war, American companies tended to fill around 90% of annual vacancies…
