A consistent, streamlined process is key to an effective hiring programme. And for senior management and executive hires, it’s mission critical.
When you can shortlist talent quickly, arrange assessments and interviews swiftly, and promptly extend job offers to the right candidates, you will:
- Keep candidates engaged throughout the hiring process.
- Prevent competitors from snapping up top talent.
- Reduce time-to-hire and increase your fill rate.
- Achieve your business goals and objectives.
As a hiring manager in the life sciences, you’re an integral component of the hiring process. As such, it’s essential you understand the ins and outs of the hiring process and what is expected of you. This will help ensure your life science organisation remains at the forefront in the battle to secure top talent.
Hiring process overview
Before making a senior management or executive-level hire, life science organisations must first qualify candidates for:
- Job fit: Does the candidate possess the right skills, experience and competencies for success in the position.
- Cultural fit: Are the candidate’s values, beliefs, outlook and conduct a good fit with that of the organisation.
Doing so ensures you hire the best candidate for the role and helps prevent unnecessary staff turnover.
To do this, organisations go through a step-by-step process to find the right candidate for the role: The hiring process, in a nutshell, looks like:
- Plan – Identify a job opening, define the key skills, experience and competencies, allocate hiring budget and assemble a hiring team.
- Attract – Publicise the job opening, whether via your wider network, employee referral programme, careers pages, job boards or social media.
- Select – Shortlist the best applicants, send them any necessary pre-interview assessments, invite them to interview and choose the top performer.
- Offer – Send them an offer of engagement, handle counter offers, define and sent out the contract and provide post-offer support.
Though your involvement in the hiring process might only extend to the times when you wish to make a new hire, as a key stakeholder in the process, you have a duty of care to ensure the best hiring decisions are actioned. Poor hiring decisions, even for mid-manager level roles, can cost your hiring budget dearly; approximately three times a senior manager or executives salary.
For this reason, it’s important to understand the hiring process and what your organisation can do to optimise it’s efficiency, effectiveness and speed.
There are several reasons why life sciences organisation should optimise their hiring process.
Every time you make a hiring error, you risk legal repercussions. A candidate may believe that they have been misled into accepting a job offer or accuse your organisation of dealing with them in bad faith. Do not allow prejudice to affect your hiring decisions. If a lawsuit or complaint results, the cost of making a bad hiring decision could be multiplied many times over.
When your hiring process is not optimised, not only do you risk missing out on the best life science talent, but it can also have a negative impact on the organisations’ bottom line. Hiring is a resource intensive and time expensive process (more on that in a moment). And as we’ve mentioned earlier, poor hiring decisions can increase those cost prohibitively.
The cost of unfilled positions
Empty seats – especially senior management and executive level roles – can cost a life science organisation dearly. Don’t kid yourself that you’re making cost savings by not having to pay their annual salary. Assuming each leadership-level employee has a positive financial impact, an unfilled position represents both lost revenue and increased operational costs. For example:
- When a revenue-generating position remains vacant, it represents money lost
- It costs money to pay employees overtime to make up for the lost resource
- Lack of strategic vision and direction can cause an organisation to stagnate
There are also intangible costs, such as lost productivity and diminished quality of customer or client service to consider.
The cost of hiring
A 2016 survey by the Society of Human Resource Management once found that the average cost per hire in the U.S. is approximately $4,100. But that’s across a myriad or roles from janitor to CEO. For senior management and executive-level hires in the life sciences, the costs can be tens of thousands of pounds higher, especially if hiring for difficult-to-fill senior-level roles.
If a new hire doesn’t work out, the cost of rehiring can be significant – up to 15 times their yearly salary. This seems high, but makes sense when you take the following costs into account:
- The original hiring costs for the bad hire
- Training and onboarding costs for the bad hire
- The cost of paying their salary until they exit the company
- HR-related costs such as severance pay and relocation costs
- Time spent correcting poor or inaccurate work
- Diminished team confidence and lost productivity
When the bad hire holds a senior management or executive position, it can impact the organisation’s operations and business strategy, In a Business Insider interview Tony Hsieh refers to bad hires as the domino effect, whereby bad hires inevitably make poor hiring decisions themselves, leading to more bad hires and poor decision making across the organisation.
According to a survey by the Accounting Principal, 59% of 500 American hiring managers polled said that completing a typical hiring process in 2017 took over 28 days. The year before, only 46% of respondents reported it took that long. It appears that a typical hiring process took an average of eight weeks in 2017, or two weeks more than it did in 2016.
An increasing complex business environment is behind the increase in average time-to-hire. As a result, hiring managers are increasingly seeking candidates with specific skills rather than hiring for cultural fit. Hiring for specific skills lengthens the hiring process, reducing the talent pool of suitable candidates and requiring additional assessments to verify their expertise and experience.
Excessive delays make for a poor candidate experience and can increase the likelihood of a candidate falling out of the hiring process. However, there is a balance to be struck. If the hiring processes is extended through additional assessment, this will save the organisation time and money by ensuring the candidate is a good fit for the role and the organisations’ culture.
Quality of hire
Talent Aquisition and recruiting professionals tend to define quality of hire (QoH) as metrics that measure the degree to which the person hired satisfies the criteria outlined in the job specification. In contrast, hiring managers take a different perspective: to them, quality of hire consists of metrics that reasonably anticipate how well a candidate will perform in the role if hired.
So what does this mean? Your hiring process needs to take both perspectives into account.
The best way to do this is to hire top performers who, according to The Adler Group CEO Lou Adler, represent an ROI that is 15% better than average. Adler estimates that if you hire 100 employees with an annual salary of $100,000 US, these employees will generate $24 million per year. Those from the top third will bring in 15% additional profit – $3.6 million more per year.
With an optimised process, those top-performing candidates could be yours.
What to optimise
As stated previously, the cost implications of a slow-moving hiring process can be substantial. So how do you begin? What are some areas you can address or steps that you can take to improve?
Start by calculating and tracking your cost-per-hire (CPH). To calculate CPH, you have to add internal and external costs and divide the result by the number of hires you have completed.
By tracking CPH, you can see how this metric changes over time and make adjustments to your hiring process accordingly.
For more on hiring metrics, read our blog: 8 Hiring Metrics To Focus On In Your Life Science Recruitment Strategy.
Audit current process
To verify whether your methods to reduce CPH are successful, you need to know how much you are spending on internal and external costs.
Examples of internal costs include:
- Talent Aquisition staff
- Temporary staffing
External costs include:
- Relocation or immigration expenses
- Technology costs
- Third-party fees
- Travel expenses
The goal is to reduce CPH without sacrificing the integrity of the hiring process. When you extract quantifiable insights such as these, it becomes easier to identify weaknesses and address them.
Employee referral programs
Employee referral programs (ERP) encourage your existing employees to act as brand ambassadors and endorse suitable candidates from their social networks. The theory is that these employees have the insights and experience to know what’s best for the organisation, and it is usually proven correct. It makes sense: if you were hiring for a senior position, your first choice would be someone referred by a colleague or co-worker you trust. As a result, employee referral programmes (ERP) are touted as the fastest, most cost-efficient way to hire leadership-level candidates.
A logical way to reduce your CPH is to limit the amount of hiring that you have to do.
When you promote from within and provide high-performing employees with both training and upskilling opportunities, it improves their engagement and can result in stellar performance.
In contrast, low retention rates will cost you time, money and productivity. Find out why employees leave (via exit-interviews) and address these issues when you identify them.
If your company can fill an executive position more quickly than the competition, you stand a better chance of getting the best candidates first. Hone your internal processes by:
- Defining what success looks like: What are the skills, experience, qualifications and competencies essential for success in the role?
- Identifying key players in the hiring process. As a minimum, this will be the hiring manager and an HR representative.
- Qualify candidates ahead of shortlisting: This prevents you wasting time and resources interviewing candidates who are poor job fit.
- Reviewing process workflow. If you’ve been using spreadsheets and emails to manage the hiring process, improve efficiency by using project management tools like Trello or Asana. If you do a lot of hiring and have multiple hiring teams, investing in an Applicant Tracking System can give you a better overview of the hiring process and the extent of your talent pool.
- Hire for cultural fit. Providing you have qualified candidates to ensure they have the right skills, experience, qualifications and competencies essential for success in the role, hire the candidate whose values, beliefs, outlook and conduct are the best fit with your organisation. Hiring for cultural fit helps prevent employee turnover and mitigate the cost of a bad hire.
Upskill and expand your HR team
If your organisation’s HR or Talent Acquisition team are overstretched, the hiring process will suffer. Delays will be experienced across the hiring process, from signing off job specifications through to extending offers of engagement and formalising contracts. Consider expanding your HR or Talent Aqusition team to reduce these bottlenecks and speed up the hiring process. Alternatively, seeking third-party assistance can be a cost-effective strategy, especially with leadership-level roles. Executive search firms are well placed to advise and help when you’re trying to source the best talent.
Consider employee referrals
As stated previously, employee referral programmes (ERP) are a quick and cost-effective way of filing your hiring pipeline with qualified applicants.
Consider past applicants
Every time a new position becomes available, input the CVs of all the top applicants into a candidate database. If the candidate you hire doesn’t work out, you will have quick access to other promising candidates without having to advertise the job. What’s more, because the applicants have previously engaged with your organisation, they will already be well informed as to whether the role represents a good fit. In many cases, you can pick up where you left off, but bare in mind that the best candidates are only on the market for a matter of weeks if not days.
Quality of hire
There are steps you can take to improve the quality of hire going forward, such as improving employer brand, screening all applicants for cultural fit, and seeking passive candidates.
Improving employer brand
Your organisation’s reputation proceeds it. Job applicants are increasingly scrutinising perspective employers as they would vet a new purchase on Amazon.
Employer branding is “the process of promoting a company, or an organisation, as the employer of choice to a desired target group…” (Universum, 2014). It is the identity of the organisation in the eye of the applicant and extends far deeper than how you position your life science organisation on your career pages or social media. It extends to your employees too.
Promoting employer brand starts on the job specification and career pages and extends throughout the interview process to the offer of engagement. When hiring goals and expectations are made clear from the outset, it paints a positive image of the organisation to prospective employees. You’ll improve employee satisfaction and, by extension, retention.
Screen for cultural fit
You can optimise the interview process and make better, more informed hiring decisions by considering the cultural fit of each candidate. Instead of focusing on skills, experience, qualifications and competencies alone, ensure that each job specification is a list of reasons why an applicant would want to work for the organisation and what they can get out of working there.
This prevents you wasting time and resources interviewing candidates who are poor job fit. Before shortlisting, ensure all applicants meet the requirements of the job specification and consider introducing tests and other forms of pre-assessment that will save the organisation time and money by ensuring the candidate is a good fit for the role and the organisations’ culture.
Seek passive candidates
60-80% of the top talent consists of passive candidates, meaning that they are not actively job seeking. Executive search firms can assist in sourcing these top performers, who can generate up to 15% more profit than their peers and represent an impressive ROI of 200% to 700%. For more on Passive candidates, check out our FAQ:Active Vs Passive Candidates: What’s The Difference?
Focus on what works
If you’re having success sourcing candidates from a particular source, whether a particular job board, your career pages or even social media, focus more resources on that source. At the same time, audit your current top performers to find out what source brought them to your organisation. With this insight, you can improve quality of hire, speed or hire and reduce hiring costs.
Senior management and executive-level hires present a challenge for many life sciences organisations. While the right hire has the potential to further the organisation, a bad hire can hold it back. When you optimise your hiring process, you increase your chances of attracting and retaining the top performers needed to take your life science organisation to the next level.
For more hiring advice tailored to hiring managers in the life science industry…
- Read The Importance Of SMART Hiring Goal In Life Science Recruitment.
- View our executive search solutions to see how we can help you grow your team and your business.
* Fraser Dove International is a specialist executive search firm operating exclusively in the Life Science industry. Passionate about people, we take pride in helping exceptional life science organisations source the talent they need to design, manufacture and distribute life-changing drugs, treatments and devices which transform and save patient lives.