Talent Management Series: Avoid the Pain Created by a Bad Hiring Decision

Welcome to SCA’s Talent Management Series, where we will share content specific to human capital challenges, opportunities, and trends Community Banks and Credit Unions are facing in 2023.

In today’s blog, we will consider the challenge of filling key positions and the value of leveraging short and long-term options to improve the likelihood of a good hiring decision.

Does this scenario Sound Familiar?

You need to fill a position immediately due to a gap left by a key team member’s departure.  The hiring manager sends the job description to your HR team to get the position posted, and you wait for the resumes to come in.  

Your pool of candidates seems to be shaping up. Incoming resumes have varying ranges of relevant experience, and you narrow the pool down to a handful of people so you can begin scheduling interview meetings.

One of the human reactions that can kick in at this stage is a bias toward optimism. Let’s face it. When we feel pressured to fill a position quickly, and there is a candidate sitting across from us who has reasonably convinced us that they are a good choice, it can be tempting to settle for good enough. However, the best thing to do at this stage is to slow down to speed up, allowing yourself to take a thoughtful pace in exchange for greater control over a positive and likely longer-term outcome.

What is the impact of a poor hiring decision?

According to Harvard Business Review, nearly 80% of employee turnover can be traced back to poor hiring decisions. Not only does a flawed decision impact the likelihood of turnover for the new hire, but it typically causes fallout in the form of poor team morale, reduced productivity, and in some cases, additional staff attrition. Couple this with the reluctance many small banks and credit unions have when it comes to terminating a new hire. This reluctance often exists due to a lack of clear, measurable performance expectations during the initial probationary period.

And what about the actual financial cost? Gallup has reported that it typically costs one-half to two times a person's salary when you make the wrong hiring decision. For management positions, that cost is more likely to be on the higher end of the range.

Imagine what good hiring decisions could do for the health and success of your organization. People are businesses' most critical differentiating factor, and community lenders are no exception. Having the right people on your team typically translates to better productivity, increased innovation, a stronger brand, and favorable customer experiences.

SCA’s highly skilled and diverse team can partner with you as you slow down to speed up while navigating critical hiring decisions.

How SCA’s team of professionals can help:

• Place strong candidates with your institution on a “temporary-to-permanent” basis so you can further evaluate their fit for the position.

• Fill the position temporarily to fill the gap while you take your time to source strong candidates.

• Act as a reference resource for you as you consider incoming resumes.

• Source robust candidate pools, including active job seekers and passive candidates not actively looking for a new position.

• Critically review the job description to ensure it reflects your current needs.

• Provide objective criteria to evaluate each candidate and a scoring matrix based on these factors.

• Develop an onboarding plan to fast-track your new team member’s productivity and establish criteria to evaluate them during probation.

• Management Coaching to strengthen interviewing, selection, and onboarding strategies and skills.