The cost of a bad China hire is worth looking at in a little more detail. While the situation is bleak, there is hope for the companies who are ready. Most companies are not clearly aware how much they are losing. Often they have been manipulated or think this is just the way China is. Bad hiring is hurting us a lot more than we know, but just how much of our hiring is really bad?
The Street has up a good post on bad hiring that can help us think in China.
I paste some below:
20% of all hires are bad hires
Of course some costs of a bad hire aren’t always obvious — “hidden” costs often cause even more damage than the financial ones, Kinicki says.
“The hidden costs of bad hires include lower morale, interruptions to the unit’s work flow and negative perceptions about the unit, all of which negatively affect productivity and service quality,”
“If the bottom line is affected, then people’s salaries may be impacted — and their bonuses definitely will,” Hovendick explains. “People may start to feel resentment towards the person who is leaving — or towards the managers who brought that person on in the first place.”
So What is the Cost of a Bad China Hire?
I admit the 20% number caught my eye as in China it is 30% in Western Companies. My 20 years of experience helping customers shows a common trend in Western Businesses in China: 20% are a good hire, 50% are mediocre hires and 30% are actually against you in their heart.
What is the cost of having people not rowing in the same direction or even throwing wrenches in initiatives you have going?
Why do we put up with this? In production we talk 6 sigma. In recruiting, we throw that out the window. Through continuous improvement and the strongest process. we are under 5% bad hires. (Our bad hires are not nearly as bad as the 20% and 30% bad hires above.) We plan to keep pushing our number down. See also Why We Background Check.
How much impact does the 30% have on the attitudes of the 50%? You can be sure it is more impact than the 20% will have do to human nature. The real problem I see is that so many companies do not know which are the good hires and which are harming them. I often see the good hires get kicked out as they were not playing politics full time like the bad hires.
How Cleaning Up Works
Cross culturally this is pretty understandable, so that is why we specialized in this area. A first engagement is often that we place one more good hire so the client has 3 out of 10 that are excellent hires, then work gradually from there depending on how brave the customer is to get the rot out.
A better company emerges as the hit rate on great hires rises one placement at a time. A future can be built and the high cost of a bad hire can become history. We love to see bad China hires cease and then light dawn placement by placement.
We find that over 70% of professional applications in China have lied to get the job offer. That accounts for the 30% bad hires and the 50% mediocre hires. The cost of that is the real cost of a bad hire. Bad Politics, high turnover, low moral, poor efficiency, cost control problems and more all start with the mediocre and bad hire.