You would never buy a new car or a fridge without a warranty.
You don’t need to.
The manufacturer bundles a warranty into the purchase price to protect you. You are paying for that, but you are protected against major failure and have peace of mind.
Warranties not only cover goods, but also services. Fedex will give you your money back if they are late delivering your package. A 30-minute delivery guarantee introduced by Domino’s pizza in the 1960’s saved the company which is now a multi-million dollar franchise.
What about the recruiting business?
Each year we read more about how valuable employees are – more specifically, how valuable the right employees are. This usually refers to leaders and specialists whose contribution to the worth of a company is greater than average.
Hard to locate, expensive to hire
These people command a lot of money. They can be very hard to locate and very expensive to lock down. Finding and engaging the “right” one is lengthy, painstaking and risky. If they change their mind in the first few months, the hit to the company is in the hundreds of thousands.
Retained search firms offer the closest thing to a warranty. By nature of their contract, the mandate doesn’t end until the right person is hired. Many firms go a step further and offer a replacement guarantee if the hire doesn’t work out in the first year.
But replacing a failed person is not the same as replacing a faulty product and this is where warranties on people fall short. Besides, when you factor in collateral costs such as operational disruption, client relationship damage, employee morale, you are never going to get your money back with a replacement hire.
So isn’t it a better idea to invest in making the new leader happy, helping him get settled and keeping him in place?
According to the Aberdeen Group, 90% of new hires make their decision to stay in the first six months. A few years ago, Fortune put it another way, finding that 40% of new leaders failed within the first 18 months.
Onboarding took off when smart people recognized the value of special training for new executives that would assimilate them faster into the corporate culture and processes and allow them to contribute more rapidly to the bottom line. Prime Genesis, one of the original companies in the field, has been able to lower that 40% attrition to 10% through onboarding.
Better than a warranty
Onboarding in most respects is superior to a replacement warranty but in case that’s not robust enough, we now have pre-boarding.
The best onboarding programs start before the new employee is in the office and pre-boarding in many ways is just segmenting the process into more clearly defined phases. However, it also reflects a behavioural shift that shows a growing number of people feel no guilt in simply walking away from an agreed deal or just not showing up because they found something better.
Preboarding begins when the offer is accepted a nd runs to the day the new hire starts. There are set activities that include information sessions, team meetings, corporate culture discussions. High on the list is frequent contact by the hiring manager or the recruiter to reinforce the decision to engage.
The value of preboarding is presented primarily as a defensive measure in situations where candidates may be less than 100% committed to the new opportunity. But equally, if not more important, it gives definition to what Prime Genesis founder George Bradt calls the “Fuzzy Front End”.
“The time between acceptance and start is a gift you can use to rest and relax or to get a head start on your new role or next 100 days,” says Bradt.
”Our experience has shown that those who use this Fuzzy Front End to put a plan in place, complete their pre-start preparation, and jump-start learning and relationships are far more likely to deliver better results faster than those who choose to rest and relax.”
As the pressures on recruitment continue to grow – more choice for the best people and challenges to commitment – we are seeing the hiring process evolve from a two-step process to three.
First there’s the Search, then there’s the Hire. Now we have the Secure.