Success Factors

• Factors Influencing Success/Conversion Rate:

  • Candidate Quality and Preparation

  • Interviewer Skill

  • Company Brand and Reputation

  • Compensation and Benefits

  • Interview Process Efficiency

  • Market Demand

  • Sourcing Channels

Lost time and productivity

It is a significant investment of time and effort

• • If we take an average of 5 interviews per candidate that made it past CV review and recruiter screen call,  we can assume 5 interviewers, and for the sake of reality we add 2 (reverse)shadows. That means 7 people, having to spend a minimum of 2 hours each:

    1. Interview prep: 20mins x 7people = 140mins

    2. Actual interview: 60mins x 7 = 420mins

    3. Processing notes and preparing feedback: 20mins x 7 = 140mins

    4. Attending debrief: 60mins x 7 =420mins

This brings us to a total of 18+ hours of time lost from hiring manager, HR staff and software engineers, per candidate, and this is not a guarantee of a successful hire, or an offer accepted. Based on my own experience as well as data from the industry, we can reasonably assume a conversion rate of around 20%, meaning 1 in 5 candidates end up passing, and accepting the offer and starting their first day at the company.

No, 6 months later, this puts at 93 Hours invested (read: lost productivity) per successful offer acceptance. During this time period, not only was significant amounts of productivity lost, but also, the team that is hiring are likely under increased workload and pressure, and can even less so afford the lost productivity. There is also the additional serious risk of losing existing team members as a result of the increased work.

Cost of Bad Hires

Now we've spent a total of around 2 weeks and 2 days getting a new person in, but this is not the end of it. Did we do it right? Did we miss something? Was something small like an engineer not doing interview prep, a significant factor in this candidate being successful or not?

Let's break down the cost of a bad hire:

• Significant Financial Impact: Studies consistently show that a bad hire can cost a company a significant portion of that employee's annual salary (estimates range from 30% to 2-3 times the salary, considering direct and indirect costs).

• Direct Costs: 

  • 1. Recruitment expenses 

    2. Productivity lost 

    3. Salary and benefits paid 

    4. Training costs

    5. Potential severance

• Indirect Costs: 

  • More Lost Productivity: Underperforming employees impact team output. Even a new hire will underperform to some extent depending on the complexity of the environment.

  • Wasted Time of Other Employees: In addition to normal onboarding, a new candidate will require more training and assistance than usual, taking up 50-100% of the productivity of colleagues. Not only is productivity lost, but fixing mistakes made by colleagues is regressive in nature due to having to take two steps back and one forward.

  • Negative Impact on Team Morale: Can lead to frustration and decreased engagement among other team members. In case of an already overworked team, a bad hire can make the situation even worse, and increase the risk of attrition.

  • Damage to Company Culture: A poor cultural fit can disrupt team dynamics, and as we know, company culture is extremely important, but also very hard to maintain, easier to break down than it is to build

  • Impact on Innovation and Project Delays: Mistakes and lack of skills can hinder progress.

  • Damage to Employer Brand: Negative experiences can deter future candidates.

  • Loss of Clients or Revenue: A bad hire can directly impact business outcomes, especially in tech, where the product is frequently customer-facing and business-impacting.

• Tech Industry Specifics: 

  • 1. Costly mistakes: The cost of a bad tech hire can be even higher due to the specialised skills required and the potential for significant project delays or security vulnerabilities.