Chapter 1


Without having job criteria in place, there is simply no way of predicting with any degree of confidence whether your people decisions are fair and rational. Practitioners rely on job descriptions and talent management frameworks to combat the risks of poor people decisions, because when you start racking up all the direct and indirect costs of an unfilled vacancy or a poorly placed new hire, the costs are striking, especially for roles that are core to the business.

One of my clients put its business analytics team to the task of figuring out how much it costs to replace a front-line employee. These are not high level positions, but rather staff working in retail branches and call centers. By the time the analyst calculated the cost of advertisement, the time spent by the recruitment team to screen and interview candidates, the loss of productivity because the role was vacant, and the cost to induct a new employee, the total figure was a staggering $57,000 per vacancy.

You might be skeptical and think this sounds too high, but even if you accept that the cost is only half as high, the damage of hiring the wrong people or failing to address engagement issues are substantial. When you consider that an annual turnover rate of 30 percent is the norm for certain industries, a modest improvement in retention (i.e., people staying on for a few extra months on average) can save a large organization millions of dollars and potentially gain a few customers along the ...

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