Uncertainties always exist in the workplace, and one of the biggest uncertainties is whether the candidate you just hired will prove to be a quality candidate. This uncertainty is not only a time-consuming affair, but it can be extremely costly as well. According to the CEO of Zappo, Tony Hsieh, the cost of bad hiring cost his organization “well over $100 million”.
Of course, that is a frightening amount upfront, but more often than not these costs of bad hiring are an accumulation of non-direct costs: loss in productivity, damaged reputation with clients, higher recruitment costs and opportunity costs et cetera.
So, what does it mean by hiring based on credentials and hiring for ‘potential’?
Hiring for ‘experience’
Hiring based on credentials is simply hiring based off a qualifications ‘checklist’, where candidates must have the necessary skillsets before being considered. This is the traditional hiring strategy where experience supersedes other consideration factors. For companies who have roles that are more technical, it is common to employ this method of hiring to seek for candidates who possess a necessary skillset. Most companies also have the preference that their candidates can “hit the ground running”. Understandably, hiring is an uncertainty, and possessing experience can be an indicator of lesser time spent for the new candidate to reach full productivity.
Hiring for ‘potential’
For hiring based on ‘potential’, we are looking at assessing other qualities beyond their qualifications. This could be looking at attitudes, growth mindsets or culture fit, and hiring them based on their potential to do well in the company, even though they may be lacking in some requirements at the point of hire. In a way, this is a progressive and forward-looking strategy as compared to hiring strictly based on experience. Companies who hire for ‘potential’ believe that if they invest the right support and training to help these candidates grow, they will not only be skilled and resourceful, but loyal and motivated as well.
In a report by Robert Walters, a significant 94% of candidates hired for ‘potential’ instead of their qualifications, have been retained in their jobs. Despite that, many hiring managers across Asia are still reluctant to shift their gears towards hiring for ‘potential’. Nearly 1 in 10 were not keen to consider hiring for ‘potential’.
Within the Singapore landscape, we hear about jobs with a long list of requirements demanding years of experience for an entry-level job. As the number of fresh graduates continues to increase year on year, it might be wise for employers to start considering hiring for ‘potential’ to give a fairer chance to this potential talent pool. In essence, identifying a quality candidate will always be a challenge, but having your own process and prioritizing traits you want to see in a candidate can prove to be more beneficial than following the pack.
If your company is struggling with recruiting the right people, Link Compliance can help. We help connect companies to our talent pool in 4 big sectors – Retail and Luxury, IT and Technology, Medical and Biotechnology, as well as Banking and Finance. To know more about our recruitment services, head to our recruitment solutions page today.