7 Quick Lessons to Improve Your Recruiting Immediately! #GlobalTADay

First, before we get into the juicy content, Happy Global TA Day to all my TA, Recruiting, Staffing RPO friends out there working the grind! Today is a celebration of our profession! For me, recruiting has always been one of the most important aspects of any organization. We, the Recruiters, work daily to increase the talent in our organizations, and I’ve yet to find a CEO who won’t say that is one of the most important things an organization can do!

The 7 Lessons:

  1. Advertising works – what I’m finding right now with most TA shops, SMB to Enterprise, are they are funding their job advertising like it’s 2019, and 2021 is a completely different animal! I’m seeing organizations spending 5-10X to get the same traffic. So, open the check book, it’s time to up your advertising budget!
  2. Push for Referrals. No! Harder! Employee referral hires make up on average 40% of your total hires for most organizations. They are on average some of our highest quality of hires. Work to get more of these! That doesn’t necessarily mean higher referral bonuses. Before you pay more, invest in some great referral automation technology.
  3. Establish an Employee Advocacy Group. We have a small set of employees who love their jobs, the company, etc. This small group can help us spread our employer brand message, jobs, etc. For little more than some recognition, a few lunches, and some inside access. Use the power of your employees to incraese your brand!
  4. Nurture your own Resume Database in your ATS. Your ATS database is your most underutilized resource you have in Talent Acquisition, by a thousand miles! Maybe a million miles. Every single person in there at one time applied to a job saying I love you I want to come work for you. If we actually threw some great CRM technology on top of that database, you would be amazed at how many additional hires you could make. We currently use two tools Loxo and Candidate ID.
  5. Old School is New School. I keep hearing from Enterprise TA leaders that old school recruiting activities like, in-person career fairs are working right now! Why? All of the new automation has made recruiting a bit more impersonal, and candidates actually like being able to talk to a real human and get told “yes” or “no” to their face. At the very least, they don’t get ghosted or lost in the black hole!
  6. Increase your Automation! But, wait, you just said…Yeah, it’s one or the other, it’s both! A.I. driven automation, especially in high volume hiring, will help you hire faster and better. Having an AI driven chatbot on your career site will drive more applies. The data is all pretty clear on this tech.
  7. Train and Develop Your Recruiting Teams! Want to be better at recruiting, how about putting some money into making your recruiters better! I love the training tool that Social Talent has. My entire team has been through it. SourceCon also has some good training.

Bonus Tip! Actually, measure your recruiting funnel and react accordingly. I find most TA shops measure things that really don’t move the needle in recruiting. You need to know the baseline activity of your recruiters, so you can actually understand what your overall recruiting capacity is, and if recruiters are meeting a level of activity to produce results.

I actually wrote all of this in my book (The Talent Fix), along with some other stuff! But, as it turns out, most people hating reading books! 😉

Happy Global TA Day my friends!

Adjust Your Recruitment Packaging!

I talk to a lot of TA leaders and pros who tend to get stuck when it comes to their employer branding and messaging. They want to be transparent and tell candidates exactly who they are and what these candidates should prepare for. The problem being, they believe if they are transparent then candidates will not want to apply or join their company.

The problem with this type of thinking is every single employee, and every candidate for that matter will look at your company and your jobs through different lenses. Take your most loyal employee of all time (Timmy), the person who loves working for your brand more than anyone. What they believe is their truth. Our hope and dream is everyone sees the world, and our company, the exact same way!

Now, take the employee who is the exact opposite end of the spectrum as Timmy! This employee hates you, the company, their job. They are a walking work cancer. The only question you really have about this employee is can we fire them faster than they might be able to quit.

The reality is, your brand and your jobs are truly no different to these two employees, yet they see it as completely different.

When it comes to your employer brand there are some key things you should not adjust for:

  1. This is who we are.
  2. This is what we stand for.
  3. This is what we do.

The rest is just packaging!

Now, I’m not saying you should put out a video that shows daily ice cream socials and free Tesla’s. That would be lying. But if your packaging of your jobs and your company aligns more with how Timmy sees your brand, that’s the packaging. This world is real for at least one person at your company. It’s not a lie, it’s one employee’s truth.

You can change your packaging constantly. By location, by job, by month, etc. The core of your brand doesn’t change. This is who we are, and what we stand for, and what we do. You might even add to this with some this is what we will do for you or help you become. As long as that’s your core and you can deliver on it.

Each of us works for a brand and a job that can sometimes suck and sometimes be amazing, but mostly is a job that we like fine enough, but not as much as a puppy giving you a kiss, or your child running to you after you’ve been gone on a trip. And that’s okay!

So many of us are struggling to get people to apply to our jobs and come work for us right now, and the truth is, we need to step up our marketing game! We need to make our stuff more attractive! More desirable! We need to adjust our packaging. You’re trying to sell high-end jobs with generic branding, and you’re getting generic results.

3 Things to Stop, Start, and Keep Doing in Talent Acquisition! #SHRMTalent

Hey, gang, I’m out at SHRM Talent this week, and I have to tell you, it feels amazing to be back doing some in-person events! I’ve been a part of some exceptional virtual events during the pandemic, and the content is always very strong, but there’s something about interacting live with practitioners, face-to-face, that can’t be replicated!

As I’ve been hitting sessions and talking with corporate TA pros and leaders this week, it’s clear that the pandemic has given us some new challenges in TA, but we also have so many things that were broken before that we keep doing. Usually, at SHRM Talent, I find a lot of stuff that speakers are telling us we should start doing, some will tell us some things to stop doing, almost no one says “Hey, keep doing this…”

The Top 3 Things I Heard You Should Start Doing:

  1. Find automated ways to include all applicants in the selection process. Currently, we eliminate too many candidates that we believe aren’t a candidate, by taking a five second view of their application or resume. Hello, unconscious and conscious bias! Also, this kills are diversity and inclusion. We need to find ways to let everyone in the process, without slowing the process down!
  2. Go back to old school techniques! I’ve been hearing from everyone at SHRM Talent that many are finding success by going back to some old school techniques like, in-person career fairs (no black hole!), actual newspaper advertising, community networking with religious organizations and community organizations, etc. Yes, digitial is important, but when everyone turns right, some will find success by turning left!
  3. 95/5 – Still only 5% of organizations are using Programmatic for job advertising. 95% of organization’s marketing teams are using Programmatic to sell your organization’s products and services. More organizations are going to have to start testing and using programmatic for job advertising.

The Top 3 Things I Heard You Should Stop Doing:

  1. Stop treating candidates like crap. Okay, you aren’t, but everyone else is! The fact remains that candidates are telling us in survey after survey they keep getting ghosted and not getting feedback after applying and interviewing.
  2. Stop spending money on “job boards” without knowing what your actual stastics are regarding that spend. Which “job boards”? Indeed, LinkedIn, ZipRecruiter, etc. If you are spending money to post a job you need to know what is actually happening or not happening. Too many of us are still posting jobs and spending a ton of money without really understanding what is happening. More spend doesn’t always equal more of what you want.
  3. Stop allowing HR to pre-board and on-board all those candidates you worked your butt off to get to a “yes”! The candidate has the relationship with a recruiter, and they are more likely to work with a recruiter on issues they might be having intially. It’s too easy for them to break-up with HR, because they don’t know HR.

The Top 3 Things I Heard You Should Keep Doing:

  1. Keep picking up the phone. Turns out, very few candidates claim they will accept a job without first speaking to someone either via phone or live about a job.
  2. Keep trusting your remote recruiters by fully understanding and knowing what they are actually doing through measurement of funnel recruiting metrics that validate why you trust them so much!
  3. Keep communicating non-stop with your executives, and really your entire organization, weekly on what’s really happening in recruitment. Be transparent and ask for help. When a crisis hits any part of your organization almost all employees would be willing to help. We are in a hiring crisis, it’s not time to be quiet, it’s time to be loud and get everyone on board!

Hourly Hiring Made Simple! @ParadoxOlivia

I’ve looked at a lot of hourly recruiting technology in the past three months. It seems like every organization that has mass hourly hiring all had issues all at the same time. Every org, every industry, every marketplace has openings and is trying to hire.

Take a look at this video from Paradox, on the re-launch of their hourly recruiting technology:

Of all the hourly hiring technology I’ve taken a look at, Paradox/Olivia seems to be the one, at Enterprise scale, that has the most merit to be wildly successful! The hourly hiring product is intuitive and the process flow seems to be actually built by someone who has had to hire high volume hourly workers in their career!

I’ve spoke to a number of CHROs and CPOs over the past few months and I’ve been very specific with them about having their teams check out what Paradox has put together. Well worth a demo, especially with all the pain that’s out there around hiring an hourly workforce.

I think so many organizations who have high volume hourly hiring issues right now are wondering why their ATS isn’t working better. The problem isn’t your ATS, it’s the automation behind your recruiting stack. Hiring high volume hourly workers quickly and efficiently takes a different level of automation that enterprise level ATSs do not have built. Most have a process designed around hiring your normal white collar, professional worker, and they do a fairly good job at it. Hiring 1000’s of workers a week or month, all via a mobile device, is a completely different animal!

Paradox didn’t pay me for this review (although they should!). This is how much I like this product, that I wanted to share this with all of you so you could make the decision is this would help your right now with delimma most of us are facing when it comes to hiring high volume right now!

“Hire Fast! No, Faster! Fire Fast!” The New Recruiting Axiom!

Traditionally, talent acquisition pros would say it’s “Hire Slow, Fire Fast”. I always thought that was stupid because the reality was for most corporations it was “Hire Slow, most likely Never Fire someone unless they kill another employee in front of you…” Or something like that!

Okay, “It was Hire Slow, Fire Fast”, but we all know that never really worked. Currently, around the world, it’s mostly, “Hire Slow, Fire Slow”. I’m a true believer in we you don’t hire someone to fire them. So, move quickly, hire well, and then support the heck out of them and make them superstars, seems like a higher ROI approach to hiring!

Welcome to 2021!

The problem is, economies don’t give a crap about our axioms! Currently, in the US you better Hire As Fast As You Can, and Still that probably isn’t fast enough! So, “Hire Fast, No Faster, and Fire the Bad Ones That Got Through Your Super Fast Process!” That is really the only shot you have in 2021, and most likely for 2022 and 2023!

Let’s break down what would really happen if you started hiring super fast!

1. You would fill positions much faster than you do now.

2. You would probably make more bad hires. Turnover would increase if you do it right.

3. You would probably spend more on training.

4. You would probably hire some folks you normally wouldn’t and actually, some of those will be really good.

5. You would be forcing your hiring managers to make very quick decisions if you let them decide at all.

Of course, this isn’t your long-term let’s do this forever recruiting strategy! This is, hey, if we don’t start moving super fast, we’ll never be able to compete for talent in our marketplace!

Amazon Warehouses can currently hire candidates from applications to offer in under 30 minutes. Low skill jobs, paying around $17-21/hr. Yes, their turnover is about 150%. Yes, that is actually about normal for warehousing jobs. Turns out, Doug, the hiring manager, doesn’t have some magic selection instinct. Is the Candidate is interested? Does the Candidate show up? You’ve got a 1 in 3 shot they’ll be a good hire.

If I was in the same marketplace as an Amazon Warehouse and hiring the same level of talent, I would literally hire a taco truck to sit outside their property across the street and just hire all the people who turnover from Amazon on a daily/weekly basis. That would be my sole recruiting strategy! Let them do all the work, and I just clean up the mess!

How Could We Make “Hire Fast, No Faster, and Fire Fast” Work?

It’s pretty simple. You pay slightly above market pay. Be one of the top-paying companies in your market. Hire extremely fast, and the moment an employee starts to show you they actually suck BAM! You fire them. The reality is, being a pay leader in your marketplace will continue the funnel of incoming candidates coming.

We aren’t trying to put Jeff Bezos in space people! We are just trying to fill openings at our companies that are all about average. We treat you fairly well. You’ll have some laughs, and once in a while, we’ll buy ice cream and stuff. It’s not the best gig, but it’s far from the worst.

The key is you can’t let low performance even show up for a day! You reward, celebrate, and do all the good stuff for those who come to work. Those who come to collect a check, and not work, you have to kill instantly! Sounds harsh, but this isn’t show friends, this is show business!

College Recruiting For Candidates Is A Giant Mess!

I think about 99.99% of us believe that we actually put a man on the moon! We have put together technology to take someone on earth and put them on the moon, and then actually get them back to earth! That is amazing. Do you know what we haven’t figured out?! One system to help college kids connect with employers to get jobs!!! UGH!!!!

Why hasn’t recruiting technology solved this issue?

Okay, don’t start with me on Handshake or LinkedIn or Yello or Brazen or whatever dumb tech that says it’s for college recruiting but doesn’t really work for every college or every student.

First, shout out to my guy John Hill, former Campus Evangelist for LinkedIn, who is now with TechStars. Six years ago this man figured out how LinkedIn could have owned this space, but they weren’t interested. They walked away from owning every single professional at the beginning of their career. It could have been so easy for us all. One platform under God, indivisible, and all that sh*t. John, you are a genius, and I so badly wanted you to succeed with that idea!

If you want to hire an upcoming college grad for a job you have, it’s a freaking nightmare, mostly. First off, you have to find out from each college/university who they actually work with and to which platform are they sending their kids. Handshake is the big one, but not everyone works with them, and as an employer, they are kind of difficult to work with (I’ll explain later). LinkedIn is the easiest to work with. Yello and Brazen, and others like them, are more event and campus management, than a database of students.

The reality is, employers just want a database of students! We want to log in, pay whatever fee you ask, and search by the university, year, major, location, etc. We are simple people with simple needs. Why can’t we have our simple tech!?!

Why doesn’t one technology own the college recruiting space?

First, it’s not really a technology problem. It’s an empire-building and power play by university career services offices. Let’s do some history. Old school career services ran “Job Fairs”. You came to campus, paid them money, and ran the dog and pony show. It was awful. Everyone hated it. Except for the Career Services employees. This was their singular job and how they proved their value to the powers that be.

The future came and employers and students were like, “Job Fairs Suck!” and why can’t we just put up a profile on LinkedIn or something like LinkedIn and connect with employers that way? Well, you can’t because then we (the Career Services) lose power! You have to join the platform we tell you, so we can still get paid because while you paid us way too much for your education, we still need to make more money on you and your hard work!

Is all of this sound familiar and accurate?!

Before “Karen” or “Ken” from Career Services at State U. loses her/his mind, let me just say, I get it. I know of many career services folks who truly want to help the Art History majors of the world get employed. Which they never succeed at, but keep helping those MBA’s and Engineers find a job…

Can I be real for a minute? in 2021, do we really think the function of “Career Services” at a university is necessary? If a kid can’t figure out how to get on Handshake, or LinkedIn and Indeed, shouldn’t that be kind of a sign of their employability?! I just hear from too many students that feel like Career Services did nothing for them in finding a career. In fact, that’s all I hear. I can’t remember ever hearing one story from a new grad going, “OMG! Career Services at State U. was so amazing and helpful!” Not once, in twenty-five years!

My Experience with Handshake

Recently, I was hiring a couple of recruiters for my team. We have had great success hiring new grads, we have a great university (Michigan State) in our backyard, so I was like how do we post a job for MSU students to see. Handshake has entered the chat.

The MSU Career folks said get on Handshake it’s easy! Which was mostly true, any idiot can figure out how to get on a site and register themselves. But using Handshake to recruit becomes a different story. First, we are a “recruiting agency” so right off the bat Handshake hates us. Plus, Handshake works off of a “Trust” score to get schools to work with you, which seems super fishy!

I wanted to hire someone directly for my company, not a client. We are a good employer. Good culture. Good pay. Local. Etc. Doesn’t matter, our “Trust Score” is low. How do we increase this Trust Score, I asked? Go to this one page and read a bunch of stuff that won’t help you at all! That is all. Can I just pay you some money and we stop this nonsense?!

The way it’s supposed to work is I have to reach out to a school and ask to be able to post a job and have access to their students. But the schools don’t know one employer from the next, so they rely on this “Trust Score” but no matter what you do, your score doesn’t really move that much. I’m assuming it would move if I paid them money, but that was the one thing I didn’t try!

I actually had local schools reply back and said because of your trust score we have a policy not to post your job! This is particularly hard for small employers who don’t have much activity. Thankfully, most schools would let you in if you made a personal plea and explained the issue. Still, this is a pain in the butt! This isn’t a good experience for anyone involved, the employer, the schools, or the students trying to get jobs.

Don’t take this as a slam on Handshake, it’s not! At least they are attempting to build something that is better than showing up on 500 campuses and doing traditional job fairs! The biggest problem is they left the Career Services still in charge! (BTW – I reached out to Handshake to try and get some help with this, I’m kind of in the space! No one would help, besides sending me to the same lame talking points on how to increase your trust score.)

There has to be a better way!

You would think because of the pandemic someone would have figured this out, and I’m sure even the folks at Handshake could figure this out if they had willing participants at the college and university levels. I’m still a bit salty that LinkedIn just didn’t do this because I’m guessing they had the size to just roll over career services and actually make something that works great for both students and employers.

The reality is employers are trying to recruit like it’s the 2000’s. Students are trying to get jobs like it’s the 2000’s. University and colleges are still trying to help like it’s 1970, and the technology companies are trying to find some sort of weird middle ground to keep them happy, but at least give students and employers something to work with.

Well, it doesn’t work. It sucks.

We (the recruiting industry overall) should be better than this. University and college career services should be better than this. We should have one global database for graduates and upcoming graduates to see all the jobs and internships, and for employers to see all the potential student candidates, and allow them to interact.

Instead, we play this game of who has the power, and who wants to make money on whom, and in the end, the students and employers are the ones paying the price.

Is there a way out of this mess?

I think the only way out of this mess is for students to recognize one brand as the place to go. The problem is, they don’t. If you talk to most university students about where they should go find a job, the answers are all over the board, and they mostly take direction from those at the university who are paid to help them.

A brand like Google or Apple might be able to break through the noise and stop all of this mess, but they are like any other company, there just isn’t enough money in it. I do think 100% of organizations would pay to have access to something like this if it was all-inclusive. Get every single public and private college to put in their students, give them a cut of the money based on being a part of the system, and everyone is happy.

I have yet to speak to one corporation’s Campus TA team who thinks the current situation is good. It’s a giant sh*t show, and university Presidents and Boards have no idea how bad it is.

Okay, rant over, that’s as long as a chapter in a book. Thanks for attending my Ted Talk. Now Fix the Damn Thang!

The Top Recruiters Never Get Surprised! #Recruiting101

If there is one thing I could give a new Recruiting Pro it would be this simple advice. No matter how prepared you think you are, you really only need to prepare yourself, for one thing, being surprised.

You don’t really get judged on your daily stuff.  Let’s face it, 99.9% of the time that goes off without a hitch.  You get judged on how you handle surprises.

Surprises make and break great Recruiting Pro careers.

There’s really only one way to prepare for surprises.  You need to expect that a surprise will always happen. That one interview you desperately want, who calls to cancel with ‘car trouble’, the candidate who backs out of the offer after signing the paperwork.  Talk about it, plan for it, and basically come to grips that it will happen.  Then it will happen, and you’ll be the only one not surprised by it.

The best Recruiting Pros I’ve worked with had this one common trait, they were unshakeable when surprised.

Almost like they expected it.

TransfoRM Recruitment Marketing Conference! Sign Up Today!

The World’s largest Recruitment Marketing Conference is Back for 2021! You can sign up for free here using the code “TIMTRANSFORM” to join TransfoRM 2021! The conference will be held on August 5th, coming to you live from DETROIT!

For the 5th year, I”ll be the Emcee for this event, and I’ll also be bringing you the 4th edition of my popular walk & talk series “Recruitment Marketing Bootcamp” and in this episode, I’ll be discussing AI in Recruitment.

TransfoRM is such a unique conference that has been breaking barriers since it was started five years ago, and it has created a community of some of the greatest Recruitment Marketing Professionals in the world. The interaction is tremendous, and I wish more conferences would take note of what TransfoRM does! It’s fast, fun, and informational. No back-to-back, one-hour sessions – sessions that are short and sweet, get to the point, and make us smarter!

Who else will be joining me for TransfoRM 2021 Virtual?

  • Torin Ellis – my friend and who I believe is the top Diversity Recruitment Strategist in the world, will be dropping his amazing knowledge on us!
  • Debbie Tuel – The Chief Joy Officer and the Queen of the Joy Roadshows for Symphony Talent
  • Chad Sowash and Joel Cheeseman – From the popular HR Tech podcast Chad and Cheese
  • Julie Sowash – Amazing disability advocate and star of the podcast Crazy and the King
  • Roopesh Nair – the CEO of Symphony, and one of the smartest dudes you’ll ever hear from in Recruiting!
  • Advent Health will bring you Talent Attraction Strategies you haven’t thought of!

What else? TransfoRM 2022 will be coming back LIVE and if you register using my code “TIMTRANSFORM” you will get $500 off the live event also, for next year, on top of getting into the virtual 2021 conference for FREE!

Even if you can’t make the live event on August 5th, sign up and you can get the content sent to you afterward so you don’t miss a minute of great ideas and motivation!

Recruiting is Not Marketing Nor Sales!

We love, I love, to say Recruiting is Marketing! I love Recruitment Marketing and the technology behind it, I think it’s brilliant! Recruiting is also not sales!

Why is Recruiting neither Marketing nor Sales?

What’s the core function of marketing and sales? To welcome as many people as possible into your funnel so that all of those people will buy your product or service, or give to your charity, etc.

In Recruitment, we are in the Rejection business!

Can you imagine you walk into a Cadillac dealership? You saw the commercial for the new SUV, you decide you want that SUV. You saw the billboard for that same car, heard the radio commercial, heck you even saw an Ad on Facebook, it’s almost like they’re listening to your brain! You’ve got a pocket full of hundred dollar bills and you walk into the dealership because today you’re driving away in that brand new, beautiful Cadillac SUV!

DealerNo!

MeUm, what?! 

DealerNo, we aren’t selling you that new Cadillac SUV, you’re not a Cadillac “Man”! 

MeA what!? 

DealerYeah, sorry, you don’t get a Cadillac today, we’re saving those for only certain people! 

It’s funny because we know this would never happen! I could walk into the dealership holding a severed head and the first words out of the salesman’s mouth would be “the trunk on our new sedan could hold a hundred of those heads!”

Recruiting isn’t Marketing or Sales, because true Marketing and Sales are in the business of ‘All’, not one. No one really gets rejected in marketing and sales if you have the means. In Recruiting, you could fit every single thing the organization is requesting and you will still get rejected. Recruiting is in the Rejection business, not the sales and marketing business!

If we/recruiting are in the Sales and Marketing business, we are in a really sick and twisted business! Hey, “Everyone” come and apply to our jobs, because I get really excited when I get to turn you down and say “no”! So, let’s not kid ourselves. Our business is about Rejection. Hey, come on over here and let me tell you what’s wrong with you, and then I’ll make the decision if we want you to be a part of our team or not.

Marketing campaigns sometimes try to fake like they’re being exclusive. “Only ‘you are being invited to buy this new SUV! You’ll be the first to own it! No one else!” Until next week when everyone will own it and actually have a better color than you. That’s not true rejection for those who don’t get it first, it’s just a game we play to increase demand.

So, why does this manner? 

If we know we are actually in the Rejection business, and we are, we/recruiters have to have an empathy level that is off the charts if we want to survive. Let me get this straight, you want me to talk as many people as possible into loving our company, then you want me to reject 99.9% of them? Yes!

To be able to do that and not drink yourself to sleep every night takes a really high ego or an endless supply of empathy towards all those great people who just wanted you to pick them, but your organization picked someone else, but they left it on your desk to share the bad news!

This is probably the main reason so many candidates never get dispositioned. We can all just crush only so many souls in a day! It’s easier to ghost candidates than to crush their dreams!

Rejection business is a hard, hard business to be in. Sales and Marketing are easy. Can you imagine how easy your life would be if you were able to give everyone the job!?

Why do managers hold on to bad hires for so long?

I’ve been very public about my philosophy on hiring. I do not hire to fire. In no way do I hire someone thinking “I can’t wait until the day I fire them!”, I don’t think any of us really think that!

I hire someone believing that with the right training, development, and support, they will be wildly successful! I own at least half of that equation, the person I hire owns the other half. Many times it works, sometimes it doesn’t.

The problem with my philosophy is “Sunk Cost”.

Sunk cost is an accounting philosophy that means a cost that has already been incurred and cannot be recovered. So, you’ve already sourced, recruited, and trained an employee. You’ve gone beyond training working to develop them. All those costs are now spent.

BUT – because you’ve ‘invested’ those costs into an employee, you are less likely to let them go believing you are more likely to get a return on those costs. In reality, there is absolutely zero evidence that shows you’ll get any return for future investment into that employee, but we really struggle to give up on them based on what we’ve already spent.

This is super common in the management of people resources!

Well, I’ve already dropped $50K into Tim, I guess another $10K isn’t that bad. When in reality that $10K is actually way better spent on another employee, and you fire Timmy!

I’ve known about Sunk Cost for a long time, but now there is actually scientific evidence to back up the fact we should be firing failing employees sooner:

“Sunk costs are irrecoverable investments that should not influence decisions, because decisions should be made on the basis of expected future consequences. Both human and nonhuman animals can show sensitivity to sunk costs, but reports from across species are inconsistent. In a temporal context, a sensitivity to sunk costs arises when an individual resists ending an activity, even if it seems unproductive, because of the time already invested. In two parallel foraging tasks that we designed, we found that mice, rats, and humans show similar sensitivities to sunk costs in their decision-making. Unexpectedly, sensitivity to time invested accrued only after an initial decision had been made. These findings suggest that sensitivity to temporal sunk costs lies in a vulnerability distinct from deliberation processes and that this distinction is present across species.”

This scientific study showed both humans and rats basically do the exact same thing. If we feel we have already invested a ton of resources in a task, we are more likely to continue pursuing this task even when all the evidence to that point has only shown failure!

This is Poor Performing Employee Management 101!

-You hire an employee.

-The employee gets trained and should have the skills to perform the job.

-The employee doesn’t perform the job, so you give more resources to help get them up to speed.

-The employee still doesn’t perform.

-The manager decides not to terminate the employee, but to continue to give more resources and chances.

Why do we do this?

You hired 3 employees before the failing employee and all three completed training and did the job successfully. We know the process works. So why do we not fire the employee?

Sensitivity to Sunk Cost. We are as dumb as rats when it comes to investing our own resources into failing employees. We act the exact same way!

It has nothing to do with the employee and our desire to give everyone a fair shot (I don’t hire to fire). It has everything to do with our own internal drive of not wanting to lose, what we feel we’ve already invested, even when all the data tells us future investment is akin to burning a pile of cash.

So, don’t hire to fire, but also don’t be as dumb as a rat and not fire someone who shows you they can’t and won’t do the job you hired them to do!