As human beings, we don’t like looking at our failures. So we tend not to keep score, or create hard metrics for our own performance. We’d rather not think about our mistakes and prefer to focus our attention on more pleasant things.
And while not keeping score may be pleasant, it’s also very expensive. Because hidden in your failures are some positively huge expenses, and some really valuable lessons about how to prevent similar mistakes in the future.
I recently helped a client analyze the cost of their hiring mistakes, and also the cost of their hiring delays. It took a few weeks to go back and gather some data about hires, terminations, and lag times between various stages of the hiring process. And it took a day or so to pull it all together and get it into a spreadsheet.
We found hundreds of thousands of dollars in (preventable) lost profit. We found more money than the entire annual budget for the HR department. Much of the lost profit was in places that were not even considered a “problem area” before we rigorously looked at the numbers. This is in no way unusual, in fact, I have yet to do one of these projects for a professional services organization where we did not find hundreds of thousands of dollars of lost profit. Now my client knows exactly where to focus their attention to recover all that lost profit – and that’s great news.
Numbers matter. So as a big fan of rigorous metrics, you’d think I’d be happy to look at my own data. I’m not, I prefer to avoid it. So knowing that, I set up a process where I have to look at it. Ellen, our Operations Manager, gathers and publishes our statistics regularly. Everyone in the company can see the data, and when I look at it I always find a surprise, some area where I can do better. I always learn something that I would never have learned otherwise. For me, failure is a great teacher.
So today, Ellen and I reviewed the retention statistics on our placements. I must tell you, this is much less fun for me than it was before the recession because we count layoffs against our statistics. (I think performance problems are often buried inside of layoffs, so we count them ‘against’ our numbers).
And although the search industry prefers to look at retention rates for 18 months, we look at them for 3 years - anything less just lets us off the hook too easily. Our promise is to help our clients hire people who get results, and it’s devilishly hard to measure real results and long term contribution during an executive’s first eighteen months on the job. So if we only counted retention rates at 6 months or a year, we would not learn much about how our placements actually contributed to our clients getting results.
So here are the retention stats on our placements:
- 91% are still on the job at 12 months.
- 90% are still on the job at 18 months.
- 85% are still on the job at 3 years.
I must tell you, these numbers were much better last year, so this was painful to look at, but you know what? I learned something by forcing myself to look at them. By sharing them with you, I am challenging myself to further improve next year …. and that’s the real reason you can’t afford not to keep score – it’s fuel for improvement.