Hidden ROI

Hidden ROI: Hiring the right talent results in better retention

Return on investment is no always one-off concrete figure.

Much of the benefits can come over a longer period of time, the better the investment, the longer the compounding of the return will continue. When we are considering the recruitment of an individual into a business, this is certainly the case.

The impact that the right person can make is hard to measure, but you can be sure that the ripples will spread far beyond their immediate circle. They might leave after three years, but their decisions will live to take the company to the next level. Even so, it is true to say that it is best that fantastic performers stay for as long as possible.
There is an interesting conundrum here.

Not all fantastic performers are guaranteed to stay in a job for any decent length of time. Why? Because the job has to be an excellent fit for them. Otherwise, they will leave pretty swiftly for something more compelling. The key, therefore, is not blindly recruiting the best people in the market but ensuring that the best talent is matched up with the most suitable roles. It may be the case that the stand-out performer is not the stand-out candidate – if they are not happy with the challenge, they will not stick around long. If the second placed person is super keen for the role, they would probably be the better hire in the long run.


Eleven David Beckham’s in a football team would not win the Premier League.

Great teams are not collections of gold medal winners. They are a mix of gold, silver and bronze winners, but with one commonality. Eleven David Beckham’s in a football team would not win the Premier League. Instead, a successful team should include a mixture of skills and attributes that when brought and harnessed together, brings group success. A robust and prosperous workforce is one where everyone is willing to work their socks off to help their company be the best. An excellent example of this was evident last year when Leicester, against all the odds, won the Premier League. A team of few known stars before the season began, but a team where every single player worked tirelessly for each other to achieve a united goal and attain ultimate success. Talent without drive will walk out of the door.

The key for the most successful recruiters is therefore to understand the secret sauce of the hiring company. Why do their people love working there? What sort of individuals do well there? What kind of challenges will the role present (or not, as may be the case)? Only when a recruiter knows this, can they understand the type of person that they need.

Are we negotiating the wrong metrics?

Most recruitment processes measure ROI based on the costs associated with attracting and then offering an applicant a job. Businesses work hard to negotiate fees, and recruiters work hard to maintain fee levels. To me, this the wrong way to look at it. Retention should measure real ROI. It is no good hiring a superstar candidate cheaply if they leave six months later and you have to start the recruitment process again from square one. In this scenario, you pay two sets of fees, and it is likely you will be in the same place again six months down the line. By measuring retention, you can also measure value added by an employee over a length of time. This metric is significant because, in my opinion, businesses would be better off negotiating rebate periods or offering exclusivity instead. Employers rarely benefit from an excellent recruitment process when they offer a vacancy to multiple agents at low fees. The net return is likely to be lots of recruiters racing against each other to fill a position in a contest that rewards speed over quality and subsequently, poor quality hiring decisions to occur. Hidden ROI instead is found in the levels of retention, development and promotion of a successful hire where value is measured over a sustained period.

On a simpler note, think about this. If a job isn’t expected to require a significant amount of creativity over the next two years, why would you recruit a super-strategic innovator? I know that this sounds like a stupid question, but you would be surprised by the number of superstars hired to do a role that could be performed perfectly well by their side-kicks.

As we approach full employment in the UK (whatever that means with the rise of the gig economy), it is worth remembering that in an increasingly candidate-led market, people will leave sooner rather than later if they don’t feel that a role is challenging them. You then have to start the recruitment process all over again and you will probably more often than not fall into the same traps over and over. It is a demotivating cycle of attrition.
• So, how do you measure Recruitment ROI?

The bottom line?

Happy, United and challenged talent = stable workforce and lots of hidden, long-term ROI

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This article was written by Nick Day, Managing Director of JGA Recruitment – the leading Payroll, HR & Reward Recruitment Specialists.

If you are looking for expert talent in the fields of Payroll, HR or Reward, then please reach out for a 15 client engagement ignition call and I would be delighted to discuss how we can help.
Nick Day
Managing Director
James Gray Associates Ltd
Payroll, HR & Reward Specialist Recruiters
Email: [email protected]
Tel: 01727 800 377
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