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Develop Current Talent or Hire a New Employee?

June 3, 2014

Question:  Does developing current employees cost less than hiring a new employee?

Answer:  Yes and No. Although training is generally effective it may not always be the solution for the problem of an underperforming employee.

According to the National Association of Colleges and Employers’ Recruiting Benchmarks Survey, the direct and indirect costs of recruiting a new college graduate total $5,134 (Tweet this stat).This is even likely to be an underestimate of the true costs associated with a new hire because most new hires still need to be trained and they may not fully contribute to the organization for weeks or months afterward – and that’s if you hire the right person.

481015141The answer to the question above can be surmised by considering what would happen to an organization or work group if that money were used to deliver training to current employees instead of hiring. Training classes can deliver valuable and specific information to a group of people at one time. Looking only at cost, one is likely to conclude that it is less costly to develop current talent instead of employee replacement.  Additionally, training just feels like the right thing to do. Why shouldn’t you work with underperforming employees and maximize their potential?  However, the answer isn’t always so simple. It depends on why the employee is underperforming.  Is the employee struggling because of a lack of job related knowledge or skills, or are the struggles related to more core issues related to the person’s personality or behavior?

Our personalities are established early in life and have been shown to be stable over time. By the time we reach adulthood we tend to exhibit consistent behavioral patterns, driven by our personality.  For example, people low in conscientiousness (which by the way, tends to be the most predictive personality factor for job performance across positions) will always struggle to meet deadlines and follow up on tasks without expending a great amount of effort to overcome their natural tendencies.  Imagine an employee with a very negative attitude who is also resistant to change.  Will training change the way this person perceives the world and make him/her open to change? It is unlikely. Personality is generally considered to be untrainable – some aspects more than others.  Because of this, training dollars would likely be most effectively spent on employees who are struggling due to lack of job-related knowledge or skills – things that can improve with practice and feedback.

Does this mean that you should fire anyone that has flawed personality characteristics? No. If that were the case, then no one would have a job. It depends on the issue and how much it is impacting the individual’s job performance. These are tough decisions to make – so, the best strategy is to hire the individuals that already possess the core personality attributes that are less trainable (e.g. conscientious, initiative, adaptability) and necessary for successful job performance by using a professionally developed assessment.  Technology and organizational changes will always generate the need for employees to learn new knowledge or skills. Use pre-employment assessments to identify individuals with the core traits that cannot be trained and focus your training budget on those skills that can be improved to maximize your employee talent.


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Brian Dishman Brian Dishman is a Senior Consultant at PSI. He educates safety leaders on the internal factors that impact employee safety. Brian focuses on safety leadership, safety culture development, and the psychology of safety.