When the job market tips in favor of employers, great candidates seem to grow on trees. The line of applicants winds out the door for every position and everywhere managers look, skilled applicants seem to be clamoring to step into any position that will help them pay the bills. Inexperienced managers with little thought for the future tend to get swept away by this bounty. They scoop up overqualified candidates for half what these candidates are worth, put them through endless hoops during the interview process, and hire them without providing minimum benefits like insurance. In other words, they act as if the golden years will never end. Everywhere these giddy managers look, they seem to see savings in staffing and labor costs. And lining their shop floors and offices with cheap labor seems like the obvious choice, if not the only choice. Don’t be one of these employers.
Investment advisors often tell us not to “invest emotionally”, but to stay steady at the wheel. Ignore swooping and dipping stock market indexes, and recognize that what goes up comes down (and vice versa). The same principle applies to low cost hiring during a recession. If you ignore this advice, here are just a few of the ways you expose your company to risk:
1. Underpaying an employee may save a few nickels and dimes at the outset, but it does nothing to support motivation, engagement, or a positive workplace culture. The end result is inevitable: as soon as better opportunities come along, the best of your underpaid employees will leave. Only the desperate will remain. And while you wave goodbye to your most valuable talent, you’ll have to watch your labor savings be swallowed up by the cost of high turnover.
2. Denying employees the basic elements that support quality of life, like health insurance and fair wages, will not pay off in the quality of their work. If you don’t take a position seriously enough to pay a fair rate, your employee will probably not take it seriously either. And of course, the health of your employees will have a direct impact on their productivity.
3. Taking too long to make hiring decisions, sending your candidates though absurd hoops, or letting positions stand open while you hold out for perfection are also not ways to run a successful business. These moves will only put off inevitable compromises and alienate your new employees in the process.
4. The job market may seem overcrowded and competitive, but this isn’t the case for the very best applicants. These top contenders will always have other options, so regardless of the state of the marketplace, it’s a good idea to keep the screening and hiring process efficient and treat all prospective candidates—and current employees– with respect.
Before you decide to save on labor by cutting corners with your hiring and retention strategies, think twice. Reach out to the staffing experts at Techneeds for ways to take advantage of a favorable market without overreaching and making avoidable mistakes.