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A startling percentage of new CEOs fail within their first 18 months, according to many estimates—whether they come from outside or are promoted from within. Sometimes the new leader makes poor strategic moves, and sometimes the board makes an imperfect choice, overestimating a candidate’s abilities or hiring someone whose skill set doesn’t fit the context. But when succession fails, the responsibility is almost always shared. New leaders may be unable to read the political situation clearly or achieve the cultural changes their strategic and operational agendas require. Boards and key executives may not grasp the complex nature of CEO succession or consider the likely political and cultural challenges the new leader will face. A CEO transition is not the same as onboarding, which is a formal, short-term, agenda-driven orientation program of briefings and meetings. It is a longer process of interactions both formal and informal, planned and impromptu; it should begin when the board’s choice accepts the position and last for months after he or she arrives. The outgoing CEO, the chief human resources officer, and the board all have key roles to play in the process, writes the author, who describes best practices for each. The article includes an interview with Mark Thompson, CEO of The New York Times Company, about his own succession process in 2012.
One-third to one-half of new CEOs, whether they’re hired from outside or from within, fail within their first 18 months, according to some estimates. Why It OccursNewcomers misread the political situation or overestimate the organization’s willingness to abandon old behaviors. Meanwhile, boards and key executives fail to grasp the complex nature of CEO succession or set one-dimensional expectations of the new leader. What Can Be DoneA comprehensive succession process begins when a candidate accepts the position and lasts for several months after his or her arrival. The outgoing CEO, the chief human resources officer, and the board should all have roles in helping the newcomer navigate company culture and politics. The mood inside the boardroom was celebratory. For months the directors of this multibillion-dollar industrial and consumer-goods company had been searching for a successor to their longtime CEO. After interviewing multiple candidates, they’d unanimously voted to make an offer. The outside recruit—let’s call him Harry—had an exceptional record of growing sales while running a large division of a multinational known as a training ground for world-class CEOs. In interviews he was polished and poised. He asked insightful questions about the company’s strategy, raising issues the board hadn’t considered previously. His references were effusive. To the directors’ delight, Harry, who was simultaneously in the running for two other CEO jobs, accepted their offer—largely because he felt that this company offered the most autonomy and upside. The board announced the appointment at the annual meeting, in April; shortly afterward, the outgoing CEO departed, and Harry started. The directors congratulated themselves on a job well done. The arduous work of succession—their most important duty—was complete. A version of this article appeared in the December 2016 issue (pp.60–68) of Harvard Business Review.
The hiring process involves various stakeholders, methods, tools and metrics. Understanding how it works is the first step toward hiring great employees. Here are some frequently asked questions about the hiring process and tips on how to make your hiring more effective: Structuring the hiring process
Hiring timeline
Hiring teams
Hiring process costs
Rejecting candidates
Effective hiring tools
Improving the hiring process
Candidate experience
Want to learn how an applicant tracking system can help you hire better, faster and more cost efficiently? Find out with Workable, the world's leading ATS. Try our ATS Structuring the hiring processWhat are the typical steps in the recruiting process?The hiring process begins when a company identifies the need to fill a position and ends when a candidate accepts a job offer. The typical steps of the recruitment and selection process vary depending on the role and company. But, most hiring teams build their hiring process around these four stages:
Learn more about codifying the basics of your hiring process in our employee handbook template. How should we manage hiring process workflow?Using emails and spreadsheets to manage all aspects of the hiring process isn’t efficient. If you hire in low volumes, then project management tools are a good option. For example, tools like Trello help you see the hiring workflow as a series of steps and assign tasks to your hiring team. If you hire often and manage multiple hiring teams, consider investing in an Applicant Tracking System (ATS.) An ATS gives you a full view of every step of the process and each team member’s actions and feedback. Related: How to maximize user adoption of your ATS What is a hiring process flow chart?A hiring process flowchart is a visualization of recruiting steps and how they connect. A flowchart is a good way to communicate your recruitment policy in a concrete and memorable way to both hiring teams and candidates. For example, you could use a flowchart to present recruiting steps to hiring managers. Here’s a basic example of a snapshot of the hiring process: Hiring flowcharts can get more complex if you add more actions, decisions and phases, as well as different stakeholders (e.g. recruiters, candidates) and recruiting tactics (e.g. internal hiring.) Should I customize the hiring process for specific roles?Different roles require different hiring stages. Candidates for senior positions face multiple interviews and tests before getting hired, while entry-level candidates usually face much simpler hiring processes. Yet, customizing shouldn’t be overly flexible, since:
Try to find the balance. Give hiring teams a set of general steps and workflows to choose from for specific roles or types of roles (senior, junior, developers etc.) A recruitment policy or hiring flowcharts can be useful. If you’re using an ATS, you will already have a basic pipeline in place that your hiring teams can modify when needed. What are the steps in the job offer process?When you find your best candidate, it’s time to make them an offer they will want to accept. As a best practice, ask HR about a position’s salary range and benefits before you start advertising the role. To extend a job offer:
How many candidates should I have in the candidate pipeline?To determine how many candidates you should have in your candidate pipeline, track your qualified candidates per hire metric. This metric shows the number of candidates who make it past the first stage of your hiring process. If you don’t have enough of your own data yet, use your industry’s benchmarks to determine whether you receive enough candidates:
Recruitment benchmark data on qualified candidates per hire via Workable. Hiring timelineWhat is the average time to fill?The Society of Human Resource Management (SHRM) reports an average time to fill (the time it takes to make a hire after a position opens) at 42 days across industries. Workable’s Benchmark tool, which gathers data from thousands of customers, presents time to fill information categorized by industry and location. For example, the average global time to fill in Engineering is 59 days. Keep in mind that other companies may not calculate time to fill the same way as you do. Also, having a higher time to fill than other companies doesn’t necessarily mean that their recruiting process is more effective. Track time to fill internally and compare over time for better benchmarking. How long should the hiring process be?The average hiring process is 42 days long, according to the Society of Human Resource Management (SHRM.) Other studies report an average of 27 working days. Your industry’s average time to fill is a good benchmark for your hiring process timeline. If you take less time to fill a position than your competition, it could mean you reach the best candidates first. Go to lengths to make your hiring process more efficient, but don’t rush your hiring process or give in to “panic hiring.” How long are candidates typically on the market?The most qualified candidates are usually off the market in 10 days. An executive candidate, who’s more likely to be sourced or receive multiple offers, may be on the market for even fewer than 10 days. Keep in mind though that passive candidates, who are usually already employed, are a huge portion of the market. By reaching out to them and building relationships, you will fill some positions faster. And according to LinkedIn’s recent survey, almost all of them want to hear from a recruiter. Hiring teamsWho should be involved in the hiring process?The main players in the hiring process are the hiring manager and his/her recruiter. They make most decisions and should have a good working relationship. But, other stakeholders also offer valuable input:
Who should manage the hiring process?Hiring managers direct the hiring process as they are the ones to:
Recruiters are the coordinators of the hiring process and undertake tasks hiring managers may not have time for. But most importantly, they are there to move the process along and advise hiring managers when they need help making a decision. What steps in the hiring process do recruiters manage?Recruiters:
Though these are typical recruiter responsibilities, a good recruiter takes their role a step further. They act as advisors to hiring managers, track metrics to improve the hiring process and “own” the candidate experience. What steps do hiring managers oversee in the hiring process?Hiring managers are in charge of every step directly related to the role. They may:
Hiring managers should have complete visibility into each step of the hiring process. What steps in the hiring process does HR manage?HR employees:
Hiring process costsWhat is the average cost per hire?A recent survey by the Society of Human Resource Management (SHRM) found that the average cost per hire is about $4,100. However, several factors may affect each company’s individual average. For example, cost per hire depends on hiring volume. The more people you hire, the lower your cost per hire will be. This is because some fixed costs can be spread out over a larger number of hires. Also, some roles and industries (e.g. engineering) have longer time to fill and the accumulated costs result in higher cost per hire. Depending on the size of company and industry, a good benchmark is anywhere from $3,000 to $5,000. What is the cost of unfilled positions?An open position represents both actual costs and lost revenue. Costs may pile up if you hire a freelancer to do the job or pay overtime to hourly employees to cover extra work. Each position generates revenue. If it remains vacant, the company misses out on that revenue. There are ways to do complex calculations of the cost of unfilled positions, depending on the role. If you have enough data, liaise with the finance department to settle on how to calculate costs of unfilled positions. Keep in mind that a vacant position has significant intangible costs too (e.g. lost productivity or reduced quality of customer service.) What is the cost of a bad hire?One bad hire costs companies $17,000 on average, according to a Careerbuilder survey. To determine how a particular bad hire affects your company, look into:
Also, bad hires in executive positions can affect your company’s overall strategy and operations, resulting in long-term business costs and lost revenue. To avoid bad hires, invest in improving your recruiting process. Rejecting candidatesWhat is the best way to reject a job applicant?Sending a message to acknowledge a candidate’s application is good practice. And you can easily send a short bulk rejection email to all job applicants you disqualify using your Applicant Tracking System’s in-built email templates. Before applicants meet the hiring manager for a formal interview, their interaction with the hiring team is limited. So, you probably don’t need to personalize your rejection message. Send a simple email to let them know they won’t be moving forward. Tell them how long you will keep their resume on file and encourage them to apply to future open positions. Customize a template to save time or use your ATS’s default emails. What is the best way to reject a job candidate after an interview?Candidates who interviewed with your hiring team and met you in person expect a personalized and considerate rejection message. Since people may feel uncomfortable being rejected over the phone, email is a good choice. Use a template to save time but make sure you craft a highly-personalized email. Here are some tips:
Effective hiring toolsWhat tools can I use to evaluate candidates?Depending on the position, here’s a selection of tools to evaluate candidates: What tools can I use for interview assessments?Use effective tools when interviewing candidates to help you make faster and better hiring decisions. These tools could take the form of software, useful techniques or resources. Here are examples: Improving the hiring processWhat are some ways to make the hiring process more efficient?A more efficient hiring process moves candidates through the pipeline faster. Here are a few ideas to streamline your recruiting:
What tools can I use to improve the hiring process?The right tools can help you build a more effective hiring process. These tools (whether they are technology, methods or resources) may save you time, help you evaluate candidates better and enhance candidate experience. Here are a few examples:
How can I build a more effective hiring process?Use tools and methods to make the process more efficient and attract qualified candidates. Here are a few ways to revamp your hiring process:
Candidate experienceHow does the hiring process impact candidate experience?The hiring process is important in shaping candidates’ impressions of your company. Candidate experience involves various elements:
What is a good benchmark for application process length?Applications that can be filled out in less than five minutes attract more applicants. Sixty percent of candidates will abandon lengthy applications and thirty percent of candidates won’t spend more than 15 minutes filling out forms. Let candidates upload their resume and cover letter and ask them to answer only a few qualifying questions. What is a good benchmark for average interview process length?Interviews may last from 15 minutes (screening call with recruiter) to several hours (e.g. group interviews) depending on the format and role. A typical interview takes around 45 minutes to an hour. But several factors influence interview length. For example, the length of unstructured interviews may vary because interviewers might ask each candidate a different number of questions. Try to keep your interview process about an hour long. If you’re hiring for more senior roles, it can be fruitful to exceed this limit to discuss important issues. But, no matter the length of an interview, make sure you ask effective questions and make your candidates feel comfortable.
The average hiring process is 42 days long, according to the Society of Human Resource Management (SHRM.) Other studies report an average of 27 working days. Your industry's average time to fill is a good benchmark for your hiring process timeline. How long do hiring managers take to decide on a hire?There is no hard and fast rule about how long employers will take to get back to you with a job offer (or a job rejection). The hiring process can vary from employer to employer, the type of job you are applying for, and the industry in which you work. You could get an offer in a day or two, or it could take weeks. What is the last process in hiring?Onboarding is the final stage of your hiring process. It also marks the final stage of the candidate experience as your new hires transition to their new role. |