Date:01/01/2007 URL: http://www.thehindubusinessline.com/2007/01/01/stories/2007010102200400.htm

Back `Bad hire' costs zoom in tech sector

V. Rishi Kumar

`Structured processes help in better selection process'

Hiring woes
While there are both tangible and intangibles issues to bad hire, the intangibles could far outweigh and could even impact brand reputation.
In a sector faced with huge hiring requirements, companies often do not have the capability to judge a candidate in say,10 minutes of interview.

Hyderabad , Dec. 31

Did you know that a bad hire in IT and BPO sector could cost an enterprise about Rs 3 lakh?

The bad hire issue, which human resource managers across the tech sector in the country are seeking to address, varies from one enterprise to another depending upon their approach.

A bad hireis a recruit — a fresher or someone who has put in up to four years of experience, but simply does not fit in the organisation business plan and work strategy. This could be in spite of customised training.

While there are both tangible and intangibles issues to bad hire, the intangibles could far outweigh and even impact brand reputation as these professionals are deployed for work for third parties. The Co-Founder and Director of MeritTrac Services, Mr Madan Padaki, told Business Line that this issue assumes importance as India is no longer a mere cost arbitrage centre but one where outsourcers expect quality.

In a sector facing huge demand-supply constraints as the number of employable candidates is far lower, and with huge hiring requirements, companies often do not have the capability to judge a candidate in say 10 minutes of interview.

Say for instance, a company recruits about 1,000 people a month. And this means an average of about 30 recruits a day of about 300 to 400 people interviewed that day. This leaves less than 10 minutes per candidate.

A bad hiring decision means sourcing cost that includes campus, consultants, portals, scheduling an interview, cost of induction and boarding, induction and training costs and more importantly cost of new hire as a replacement.

Worse than fake CVs

In fact this goes beyond fake CVs, which the sector had been facing lately.

Tech sector functions like a suction pump in campuses. But after training, most companies realise that about 10-12 per cent of the recruits are still not employable. This is how the bad hire costs escalate, he said.

As a company that partners with about 160 enterprises assisting them with structured formats for selection, MeritTrac believes that these structured processes do help them bring down bad selection process, which tends to vary from person to person.

MeritTrac, which now employs about 300 people across locations in India, is in the process of expanding its operations and plans to scale up headcount to about 600 by 2007 end and broaden the portfolio to cover other industry verticals of manufacturing, banking and retail.