Cost Per Hire – Guess The Cost Of Hiring a Negotiator In To Your Business…

Posted by & filed under Advice, Industry News.

IMPORTANT – Before reading through the costs calculated below, have a guess as to how much you think an empty Sales or Lettings negotiator seat might cost an Estate Agency or Property Developer…

Write it in the comments below and see if you’re close!

So, I’ve been doing some workings on the cost per hire for Sales people within the Property sector.

Here are the potential costs of what might go into securing a suitable Sales Negotiator, Lettings Negotiator or Property Consultant…

  • Assuming that the position will remain open for 2 months and it will take this person 2 weeks to be fully integrated into the company – (based on a conservative £10k / month target) lost revenue – £25,000.
  • Job Advertised across multimedia platforms– cost of £1500
  • 600 CV’s will be received and need to be reviewed:
    • Typical review time is 3 minutes per resume – 30 hours of time.
  • 25 phone screens will take place (15mins / screening) – 6 hours, 15 minutes of time.
  • 8 face to face initial interviews will occur – 8 hours of time.
  • 3 face to face, 2nd, more detailed interviews will occur – 3 hours of time.
  • Background checks and reference checks will take – 2 hours total of time.
  • Hiring Manager earns £100k per year or £48.08 per hour (assuming only one person is involved in the hiring decision). Time invested of 49.25 hours = £2367.94.
  • Training and two-week ramp up of new employee – £1,500.

Total cost: £30,367.94

But wait…

I haven’t included the time lost from the core responsibilities of the hiring manager; they could be devoting a whole extra week per hire to generating revenue for the business.
Or they could be spending more time with the existing team to develop them and increase productivity and retention. This, in turn, would reduce the need to recruit.

Then, of course, you must also take into account the bad hires, people who aren’t right. These are the people who also take a wage out of the business and don’t generate revenue!
If you lose 1 out of 4 people hired at the end of their 3-month probation that would be £30k in lost revenue PLUS their wage cost of £4500 (3 months at £18,000pa) = £34,500 in total.
Spread that over the 4 placements = £8,625 / placement extra for each hire.
If that turnover is higher, I know many property companies and estate agencies where the turnover rate is as high as 1 in 2, that’s £17,250 extra/placement!

This makes the total cost per hire = £38,992.94 (or £47,617.94 if there’s a 50% dropout rate)

Of course, the biggest cost here is the loss of revenue – £33,625 / placement and the cost of bad hires.

So you want to see the best people as quickly as possibly but it’s important not just to hire anyone as you will be going through the whole process again, at more cost. Of course, recruitment companies can help but make sure you pick the right one – but before going down that route see my blog “recruitment agencies are a waste of time!”

The most important thing is getting the RIGHT person and do all you can to keep your BEST people. If you would like more information or advice on interviewing and selection as well as the best ways to increase retention – feel free to get in contact with me (alex@cherrypickpeople.com)

Really interested to hear if your guess on the cost per hire was close! And if you have anything to add or feel I’ve missed anything in my calculation please comment!

If you are interested in further reading on this topic here is an article posted in the Telegraph, it’s not specific to property sales people, however they calculate similar costs across various sectors…

http://www.telegraph.co.uk/finance/jobs/10657008/Replacing-staff-costs-British-businesses-4bn-each-year.html

5 Essential Tips to build a high performing business

Posted by & filed under Advice, Opinion.

5 Essential Tips to build a high performing business.  Running a recruitment consultancy means I have had the opportunity to meet and learn from some phenomenal businesses over the years, from small boutique SMEs to large corporates – I’ve seen it done well and also very badly!

I’ve always been fascinated with the development of high performing teams – I help build them for my clients but also, of course, have needed to create them for my own business.

I have spent lots of time studying this subject and below I have included the 5 key traits I feel your business must possess in order to outstrip the competition.

 

  1. Clear Vision

Your company must have a clear, ambitious goal. It needs a strong vision that excites and challenges the people within the organisation. A clear vision drives and aligns strategy, objectives and goals throughout the business.
Remember your vision is outwardly facing – it’s where the company will be in 5 years’ time – it should be ambitious and inspiring.

Top Tip: Test your vision – regularly (twice a year at least) test team members on the company vision and values, this is a great way to ensure full adoption!

 

  1. Leadership

Your leader MUST be honest and sincere and live with integrity – lead by example. The leader is essential in creating and driving the business towards the vision. A strong leader will exercise control, monitor team performance and establish internal processes that all team members must abide by (including themselves!).
A good leader will engage their team and develop people as “passion champions” and remove anyone who is not on the same wavelength.

Top Tip – Annually or Bi-annually run an engagement survey internally, to see how you and your leaders are performing.

 

  1. Learning Culture

All high performing businesses foster a learning culture; a culture focused on coaching rather than advising (i.e. developing individuals and empowering them to make a decision, rather than dictating decisions). They also invest in their team, offering extensive internal and external training.

Top Tip – Invest in your team – training mustn’t stop after the first few weeks / months. You will help develop future leaders and increase engagement and retention.

 

  1. Simple Organisation and Teamwork

Your business should always be striving towards simplicity, cutting out any unnecessary bureaucracy. You must foster company-wide sharing of information, knowledge and best practice.

TOP TIP – Audit your processes quarterly – ask your team anonymously what processes they feel could be improved and how?

 

  1. Hiring Strategy

Top performing businesses attract and retain the best people. The skill shortage across all sectors is immense at the moment and it puts a huge pressure on our businesses.
You need to have a clear, coherent plan for growth and recognise the time it takes to find and secure the best people. Securing the best talent is the most important objective for any business, do not cut corners.
And when you have them – you need to keep them! Ensuring you follow the 4 points above will dramatically increase retention.

TOP TIP: Have a clear proposition to put to potential employees, utilise your network and that of any trusted employee or partner. Develop your brand utilising social media

I’m really interested to hear what other business leaders have found to be key in their success – do any of these points ring true? Do you do something else that you feel has been essential to your success???