Losing money on Leadership

I just read an interesting article on the Financial Times web site entitled, "Rise of a Headhunter." The article is about a man named Kevin Kelly who is the head of a large executive search firm. In the article, Mr. Kelly talks about a study conducted in his office that was based off of 20,000 executive searches. Mr. Kelly goes on to say, "We’ve found that 40 percent of executives hired at the senior level are pushed out, fail or quit within 18 months. It’s expensive in terms of lost revenue. It’s expensive in terms of the individual’s hiring. It’s damaging to morale."

40%! That is a huge number and an even higher dollar amount. The direct and indirect costs of turnover are often estimated to equal roughly three times the salary of the actual position. This number increases the higher up the corporate ladder you climb. In today's world and economy where budgets are tight and spending is being cut, companies cannot afford the added expense of hiring a new employee only to have him/her leave or under perform and be forced to leave within the first 18 months. Companies can greatly reduce this number and select and retain top talent if they remember a few simple rules.

1. You need to know more about the person then what his/her resume says or what you can find out in an interview. - How do you do this? Benchmark the position so you know exactly who and what you are looking for. Then assess each candidate against your benchmark to ensure you are selecting the person who brings the right behaviors, values, and skills to not only the position, but to the company as a whole.
2. Provide training and coaching. - Review the employee's assessment and identify any development opportunities. Make sure the new employee understands what leadership looks like in your company. Provide a solid foundation for the employee to begin with and your chances that he/she will succeed will naturally increase. One-on-one coaching is also a great way to invest in the long term growth and retention of any new employee.
3. Remember, you're not an island. - You and your company need to be experts in your industry and constantly monitor the needs of your customers. You don't need to keep up-to-date on the latest assessments or selection methods. Your top leadership and HR team does not always have the time to provide the required training and coaching for every new employee. Hire an expert who can save you time and money and focus your time and energy on your business and your customers.