Why get help in making hiring decisions at the executive level?
Many companies make expensive hiring mistakes. Selection and hiring research has shown that most in-company interviews produce relatively poor results in terms of predicting a candidate’s future performance on the job. In fact, the ability to predict an executive’s management abilities in many cases is little better than chance. Research from industry sources also indicates that 30-35% of all executives entering a new position fail and 40% are no longer in the position after 18 months.
Making mistakes in hiring at the executive level is extremely costly. A poor hiring decision can cost as much as a million dollars or more considering search fees, relocation costs, signing bonuses, and loss of team productivity, not to mention outplacement costs and legal fees. Industry experts cite replacement costs for an executive at roughly 150% of the departing executive’s salary. Clearly, hiring the right person for a key management position can make a big difference in productivity and profit.