It is hard to imagine a company that does not see Recruiting and Selection as a critical component of their businesses’ success. Unfortunately, far too many companies do not have the financial wherewithal to put resources into HR, let along the recruiting function. Many small, family-owned companies struggle to survive on a limited budget. Their focus is to pay their workers, provide benefits (maybe), pay rent, and limit operational costs. Furthermore, these small companies often outsource HR to a third party or consulting firm to do the hiring and HR compliance for them. Their resources are stretched thin, such that they can only focus on breaking even each month. A surplus in the budget allocated to a marketing campaign, for example, may make a drastic difference on the balance sheet, and thus reflect positively on their month-end reports.

Conversely, in a high-volume production environment, where there may be a high-profile customer involved, the focus is to get applicants hired quickly without much thought to their experience or skillset. This is especially true in a tight labor market. I worked for a manufacturer that didn’t even complete background screens on new hires; they just hired them and waited for the results to come in weeks later. If the applicant didn’t pass, they were let go. The focus was to get warm bodies in the door, and product out the door and HR had to follow management’s request.  

When assessing the risk, the company is willing to forgo proper hiring practices in order to meet production demands. As a result, turnover in this industry is high and employees often leave jobs to work for $1 more elsewhere. Consequently, the company is spending more money on filling the open position, versus having done their due diligence in the first place.