What does a bad hiring decision cost? The answer can be quite alarming. Studies have found that a poor hire at the mid-managerial level can cost a business more than thrice the amount of the employee’s salary. The figure can be even higher in some cases. For instance, the Society for Human Resources Management (SHRM) says that businesses stand to lose up to five times the employee’s annual salary in case of a bad hire.
HR decision-makers believe that recruitment practices can be improved by streamlining the process of candidate vetting or recruitment check, as cited by over 40% of recruiters. With digital transformation sweeping across industries, there is a growing trend in the HR sector of conducting online reputation checks by manual review or through automated services like Yoono.
The latter are third-party specialist tools that use AI technology to search online information and social sentiment surrounding the job candidate or search subject. They collate the results into simplified reports to help employers assess any reputation risks linked to the candidate.
More and more employers are performing online searches for additional information on potential employees, with 70% of recruiters using social media to screen candidates. This is because online reputation checks can identify areas of concern not noticeable in a CV or an interview. If done at an early stage of the recruitment process, even simple review measures like a KYC check can save businesses both time and money in the long run.
A digital deep-dive might be what makes all the difference between your next top recruit and a disastrous hire. But the process itself can entail considerable investment of time and money.
Manual recruitment checks cost time and money
Online reputation checks rank as one of the most effective ways to avoid bad hires, but the information-heavy nature of online platforms and information in the public domain mean that manual screening cannot be an adequate review mechanism anymore. Nor can such a time-consuming labour-intensive process be scalable across large companies.
It costs money and countless work hours to pour through pages of search results, and every extra minute spent in manual screening of candidates puts you behind a more efficient recruiter. Data shows that small companies and businesses spend around 40% of their working hours on tasks that do not generate direct income, such as hiring processes and profile checks.
Plus, manual recruitment checks can often be a hit-and-miss endeavour. On the one hand, it may lead to a hire who is a poor cultural fit for the organisation. On the other hand, there can be expensive consequences if critical details get overlooked amidst the noise of unusable data.
Companies in the digital age need better technology to trawl through large volumes of user-generated content. This is where professional reputation checkers like Yoono can save the day by automating the whole process of search and analysis whilst giving businesses a consistent report
The risk of litigation and reputation loss
There are other convincing reasons to use these services that go beyond the financial and logistical benefits. Manual recruitment checks have been known to create legal risks. An accidental breach in data privacy or an inconsistency in the screening process can attract a string of lawsuits, so employers need to take every precaution.
In 2020, taxi-hailing company Uber was sued in the UK and in Portugal for dismissals of some employees in contravention of the GDPR regulations. The company claimed the decision had been a result of manual review. This was not the first such incident. A few years earlier, the company had had to pay $7.5 million to settle a lawsuit for improper recruitment screening.
Legal trouble for businesses will inevitably spell reputation damage. This will compound the negative impact of an oversight that could have been avoided if a more efficient workflow had been used for candidate assessment.
The key to getting recruitment checks right lies in a workflow that imbibes consistency, proper documentation, mandatory consents and disclosures, and strict compliance with data privacy laws, all of which can be ensured by working with credible third-party services.
How online recruitment checks save time and money
An AI-driven search service like Yoono can streamline the process of reputation checks and infuse greater efficiency into the recruitment process. The smart algorithm trawls through online records and social sentiment, churning out personalised reports at a fraction of the speed and cost that would have been needed for manual review of the same information.
The benefits of over traditional recruitment checks are many:
- Saves time by conducting hundreds of searches within minutes
- Only searches through publicly available information
- Filters out unusable data and reduces false positives
- Removes search bias and presents impartial results
- Needs only a summary manual check at the end
- Produces well-formatted easily digestible reports
- Identifies concern areas and indicates red flags
- Complies with GDPR guidelines and doesn’t store any data
- Ensures the protection of candidates’ rights
- Provides ongoing monitoring for real-time insights
- Consistency of process ensures legal and ethical compliance
- Affordable and easy-to-use, unlike other sophisticated tools
- Works on a robust algorithm to provide extra layer of assurance
- Eliminates repetitive tasks and eases the burden of HR departments
With a large proportion of employee turnover being the result of bad hiring decisions, traditional recruitment checks are no longer a sufficient risk management tool. Companies today need to make smarter hiring decisions in order to save both time and money without compromising on ethical or legal standards.
Buoyed by these dynamic requirements, the use of automated intelligence services like Yoono is being counted among best practices that can help employers make the right hiring choice.