Given today’s economy and hyper competitive global markets, executive selection and development is more important than ever before. The cost of leadership failure can often mean the success or failure of the entire organization. Every choice is a high stakes decision for organizations, their shareholders, and associates, so it’s extremely important to have accurate information available when making these decisions. Although most HR professionals are already aware of the consequences of not selecting the right people for key leadership positions in your organization, it may be difficult to convince others that investing in a reputable executive selection process can pay dividends (literally) in returns. Here are five helpful hints that can get help get others on board with utilizing such a valuable process.
- Emphasize the financial costs of not getting the right talent in the door. These costs not only include lost business, but also turnover costs. Estimates of executive turnover costs range from $300,000-$1,000,000 depending on the size of the company, and can increase dramatically the longer they stay with the organization. Accurate information on a candidate’s assets and limitations, as well as promotion potential, can help to make a more informed hiring decision.
- Highlighting the indirect costs associated with executive turnover can also be helpful. Everyone loses when a new leader fails. Goals aren’t met, opportunities are missed, and relationships may be irreparably damaged. Employee morale can also be negatively affected. The “soft” costs of derailment can be incalculable. The negative consequences of a bad hire or placement can continue long after the individual has been terminated.
- If you’re looking to develop your existing leadership team, then underscore the importance of assessment for better placement of current executives. Getting a clear picture of the strengths and liabilities of your entire leadership team can help ensure the right people are placed in the right roles. This can also help to defray the direct and indirect costs of derailment.
- Stressing the benefits of leader development and succession planning may also help to win support. Grooming internal candidates for the most senior positions is often the best succession plan. An individual who understands the organization’s culture and business goals can accomplish more in a shorter time than an outsider. Obtaining this information on external candidates can help them to hit the ground running faster and be promoted sooner.
- Finally, point out that knowing who your top talent is and what makes them so successful can help you to retain the right people and keep them fully engaged in their work. The upshot is that you will be able to better manage them, and they, in turn, can provide more significant contributions towards the continued success of your organization.
Even small, incremental improvements in selecting and developing your leadership talent now can result in big gains over time. Investing in a good executive assessment process can be much less costly than working with an executive search firm that does not utilize appropriate assessments, yet charges exerbient finders’ fees. Bottom line, investing in a good executive assessment process will increase an organization’s competitive advantage. Can your organization afford not to?