The nine golden rules of organisational redesign
McKinsey researchers studied 1,323 organisational redesigns and identified nine “golden rules” which can significantly increase the likelihood of success. Learn what they are.
5min Read
Would you be surprised to know a vacant leadership position may cost growth businesses into the millions of dollars per week?
Imagine Qantas has purchased a brand new 787-9 Dreamliner from Boeing to service their new Perth-London route. They’ve taken delivery of the plane…but then let it sit in a hangar for a month because they didn’t have a suitably qualified pilot.
What would the cost be to the airline?
Rather than leave this hang as a rhetorical question, we turned to Google:
Based on a 30 day month, some back of the envelope math suggests:
In this simplistic example, not having a suitably qualified pilot for this route would cost Qantas $5.6 Million dollars per month.
So it’s not surprising that the cost of a vacant leadership position may also cost growth businesses into the millions of dollars per week.
Consider also the reality that the duration of many vacancies often exceeds 100 days, and you are talking about some serious financial impacts.
There are three key levers companies can pull to minimise the impact of a vacant leadership position:
And the research suggests that it’s not all about the money…
Your employer brand is defined by the public image of your company and how you’re viewed as an employer by former, current and prospective employees. In today’s increasingly competitive and candidate-centric job market, it’s absolutely essential for companies to cultivate a positive employer brand to attract A-Grade talent.
Companies with strong employer brands on average receive 50% more qualified candidates per vacancy – including ‘passive’ candidates who would otherwise be content to stay with their current job. This means less time wasted on unsuitable candidates and fewer hiring mistakes. 86% of peoplewould not apply for, or continue to work for, a company that has a bad reputation with former employees, or the general public.
Additionally, companies with a strong employer brand are able to reduce the compensation premium required to attract new candidates. Companies with strong employer brands are able to spend 10% less on base pay compared to companies with poor employer brands.
By investing in employer branding to aid attraction, you’ll be able to attract more A-Grade talent.
Think about it from a sales perspective: warm leads convert at a much higher rate than cold calls, right? Well, it’s the same for recruiting!
Companies that can attract more talent are able to hire that talent faster because they spend less time searching and selling – and more time closing candidates.
Companies that invest in employer branding are up to twice as fast as the rest of the pack when it comes to filling vacancies.
It is also important for companies to consider their executive recruitment processes to ensure that all stages are adding value (as opposed to unnecessary complexity) and being completed as efficiently as possible.
More engaged staff means increased productivity, higher company morale and lower employee turnover. Lower employee turnover means a reduction in vacancies.
Employee retention is about promoting employee engagement. It’s largely a combination of respectful treatment, fair compensation, a sense of mutual trust, job security, alignment with purpose and values and how often an individual can use their unique skills to deliver high-performance. Accountability for the majority of these items sits with the direct manager. As such, managers should make it a habit to connect with staff on a regular basis (we’re big fans of the weekly 1:1 for this reason).
Companies should ensure managers have a system for having regular conversations regarding company, team and individual objectives – and to celebrate wins.
Companies should encourage a healthy work-life balance. Unhappy employees are less productive, and more likely to result in turnover. Be proactive about asking employees what they need, and remain vigilant about looking for the signs of employee burnout.
If you ignore employer branding, you’re basically refusing to acknowledge that your company’s reputation is an important factor in attracting and retaining A-Grade talent.
You, therefore, risk losing top talent to your competitors, not being able to retain your best assets and spending far too much on recruitment and people generally.
Employer branding is statistically proven to make a real difference in how your company attracts talent. If you haven’t given employer branding a thought, then you’re already way behind the pack.
Creating a unique employer brand does not have to be costly, but this does have to be done in such a way that will separate your company from the competition in the highly competitive labour market.
We recommend starting with this question: “How is our company different from the competition in a way that matters to (prospective) employees?”
Employer branding is a long-term investment: a marathon, not a sprint. It is crucial to keep in mind that your company’s employer brand cannot be created or changed overnight. It takes time to develop and evolve in order to project an authentic brand.
It is, however, important to reducing the occurrence – and cost – of vacancies.