Crunch those numbers

Strong economic research demonstrates a lucrative return-on-investment (ROI) when thorough screening processes are implemented during recruitment. Investing more upfront can lead to a five-fold return on investment. Five-fold! And that’s considered a conservative estimate.

For those of you without an in-built calculator, you may be wondering how does the equation work? Consider that ROI is a simple ratio of return, divided by investment.

RETURN = new revenue or enhanced productivity + reduction of existing expenses and potential costs

INVESTMENT = upfront expenses + time

Think of a time where you’ve hired or worked with someone who was not the right fit for the job. In 2003, Barada proposed that the wrong hire costs three times the annual salary amount for that position. Three times! This includes costs for replacing the employee, training a new employee and management time.

Let’s delve a little deeper into that calculation.

Consider the following ten categories where costs can be negatively affected through employing someone who isn’t the right fit:

  • Productivity = lower
  • Teams’ morale = down
  • Customer value = Reduced
  • Theft = over 10% of employees are estimated
  • Absenteeism = increased
  • Accidents = significant in both fiscal, litigious and health terms
  • Management time = Consumed
  • Termination = can be costly
  • Recruitment = costs for re-advertising, time spent
  • Training = more time lost and reduced efficiency

Traditional background screening such as questionnaires and police checks may weed out workers with glaringly obvious red flags. These measures are now known to be simplistic and grossly inadequate from both an economic and health perspective.

I’m not saying throw the baby out with the bath water – they form part of the picture – but they should not be used as stand-alone measures for recruitment decision making. Basing recruitment and job matching decisions on these measures alone can have far reaching consequences for both the worker and the workplace.

Reducing business risk by improving screening processes

Let’s hone in on one area listed above – workplace accidents. Numerous factors are always involved when accidents or injuries occur in the workplace. The real question is how do we minimise this risk and maintain safety as the key priority?

Research proves injuries can be prevented through better pre-employment screening processes. This starts with understanding the work involved. What are the job demands of the position which needs to be filled? Once this is understood, then appropriate job matching can occur.

Matching employees’ capacity to job demands is crucial. Pragmatically speaking, how does this occur? Pre-employment assessments.

Pre-employment screening highlights any discrepancies between the workers capacity and job demands. When conducted appropriately, it is proven to predict long-term risk of musculoskeletal injury.

A three-pronged assessment approach is taken to understand an individual’s:

  • Medical risk

  • Impairments present

  • Physical capacity to meet job demands

Visualise, for a moment, trying to fit a square peg into a round hole. Tough? Exhausting? A bad match? You bet! Force it and you will not only damage the peg, but also the hole. Now, apply that analogy to a workplace scenario where the worker is the peg (more specifically, their current capacity), and the workplace (or job demands) is the hole.

Consider a scenario where a worker needs to lift heavy plasterboard off a running conveyor belt and flip it onto another surface. The board may weigh up to 15kg. This action needs to be repeated every 20 minutes for 8 hours. The potential injury risk from placing someone who does not have the physical ability to do this task is real.

The Benefits

Worker benefits:

  • Reduced personal injury risk

  • Confidence they can physically do the job

  • Improved morale knowing they work for a proactive business which cares for their health from day 1

Workplace benefits:

  • Reduced injury risk

  • Fewer work cover claims

  • Reduced insurance premiums

  • Improved workplace safety culture

Be a business that takes a proactive approach to workplace health and ensure your pre-employment screening processes adequately address risk. Link with Employ Health for expert management of your workplace health and safety risks.

 

References:

Drysdale, D., Bonanni, C., & Shuttlewood, P. (2010). Return on investment for background screening. International Business & Economics Research Journal (IBER), 9(11).

Pre-employment examinations for preventing injury, disease and sick leave in workers. The Cochrane database of systematic reviews. 2016(1):Cd008881.