1. Right Fit, Right on
the Money

2. Jill Vershum, M.Ed. Heather Gipson, M.A.

3. This webinar will introduce strategies to help you bring time and
money savings to your organization by making the right hiring
decisions. This means finding candidates who are the right fit for job
competencies and organization culture, and increasing the odds of
your return on investment. We will specifically use case studies to
demonstrate organizational impact of selecting the right leaders
and front line employees. We will discuss how investing in tools and
technology help realize savings, and reinforce that the talent
management function is pivotal in resource allocation and right fit. In
the end, it doesn’t have to be a gamble.

4. There is a lot of money floating around when you are selecting executive and senior leaders
in the organization and need to get the right fit.
•Salary ranges can be hundreds of thousands of dollars, plus bonus and financial
incentives
•Benefits and insurance coverage (health, dental, vision, life, disability, holidays,
vacation)
•Pensions, stock options, 401(k), profit sharing
•Perks (health or country club memberships, special parking, car services)

5. •Search firm fees (quarter to one third of salary level)
•Employment contracts and severance, often negotiated at time of sign-on
•Relocation packages (spouse job search, moving expenses, mortgage differential, house-
hunting trips, temporary living expenses)
But that is just part of the equation.

6. There are culture and organization fit issues. When looking
at a pool of potential candidates you begin to hone in on the
right fit.
•Does the person have the right competencies?
•Will he or she be a good culture fit?

7. •How will your candidate fit with board
members?
•Will there be a good fit with the executive
team?
•Downstream, will the new leader be able to
select and plan the right talent?

8. So where will you place your money to increase the odds of hiring the right
fit? Let’s use two case studies to show you how different organizations
placed their bets for the right fit and the right money. We’ll start with the
money.

9. We decided to quantify just some of the costs of executive assessment. In
this company, the position was CEO. The base salary level was $550K. For
the sake of this case, we quantified some costs that are known:
• Search fee assumes 25% salary level, which is conservative—often as
much as 33%
• Sign-on bonus for this level averages 12% salary level
• Outplacement and severance are negotiated into the employment
agreement
• Outplacement assume 20% base (based on recent research by Manpower)
• Severance assumes 8 weeks, although often much more
Costs not shown in this example are benefits, relocation package, and other
perks
The cost of a single executive assessment is $2850. In this case, the company
decided to have the final four candidates go through the executive
assessment. But that is only part of the picture—the money.

10. Case Study I: Executive Selection, President/CEO
Salary Level $550,000
$405,160
Costs Not Shown:
•Relocation Package
Search fee
•Benefits Package
Sign on Bonus
Outplacement •Executive Perks
Severance
$2,850 $11,400
Some costs of executive Cost of single executive Cost for final four
selection assessment

11. Finding the right fit is the challenge. In this case study, our client was the Board President of
a national healthcare organization. They were hiring a President/CEO. They had used a
search firm and narrowed their selection down. But they had some strong business needs
they had to consider to help land the right person.

12. First, their bylaws required the President be a
physician. But they wanted to go beyond having the
credentials of a physician. They wanted leadership
competencies needed to be a successful CEO. They
wanted the selection assessment to have benchmark
data against other successful CEOs.

13. Healthcare reform was looming and they
needed a person who would stand out among
others and be able to lead in uncertain times.
The successful candidate had to be able to
diagnose and prescribe in the business arena.

14. BHI methodology was to interview the Board President
and members of the Board search committee to find out
what was needed for the right fit and what success
would look like.

15. We used Board interviews to understand the vision, desired culture, position and potential
derailers. We mapped the desired traits and success factors to our executive assessment. We
assessed their final four candidates using cognitive, personality and work style assessments
and an in-depth interview.

16. We equipped the Board President with valid and reliable assessment results—important to
physicians used to making decision on objective data. In fact, it was much like having a
stethoscope to see what is beneath the surface.

17. The results were that the board members were able to make a decision based on more
than a physician credential, the high intellect all four final candidates had, and more
than political alliances. The decision was based on who could who the leadership
competencies and interpersonal acumen to lead during tumultuous times in healthcare.

18. This client reported to us :
“Assessment results provided us with
an edge to work through the decision
with clarity and confidence.”

19. Back to the Case example—you might want to decide
where you would want to invest to get the right fit—
competencies, culture, team, business results.

20. Case Study I: Executive Selection, President/CEO
Salary Level $550,000
$405,160
Costs Not Shown
•Relocation Package
Search fee
•Benefits Package
Sign on Bonus
Outplacement •Executive Perks
Severance
$2,850 $11,400
Some costs of executive Cost of single executive Cost for final four
selection assessment

21. As business partners, it is ultimately up to you to piece this together—
increasing your odds of getting the right fit for the right investment.

22. Here is our second case example. Position is VP w/salary level of
$200K. Using the same assumptions as before, here a few of the
quantifiable costs.
•Search fee—assumes 25%
•Sign-on bonus—assumes 12% base
•Here we have added productivity or ramp up costs because
the organization said this would be required (assumes 3
mos @ 50% productivity)
•Outplacement (20% base)
•Severance (assumes 5 weeks) conservative
Not included again—relocation, benefits and perks.
Executive selection is $2850. This company had four final
candidates also, sourced from the search firm.

23. Case Study II: Executive Selection, Vice President
Salary Level $200,000
$158,231
Costs Not Shown
Search fee
•Relocation package
Sign on bonus •Benefits package
Ramp up costs
•Executive perks
Outplacement
Severance
$11,400
$2,850
Some costs of executive Cost of single executive Cost for final four
selection assessment assessments

24. In Case II, the client was a new President of division of specialty pharmaceutical
company. He was hired to grow the company from a $500M to $1B company.
Three past Presidents had not been able to do this. He was leading in an
economic downturn.

25. He needed to improve business performance by managing expenses, getting to more
efficient operations, and increasing revenues. He knew he needed to shore up his
talent and bring in talent where needed.

26. He wanted to leverage his assets across the organization, create more
accountability and interdependencies—which was a major culture change.

27. The president had a open VP Operations, a pivotal role to meet the formidable
business challenges. He was down to the final four candidates also. BHI provided
executive selection assessment to the final candidates. Using cognitive, personality
and work style assessments, we provided an assessment report for each person and
provided feedback on their fit in relation to the others on his team and the business
challenges. The results?

28. Results—first the President avoided a costly
hiring mistake as their top choice before the
assessment did not have some of the critical
competencies needed.

29. Results—second, the new team worked
together on reorganizing to maximize
efficiencies, increase interdependencies,
and manage expenses over the next few
months.

30. Results—third, the team met its next several quarter financials, after missing 3 out
of 4 of the past quarters. This case study speaks for itself on the value of executive
assessments for increasing the odds of right fit and right investment.

31. Let’s shift gears now to a different segment of your workforce. When you look closely
at your larger applicant pool, do you notice the subtle differences from one person to
the next? Can you identify those that will “absorb” more information and soak it all
in during training? How do you go about finding the right fit and impacting
retention?

32. This organization set out to raise retention rates by implementing a
competency-based selection system designed by BHI to identify top
talent in their manager candidate pool. Upon implementation,
management turnover was costing the organization $1.3 million
system-wide based on their estimate of roughly $5000 per manager
turned over. Over a three year period, the selection system which
contained a behavioral interview developed by BHI and one of our
assessments led to dramatic turnover reductions.

33. Manager Turnover
23%
(net cost = $1,350,000)
19%
Annualized Turnover Rate
(net cost = $855,000)
14%
(net cost of $630,000)
Year 1 Year 2 Year 3

34. $720,000

35. Do you hate to see money going down the drain as a result of hiring decisions that aren’t
based on what makes for the right fit? So was this next organization….

36. With overwhelming turnover rates in the hourly employee ranks, this
company implemented BHI’s assessment designed to identify key
talent for hourly positions. Just one year later, hourly turnover was
reduced from 164% down to 107%, saving this organization
approximately $60,000 per location…

37. Hourly Turnover Reduction
Turnover Rate 164%
107%
At Implementation After 1 Year

38. …which equates to system-wide savings or 5.6 million dollars in replacement costs .
$5,600,000

39. In order to achieve these results in your organization, your selection system must be based
on a solid foundation. Meaning, it must be aligned with the company’s current vision,
business strategies and hiring goals or it will likely not produce the level of talent that you
need to sustain growth and elevate the brand….Is the talent in your organization
deteriorating? Can it deliver to your customers what you expect, thus driving
organizational performance?

40. So how do we know what is the “right fit”? Competencies or key performance areas
provide selection tools with a framework for evaluating knowledge, skills and abilities of
your applicants, based on what is crucial for the job.

41. Competency based assessments enable you to zero in on applicants who really have
what it takes to excel in the job and grow and advance with the business.

42. Yet with so many applicants to pick from, do you often wonder which direction you
should go? Do you feel as though you need a road map…

43. to help you identify the best talent to place in front of your customers?

44. We believe you have better ways to spend your time and money, so BHI’s solutions
are designed to find that “right fit” and eliminate costly hiring decisions…

45. If you’re up to your eyeballs in resumes, applications, background checks, etc….why
not simplify and streamline your applicant tracking process? Cut through the clutter…

46. …and get down to the candidates who demonstrate the necessary abilities and have
passed the “right fit” test…

47. So why not let systems do more of the work for you? With a minimal investment in an
applicant tracking system, you just may be able to save your company Millions by not
spending time and resources on unqualified candidates and bad hires…not to mention
protecting your company from employment discrimination lawsuits.

48. To win at this game, you’ll have to bring hiring solutions to the table that are aligned with
your business strategy (thus competency based) and integrated with other people/HR
systems.

49. Using assessments as one piece of information to make your selection decisions will
likely stack the odds in your favor, saving time, money, and improving the quality of
selection by getting the right competencies and right fit.

50. In summary, investing in selection tools and technology increases your odds of finding the
right person with the right competencies for a minimal investment. It saves you time. It
puts YOU in control.

51. Placing your bet on Assessment
Impact at Executive Level
• Investment = 3-7% the cost of making the wrong choice.
• Selecting a leader who can meet financial goals when others
have failed.
Impact at the Management and Hourly Levels
• Significant decreases in turnover
• Large scale savings in replacement costs: $720K-$5.6M

52. Right Fit, Right on
the Money

53. Batrus Hollweg International Forum
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