Unrequired Hiring bleeds Organizations

Companies cut on their EBITDA significantly due to many unchecked HR practices. Studies say loss to profitability due to poor decision making running much more than it is believed to be.

Unchecked HR practices [for which some sort of estimation can be done] making organizations sacrifice a major chunk of their profitability that may be in the range of 10 to 40% of the revenue depending upon industry and execution; more than organizations really achieve in profitability. It thus means that if organizations start making best use of HR practices, they can double up their profits without any additional efforts.

Coming back to ‘Unchecked HR practices’ making organizations bleed, one of them being  ‘Socialistic Hiring.’  

Socialistic Hiring here means the hiring which is primarily done to satisfy the ego of individual managers in organizations that is beyond the needs of business.

Why does it happen?

Reason, there is no tool at the hands of HR to scientifically substantiate their decisions.

I have seen in my career functional managers making irrational requests for additional hirings, which when confronted by HR, are turned down whimsically by CEOs & other senior executives with sarcastic comment that ‘you do not under business  & its ever-changing needs.’

Coming to reasons, functional managers do paint them with fancy business colors but underneath they are:

•           Trying to satisfy their own Ego to show off how big a team, they are heading.
•           Simply comparing themselves with other managers
•           Justifying their big titles, ‘I am a manager, hence need more & more people.’
•           Enjoying more influence in the company
•           Fighting for fiefdom.

Let me share an instance that happened during my being the Head of HR, when an employee made a justification for his promotion, saying that as his counterparts had been promoted to the manager level, hence he should be as well. Further saying that he will never ask for any subordinate under him. However, after only few months he started insisting for having people under him and interestingly his manager came out in his support, resulting in hiring despite reminding about circumstances under which he was promoted.

The strange was the second part of this episode, when the HR Manager refused to comply with the request, he was overruled by the CEO as he was presented the same request later  in a  ‘bright’ shining ‘Business Need’ wrapping paper, resulting into his granting concurrence with unsolicited  - unpleasant remark  ‘HR does not understand business.’

It is happening to HR daily in all the companies, despite knowing the truth that the ‘Workforce Cost’ is a major cost which if not contained, may make a company bleed profusely and eventually may become the reason of their closures. Still, organizations are careless about it. Organizations resort to many ill-famed practices like retrenchment and ad hoc terminations when they face strong headwinds due to high workforce cost. Studies reveal that:

“The cost of unnecessary hiring can range from ₹30,000 to ₹1.5 lakh per employee in India, and about $4,700 (₹3.9 lakh) globally, but the true cost is often much higher when you factor in wasted salaries, training, lost productivity, and eventual turnover.”

Direct Financial Costs include Recruitment expenses, Onboarding & training, and salary & benefits: Paying for a role that may not add value to the business. Hidden & Indirect Costs include lost productivity, workflow disruption, attrition risk, and opportunity cost.

The most negative side of unrequired or socialist hiring is:

• No ROI: The employee’s role may not generate revenue or strategic value.
• Morale issues: Existing staff may feel resources are misallocated.
• Turnover cycle: Unnecessary hires often leave quickly, restarting the costly process.

HR was helpless. No tool at their disposal that can reason out in front of the management unrealistic demands by the functional managers for more people in their teams. No means to let the Management know, the request made for hiring is unjustifiable. And making the management realize that HR understands business as well as others.

Prajjo has looked at this challenge constructively and has rolled out the Solution based on a ‘Copyright’ concept, called:

‘Job Description Overlapping Analyzer & Scorer [JDOAS]’

 

 

A Job Description Overlapping Score is a metric that measures how similar two roles are in terms of responsibilities, skills, and tasks. It helps identify redundancy, role conflicts, or opportunities for consolidation in an organizational hierarchy.

There is a well-accepted norm about the degree of overlapping between two positions in a hierarchy and it should be minimal and clearly defined. Certain degree of overlapping is recommended for better collaboration and continuity, but if responsibilities are not well distinguished, it can lead to confusion, inefficiency, and conflict.

“The ideal range is 10–20% overlap in responsibilities, enough to ensure coordination and backup, but not so much that accountability becomes blurred. It is the Ideal Range. More than this level of overlapping leads to Confusion in accountability, Reduced efficiency & Conflict.

Prajjo’s AI-Centric tool JDOAS, shall help all the decision makers to take effective decisions based on well calculated ‘numbers.’ The concept and algorithms make the tool comprehensive & error free. With Prajjo Software, HR will be having a critical tool that will make its reasoning well informed and assisted by the ‘Mathematical Reasoning and Numbers’ & eventually it will become nearly impossible for anyone in organizations to contradict HR recommendations & decisions.

A big reason for HR to Cheer. Make use of Prajjo’s JDOAS and ensure that you contribute to the success objectively.

Let us make HR, Primary. If the world wants numbers from us for our contribution to business, here we come, Strongly & Constructively.