Is the Cheapest Candidate Always the Best?

Cheaper candidates may save you some money in the short run, but the probability of having to properly fire, rehire and retrain a person is high.

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There are a wide variety of mistakes that can be made during the hiring process. According to an article titled Here’s How To Avoid The 7 Worst Hiring Mistakes, the biggest mistakes can be centered around over-valuing cultural fit, rushing the hiring process, not asking for references and no formal hiring process.

One big issue that is costly – both financially and from a business success standpoint, is hiring a cheaper candidate because of the notion that will save the company and help the company stick to the bottom line. That’s never the right reason, experts point out.

When hiring for a position that requires decision-making, judgment calls and strategy, it’s best to hire based on the quality of the candidate, versus the price, says Andrea J. Lee, founder of Thought Partners International, which operates ‘Wealthy Thought Leader University’ – an internationally-known company that has helped thousands of entrepreneurs upturn the status quo.

“Cheaper candidates may save you some money in the short run, but the probability of having to properly fire, rehire and retrain a person is high,” says Lee, author of “We Need To Talk: Your Guide to Challenging Business Conversations“. “Paying a little more in the beginning to ensure someone with higher executive skills will always be more economical in the longer run.”

Having said that, when hiring for a position that is task-oriented and limited in scope, with little to no need for coloring ‘outside the lines,’ paying more for a candidate can be a bit like paying more for a bus pass, says Lee. The regular bus will get you to your destination just fine. A luxury bus isn’t really warranted for certain kinds of jobs.

“The trick to choosing between a cheaper candidate and one requiring more of an investment is to understand your needs thoroughly, as well as to hone your recruitment skills – asking questions, testing candidates with scenarios and listening deeply,” says Lee. “These things together will allow you to judge whether you should hire cheaper or skip the angst and go for quality. Be sure to talk this through thoroughly with your team, even if it means a tough conversation or two.”

Cost containment continues to be a top priority for many organizations. Determining the level of candidate needed to successfully perform the position responsibilities and then tying that to a fair and market competitive wage or salary is a must to ensure that you not only attract, but also retain a strong performer, says Lisa Frame-Jacobson, President of Feature Talent Builders, a human resources outsourcing, consulting, talent delivery, search, training, placement and professional coaching firm.

“A more affordable candidate may have less experience, so it is important to consider how robust your training program is and if it can close any skill gaps,” says Frame-Jacobson. “A lower rate can sometimes directly correlate to less competency, due to less real-world experience.”

Consider the fact that a higher paid candidate may bring with them added depth and expertise that can only come with more years in the business and more experiences to draw from that equip them to solve your problems effectively and efficiently, adds Frame-Jacobson. At the same time, a lower price candidate may also be hungry to get the opportunity and could potentially show an even higher level of engagement as they strive to prove themselves, she adds.

But, as Frame-Jacobson points out, every individual has different needs to provide for their own livelihood and sometimes even a highly experienced one will take less pay for the right opportunity.

“Vet that out to ensure that if there is a variance, the candidate is able to articulate why it is still a good role for them and what most attracts them to the role,” says Frame-Jacobson.

While not consistent in application, the sentiment “you get what you pay for” does have merit, “but only through a thorough review of expectations and what needs to be achieved, taken against the individual profiles and accomplishments of the candidates, can you ensure that you make the right decision,” says Frame-Jacobson.

According to Jon Mertz, the author of Activate Leadership: Aspen Truths to Empower Millennial Leaders and founder of Thin Difference, a community of leaders connected by purpose, the only times when the cheaper candidate wins is when:

  1. The person is switching industries or functional expertise and is willing to be paid less to scale the learning curve of a new industry or proficiency.
  2. The person has the inner strength and positive mindset but not the necessary skills – yet.

“Without these attributes, the cheaper candidate will almost always cost more over time,” says Mertz. “Hiring for the right mindset, strength of character and willingness to learn will be more productive.”

Often times, these candidates will carry a premium because they have the proven results and approach.

“Hire the right attitude at the best rate and your business and teams will prosper the long haul,” says Mertz.

Kyle Krzmarzick, Vice President, IT West for RCM Technologies, Inc. (rcmt.com), a provider of business and technology solutions, says cheaper candidates are best only when they meet the quality standards you have set for your project/assignment.

“If you are ok with hiring a more junior person, go ahead and do it,” says Krzmarzick. “Candidate fit should always be considered when you are looking at budgets and your staffing plan. Not cost alone.”

Seems unanimous: The cheaper candidate isn’t always best. Nor is it always cheaper.

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