In the financial services industry, an ineffective recruitment and selection process can cost more than just money—it can waste time, hurt your reputation, and create compliance risks. At Godfrey Group, we understand how poor hiring decisions can lead to challenges like high turnover, disengaged employees, and even potential regulatory risks. We’re sharing our top strategies to help you avoid common hiring pitfalls and highlighting why a well-executed recruitment process is essential for building a thriving, compliant team.
The Risks of Poor Recruitment: Why It Matters
We’ve all heard stories about hiring processes gone wrong, but the real consequences of poor recruitment and selection can be more damaging than you think. One of the biggest risks is turnover. According to a Harvard Business Review study, 80% of employee turnover is due to bad hiring decisions, and 45% of bad hires are attributed to a lack of process. At Godfrey Group, we’ve had businesses come to us after experiencing the costly impact of poor hiring decisions.
Turnover caused by these missteps doesn’t just disrupt cash flow—it often wastes critical time and resources across HR, payroll, and legal departments. We specialise in refining the recruitment process, ensuring businesses avoid these pitfalls by selecting the right candidates from the start, ultimately saving time, money, and preserving team morale.
The Cost of Hiring the Wrong Candidate
When financial services firms get it wrong, they don’t just pay with time—they pay in cash. It’s estimated that hiring the wrong employee can cost up to 30% of an employee’s first-year salary. If that weren’t enough, compliance risks are especially high in the financial services sector. Failing to properly vet candidates for roles requiring regulatory or compliance expertise can result in significant legal and reputational damage.
Remember the Myer scandal? A newly appointed Group General Manager for Strategy and Business Development was fired after his first day on the job for falsifying his entire background. Not only did this result in embarrassment for the company, but it also raised serious concerns about their vetting process. Stories like these illustrate how the effects of poor recruitment and selection processes can damage your business’s reputation—and word travels fast in the digital age.
The Impact of Bad Hiring Practices on Candidate Experience
The consequences of a bad recruitment process aren’t limited to poor hires. A bad candidate experience can hurt your brand and make it difficult to attract the best talent in the future. All too often, candidates are left “hanging” as businesses drag out their decision-making process, only to drop them like a hot potato when they’ve found someone else.
In our experience at Godfrey Group, we’ve found that businesses expect candidates to maintain high levels of professionalism during recruitment, but it’s essential for companies to do the same. In a closely networked industry like financial services, poor communication or a lack of transparency can leave a negative impression, hurting your reputation. Meeting these standards not only benefits candidates but also strengthens your standing in the market and helps attract top talent.
How to Mitigate Recruitment Risks
So, how do you avoid the pitfalls of poor recruitment and selection? Here are some key strategies:
1. Prioritise a Robust Hiring Process
A well-defined recruitment process is your first line of defence. Take the time to ensure that every step of your recruitment process—from job description to final interviews—is thorough, clear, and well-structured. At Godfrey Group, we help businesses refine their process and communication, advise them on where to negotiate and what to keep non-negotiable, and ensure both parties are aligned for a positive hiring experience.
2. Improve Your Candidate Vetting
As we’ve seen with high-profile cases like Myer, failing to properly screen candidates can have long-lasting consequences. Look for candidates who have strong regulatory knowledge, integrity, and the ability to navigate complex financial regulations. Godfrey Group can help you assess candidates’ regulatory knowledge and integrity by offering thorough background checks, detailed reference checks, and tailored interview questions. Our expertise ensures you’re hiring professionals who meet the complex compliance requirements of the financial services sector.
3. Focus on Cultural Fit and Long-Term Value
While technical skills are essential in financial services, it’s equally important to find candidates who align with your company’s values and demonstrate the right soft skills. A candidate who demonstrates a commitment to learning, strong communication skills, and adaptability will be able to navigate changes in the financial services industry, making them a long-term asset.
By hiring for cultural fit and future potential, you can foster a more engaged, loyal workforce, reducing turnover and creating a team that’s invested in your company’s success. Investing time in the right candidate may take longer, but it pays off in the long term by reducing turnover and fostering a more engaged workforce.
Why You Should Care: The Effects of Poor Recruitment
The effects of a bad hiring process are far-reaching. In addition to financial losses, a bad hire can cause:
- Reputational Damage: Word spreads fast in financial services. A poor candidate experience or a high turnover rate could discourage top talent from applying for future roles.
- Regulatory and Compliance Risks: Compliance roles are crucial in a tightly regulated industry like financial services, and one wrong hire could lead to costly regulatory violations and legal issues.
- Missed Opportunities: If your recruitment process is slow or ineffective, you could miss out on high-calibre candidates who take other offers. A bad hire can also lead to missed commercial opportunities, slowing down your business growth.
Build a Stronger Team with the Right Recruitment Strategy
The recruitment process doesn’t have to be a minefield. With the right approach, you can avoid the cost of hiring the wrong candidate, foster a positive experience for prospective candidates, and build a team that drives your business forward. At Godfrey Group, we specialise in ensuring that businesses find the right people. Our honest, transparent approach is designed to reduce turnover, improve cultural fit, and ensure compliance with industry regulations.
If you’re ready to take control of your hiring process and avoid the consequences of poor recruitment and selection, contact Godfrey Group today on 02 8004 9350.
