Hotels are increasingly head-hunting management-level employees using a professional recruitment company, according to HVS Exectuive Search. The company is assuming that this is in an effort to minimise the risk of hiring the wrong
person.
Replacement costs are reaching an all new high.
In his presentation at a recent Hotelier India HR Conference held in Mumbai, Narasimha Rao, Head – Resort HR Operations, Mahindra Holidays & Resorts India Ltd estimated that the replacement cost of an INR 2,50,000 salaried employee is INR 3,60,000 (see table on the next page).
Assumption: A Rs.2,50,000 salaried employee leaving the company
source:
1. Cost due to a person leaving
a. Cost of filling vacant position 20,800
b. Cost of lost productivity 1,45,800
c. Cost of understanding remaining work, cost of exit interview 2,200
d. Cost of training 76,787
e. Cost of time the position is vacant 20,800
2. Recruitment Costs
a. Cost of advertisement 5,000
b. Cost of internal recruiters 2,200
c. Administrative cost 1,100
d. Cost of reference checks 800
e. Cost of pre employment tests 500
3. Training Costs
a. Cost of orientation, person conducting, materials 1,875
b. Cost of departmental training 40,400
c. Cost of person conducting training 30,800
d. Cost of training materials 2,000
e. Cost of supervisory time 1,712
4. New hire Cost
a. Cost of bringing the new person on board 5,000
TOTAL 3,57,774
HVS Executive Search has reported that demand through its London and Moscow offices has grown beyond the traditional
confines of CEO and board level positions as companies put more emphasis on recruiting quality staff at all rungs of
the organisational ladder.Executive search specialists were traditionally used for senior board level positions, with
other vacancies filled by internal recruiters or recruitment agencies.
“Hoteliers are now employing us to draw up a shortlist of candidates for less senior roles than they would have done
before in areas such as operations, sales and marketing, finance and development,” said Chris Mumford, managing
director of the London office of HVS Executive Search.
“This growing demand is for a highly focused style of recruitment that relies on our knowledge of the market and our
ability to lure talented individuals that would be a good fit for the organisation. Difficult market conditions have
prompted hotel companies to invest more in recruitment for a higher success rate,” he added.
