"Hiring is broken: tenure and turnover haven’t improved in over 30 years. Small businesses in North America are spending over $60 billion per year, but no capable hiring solution exists." That's what a Canadian-based start-up company ClearFit says. And they are endeavoring to help organizations find the best person for the job by predicting their success.
Every employer has suffered the consequences of making a bad hire. The U.S. Department of Labor estimates that, in addition to their salary, the average cost of a bad hire is 30% of their first year earning potential – and that’s if the hiring mistake is recognized and corrected within the first six months.
The U.S. Dep't. of Labor estimates that, in addition to their salary, the average cost of a bad hire is 30% of their first year earning potential – and that’s if the hiring mistake is recognized and corrected within the first six months.
The longer it takes you to recognize and correct your mistake, the more your costs climb and the greater the impact on your entire business.
ClearFit says they set out to change that. The company claims over 8,000 clients have used their patented, automated software and algorithms to match the right candidates with the right jobs, based on behavioral/personality fit.
And they further claim a success rate five times higher than traditional hiring.
When someone applies to a ClearFit client's job posting, they say their system takes an in-depth look at their personality and matches them against the employer's experience and education requirements.
Based on the results, ClearFit provides a "fit ranking" for each person: Strong Fit, Fit, Weak Fit, or Distortion.
It has been awarded a U.S. Patent for this matching software, and recently closed on a $7 million financing round to bolster their own engineering and marketing staffs.
The company will also be adding "HR coaching staff positions" to help customers navigate the transition to a software-based hiring solution.
Company co-founder and CEO Ben Baldwin said ClearFit offers small businesses the kind of large enterprise software-based candidate evaluations that have traditionally been out of reach for them.
[caption id="attachment_21162" align="alignright" width="183" caption="ClearFit CEO Ben Baldwin"][/caption]
Baldwin also opines that, in general, most people, especially those working in smaller companies, are not very good at hiring. To back that up, he cites statistics that show on average, 45% of new hires leave within the first six months of employment and 15% of new hires are fired within the first year.
In this TechCrunch post he says ClearFit’s core customer audience is made up of small businesses operating mostly in the offline world, including construction, retail, restaurant and hospitality, and that they are hungry "for a tech-based option."
“We focus primarily on main street businesses, who are spending $60 billion on this problem, and there’s a massive pain point, but we don’t have enough money to help them,” he explained to TechCrunch. “That’s why we raised this round, really to hire to meet that demand. We’ve been surprised by how much demand there is without doing a ton of work on awareness.”
What do you think of a software-based hiring solution in general? Have you used one? Would you use one? Why or why not? Does anyone consider this type of software a threat to the traditional staffing, HR, recruiting hiring model(s), or a complement to it?