Is a Bad ETRM Hire Silently Draining Your Budget?
It is critical to focus on the right skillset of ETRM talent pool. In the rapidly growing times, talent acquisition of ETRM professionals are focused on business of energy and commodity trading, where margins are carefully estimated and market risk is ever-present, the integrity of your operations is essential. Your Energy Trading and Risk Management (ETRM) system is the backbone of the project’s authenticity.
It is still problematic to find qualified ETRM talent that can lead to favorable hiring decisions. Such compromises in companies lead to disastrous operational failures. More commonly, a mis-hire operates as a slowly damaging, gradually diminishing efficiency, increasing risk, and causing a heavy, multi-dimensional financial burden for the organization.
The Tangible Costs
Talent acquisition for ETRM expertise requires identifying the right cost margin to achieve along with anticipating forthcoming organizational requirements. The direct, measurable costs of a substandard hire are significant. According to the U.S. Department of Labor, the direct cost can be 30% of the employee’s first-year salary. For a specialized ETRM position with a market-level wage, this is a serious cost overrun. This includes the cost of recruitment agencies, the internal time dedicated to interviewing and inducting, and expenditure on training and system privileges.
By implementing strategic talent management in ETRM hiring, organizations, organizations do not have to go through unwanted exits of unskilled employees. When the unavoidable exit takes place, departure packages and the cost of re-commencing the recruitment process further add to the cost overrun. A study by the Society for Human Resource Management (SHRM) estimates that the overall expense, including hiring, induction, and training, can exceed three to four times the salary of the position if all such factors are taken into consideration. These are the tangible, ledger-impacting numbers that immediately grab management’s attention.
The Hidden Liabilities
Direct losses in talent management for specialized fields like ETRM talent are significant. they tend to pale in comparison to hidden liabilities that can remain undetected for a long time. A poorly qualified ETRM analyst might misrecord a complex transaction, leading to weeks of painful corrections, financial discrepancies, and possible settlement conflicts. A poorly developed risk report can give the company a critical false impression of exposure, leaving it vulnerable to market movements and in violation of compliance procedures.
The system’s full potential is not being utilized, a silent opportunity cost that keeps the organization from leveraging its own technology as a competitive advantage. Second, the productivity of high-performing team members is necessarily compromised as they are drawn away from value-added work toward constant supervision, error correction, and knowledge transfer. This degradation in operational efficiency is where the deepest and most insistent budgetary drain takes place.
The Cultural Impact
The cultural cost of an incorrect hire is also severe and unending. The collaborative nature of the ETRM function is rooted in a trust-based foundation and mutual skill set. A person who lacks the required competence or collaborative spirit can disrupt team harmony, create uncertainty, and severely damage morale.
High-performing professionals are motivated by working with talented peers; the presence of a complaining weak link causes frustration and higher turnover, perpetuating an expensive cycle of talent drain. The extended administrative attention needed to oversee an underperforming employee takes leadership away from strategic projects, essentially creating a leadership vacuum and slowing momentum on key business goals.
A Proactive Safeguard
The answer to this widespread and costly problem is not to speed up the hiring process, but to increase its severity and strategic relevance. Companies must not do comprehensive screening processes. The process goes beyond a technical questionnaire and requires a thorough assessment of the candidate’s real-world problem-solving capabilities to operate in a high-stakes environment. Relying on generalized recruitment methods for such a technical field presents an unacceptable level of risk.
Securing Your Investment
A bad hire in a specialized field such as ETRM is a legitimate and serious concern, but it is entirely avoidable with the right strategy. By leveraging a dedicated network with deep roots in the ETRM ecosystem, you can replace budgetary concern with operational confidence. The proper ETRM professional will protect your business’s operational foundation and catalyze growth and innovation. Protecting the budget can ensure the robustness of trading operations by taking decisive steps to secure the right talent. That process is most effectively created through a connection to a dedicated and knowledgeable community.
ETRM professionals are valuable as it requires a vast skillset and are difficult to find. At Arthur Lawrence, we take care of the whole process through hiring the right candidate by our growing community, ETRMConnect. Our pre-screened candidates have a proven track record and well-rounded evaluation process aligning with your specific operational landscape.