Know the five costly hiring mistakes that can thwart obtaining the best talent, and how to identify candidates with the “emotional intelligence” for success.
Every new hire ultimately contributes to either moving a business forward or holding it back. That’s why nothing is more critical to the survival and expansion of a company than the talent it chooses to bring — or not bring — into the organization. Obviously, every leadership team wants to seed its enterprise with top-flight talent, but do hiring managers really know how to deliver on this mission-critical requirement? The answer for most companies is “No.”
Most organizations are not sufficiently disciplined about or adept at hiring. Specifically, most hiring managers engage in “reactive hiring” rather than “talent acquisition.” Reactive hiring narrowly focuses on replacing bodies and filling open slots, while paying little or no attention to the critical issue of proper fit. Instead, a disciplined, methodical and scientific approach is needed that succeeds in “screening in” the right fits and screening out poor fits. Such an approach addresses interviewing of course, but it also encompasses the entire strategic context of recruiting and hiring.
Five Costly Hiring Mistakes
Talent acquisition that amounts to a slot-filling exercise is the result of five systemic problems:
1. Managers fail to hire methodically to a competency model that describes the specific kind of person who will thrive in the company’s or division’s unique culture. Screening out the worst candidates is not enough. Rather, it is usually the marginal ones that slip through and then adversely impact the organization’s productivity and morale (not to mention that it is typically hard to terminate them). A best-fit model identifies people who will find success in their new roles and along the potential career path they will travel in that environment.
2. The failure of everyone involved in the hiring process to use a standardized method. The common pattern is for hiring managers to simply do their own thing and fly by the seat of their pants. Accordingly, they don’t measure against or hire to a specific success profile and don’t use a standardized interview protocol or standardized methods for weighing responses. In addition, there are typically neither standardized selection tests nor a common evaluation matrix to assist in ensuring that the hiring team is comparing apples to apples when evaluating and comparing finalists.
3. Not being systematic in these ways leads to the third common error—being overly susceptible to the tactical imperatives, i.e., feeling pressured simply to fill seats. When this is the case, hiring managers make the all-too-common “settle-for” decisions on candidates.
4. The lack of discipline and a system makes the hiring team vulnerable to subjective decision making. In other words, they hire by “chemistry,” not by design. Hiring decisions are made based much more on hunches (replete with unconscious biases) than they are on any kind of objective assessment. Many significant interviewing errors occur and serve to compromise objectivity when the hiring process is not grounded in a valid assessment system. Here are several of the most common errors:
Succumbing to one’s biases, prejudices, and stereotypes about appearance, age, gender, ethnicity, etc.;
The primacy effect, i.e., over-weighting (in either direction) the first impression; hiring in one’s own image;
Biasing the candidate’s responses by asking leading questions;
Succumbing to order effects (e.g., first or last interviewee bias, time of day, judging a candidate in comparison with the prior candidate);
Weighting negative information more heavily than positive information (or vice versa);
Registering visual cues as more important than verbal ones;
Being fooled by “interview experts;” and
An overarching bias to either like or dislike people.
Superimpose any of these biases onto a non-systematic and undisciplined approach to interviewing and hiring, and the probability of imprecise hiring rises exponentially. It becomes tremendously easy to fool ourselves into believing we have found Mr. or Ms. Right.
5. Finally, without a systematic process, the focus during interviews shifts to wooing the finalists rather than understanding (and helping the candidate understand) the degree to which there is a good fit between the individual, the job and the culture. Interviewers waste precious time "selling" candidates on the company or the opportunity rather than measuring them for fit.
The costs of imprecise talent selection can be staggering. The obvious expenses are just the beginning. They include advertising, search firm fees, screening and tracking the applicants, interviews and assessments of finalists, travel and relocation costs, referral fees and signing bonuses, orientation, and training. Beyond the obvious are the more difficult-to-calculate costs associated with employees who leave.
They include the time spent on exit interviews, severance packages, lost productivity and potential morale problems these poor-fit employees create. Dozens of studies consistently identify the cost of turnover to be somewhere between 25 percent of annual salary to 200 percent and beyond. Even studies of $8/hour employees show turnover costs that average $9,444.47 per exiting employee. Multiply this by 20, 50, or 400 ill-hired exits each year and it looks quite ugly.
But that is not all. While these numbers are dramatic, they are actually deceptively on the low side. Specifically, the value of retaining one front-line worker is an order of magnitude greater than the cost of losing one. Why? Because creating a 25-year employee will eliminate as many as five or ten or more exit events over that period of 25 years. So, using the example of $8/hour workers, retaining a single employee creates savings that are a multiple of the $9,444.47 in “exit costs.”
Skills, Education, Experience—What's Missing?
Adopting a scientific, methodical approach does not mean turning hiring and interviewing into some kind of a mechanical process. On the contrary. The mistake so often made by those involved in the hiring process is to deny perhaps the most fundamental reality of organizational performance ... that it is primarily a psychological affair. That is, the platform from which organizational performance is launched and from which it can ultimately soar is built on vision, meaning, inspiration, passion, partnership, collegiality and so forth. In short, organizational performance is primarily driven by leaders and followers who possess a great deal of Emotional Intelligence and by company cultures that are infused with emotional intelligence.
Emotional intelligence more accurately predicts performance in a business setting than either knowledge or skills, because it operates as a “regulator” of all workplace abilities. Certain natural talents (like IQ or technical acumen) can place a candidate on an ascending career track, but in the end the individual’s mastery of the ultimate tool (himself or herself) will move that person toward the highest levels of performance, contribution and satisfaction.
Since emotional intelligence is trickier to measure than the factors that hiring managers look at more often — skills, education and experience — accurate hiring becomes a much more challenging affair. If hiring teams don’t already know how to measure personality traits with precision, they had better become grounded in how to assess such key traits as conscientiousness, desire to achieve, sociability and helpfulness, because these emotional intelligence factors are the big predictors of performance.
Culture Matters
Conventional wisdom and research further suggest that information gleaned from performance-based exits indicates a high level of cultural incompatibility (“not fitting in,” basically) rather than any sort of technical competency shortcoming. It follows that an assessment of corporate culture is also a crucial component of precision hiring. Since cultures can be quite different — even from one business unit or division to another — the culture of a particular organization colors virtually everything about a person’s workday experience and therefore it affects “fit” to a great degree.
An interviewer who can paint a vivid and realistic picture for the candidate of the prospective company, its culture and the role, will increase the chances that the candidate, if hired, will be content. The hiring assessment will be more accurate, and the candidate’s decision will be more informed.
Deciphering culture involves a consideration of such components as business and management philosophy, operating style, interpersonal and communication styles and organizational style — all in terms of what is acceptable or disapproved of within the corporate culture. Hiring managers also need to be able to assess other intangibles like values, beliefs, attitudes and principles (again, acceptable vs. disapproved). For example, an employer in the hospitality business must know how to identify and then attract the personality type that is naturally gratified by serving others and by helping them feel at home.
A Strategic Context for Hiring
With the “squishy” nature of talent acquisition firmly understood, here are the critical components of a high-accuracy interviewing and hiring process. First and foremost, analyze the organization’s major job categories and identify the performance-critical competencies required for each. That is, what types of experience, knowledge, behavioral styles, personality traits and motivations will produce the level of fit and contribution vital to the company mission?
Then, build a set of tools that can measure these traits and capabilities for a given interviewee. This would include a competency model or “success profile”; a behaviorally-based interview protocol and interpretation guide; a personality test that can measure the more difficult-to-assess indicators (e.g., emotional intelligence, motivators and interpersonal style); and an evaluation matrix that can be used across hiring teams to coordinate, synchronize and summarize the assessment of the finalists for a given position.
Once these tools are in place, methodically prepare hiring teams to be able to gauge the answers to three big questions about every candidate: Can he or she do this job? (This is about factors like education, experience and various acquired skill sets). Will he or she do this job? (This is about factors like vocational interests, motivation, work ethic and drive.) Will he or she fit here? (This is about factors like values, sociability, independence, team orientation and followership/leadership styles.)
Increase the magnetism of the organization’s culture so it attracts even more talent to the applicant pool. Also, companies that take a strategic approach to talent acquisition typically have managers and executives who understand that recruitment is a vital part of their job description. Together, these two tactics will better ensure a healthy group of candidates from which to select. The more potential best-fit candidates enter the top of the recruiting funnel, the higher the probability that the genuine article will come out the other end—precisely selected “best-fits” who will become valuable additions to a growing bench of talent.
Good People Deliver the Goods
A precision approach to interviewing and hiring augments a company’s competitive advantage in a host of ways. A significant reduction in turnover and its high costs is just the beginning. Best-fit candidates, when hired, settle into their roles more quickly and are more likely to become star performers, with the increased productivity and contribution that accompany having a team of all-stars. Individuals who are correctly matched to a job perform primarily for the satisfaction of mastery and achievement. In addition, a comprehensive hiring evaluation report can also double as a working document, aiding the new hire’s manager in better understanding how to motivate, develop and coach the new hire. This in turn moves people more effectively into the succession pipeline and increases the opportunity for and success of promoting from within. Finally, a thorough, disciplined approach to hiring enhances an organization’s culture brand, in that candidates are uniformly impressed with a company that takes its mission so seriously.
The anthem of talent management sounds like this: Profitability is about performance and, ultimately, performance is about people—one person at a time and collectively. Acknowledging this fundamental insight means populating the organization with the type of people that fit with its mission, vision and overall strategy. It can only be done with a well-thought-out and standardized approach to interviewing and hiring.
Seven Steps for Hiring Best-Fits
Acknowledge that people are the critical drivers of business strategy.
Recognize that talent acquisition and management are primarily a psychological affair. Don’t judge a candidate by requisite skill sets, education and experience alone. Learn to recognize and assess “soft” attributes such as Emotional Intelligence and personality.
Assess the corporate culture and evaluate the candidate’s fit with the culture. Consider business and management philosophy, operating style, interpersonal and communication styles, organizational style, values, beliefs, attitudes and principles.
Analyze the organization’s major job categories and identify the performance-critical competencies required for each.
Develop tools that can measure the performance-critical traits and capabilities of candidates (competency model; behaviorally-based interview protocol and interpretation guide; a personality test that can measure the more difficult-to-assess indicators; an evaluation matrix that can be used across hiring teams to coordinate, synchronize and summarize the assessment of the finalists).
Hiring managers must know what they are looking for and not looking for before they interview any candidate. They must also know when they have spotted the kind of talent that will be in sync with the business and when a candidate does not fit with the company’s culture or success profile. Methodically prepare hiring teams to be able to answer these questions: Can the candidate do this job? Will he or she do this job? Will he or she make it here?
Increase the magnetism of the organization’s culture so it attracts the best talent to the applicant pool.
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