Want Top Talent? Fix Your Hiring Process
Hiring is a ______ (you may fill in your favorite noun here to describe it).
Hiring managers spend valuable time on back and forth discussions with HR and recruiters and multiple hours interviewing candidates that may or may not accept an offer. When people eventually get hired, their performance may have nothing to do with impressions made in the interview process.
On the candidates' side, individuals jump through hoops trying to pick the right keywords to place on their resume and then coming up with creative answers to "Tell me about a time..." questions that have nothing to do with their experience or capabilities. Or worse, they may spend hours doing free work under the pretense of case studies to later hear from the employer that they didn't have the right qualifications in the first place or that the position was canceled.
According to Wharton professor, Peter Cappelli, companies in the United States spend an average of $4,129 per employee hired in recruiting fees and are able to fill in only about a third of positions (compared to 90% back in the 1970s). He adds that since 2009, candidates have spent double the amount of time on interviewing.
Executive recruiters, Geoff Smart and Randy Street, authors of Who: The A Method For Hiring, explain that a hiring mistake costs, on average, 15x an employee's base salary in hard costs and productivity losses (sounds a bit exaggerated if you ask me, but even if it were 1x, the price is very high!). Even with all of this extra effort companies still experience a 50% failure rate in hiring for managerial positions. Smart and Street propose to reduce this failure rate by fixing the hiring process.
The Motivation: Eliminate "Voodoo" Hiring
My favorite part of Who was a list of "voodoo" interview techniques that managers apply in lieu of structured approaches for screening talent. For example: "The sponge: A common approach among busy managers is to let everybody interview a candidate. The goal of this sponge-like behavior is to soak up information by spending as much time with people as possible. Unfortunately, managers rarely coordinate their efforts, leaving everybody to ask the same, superficial questions. We witnessed one interview process where six interviewers in a row asked a candidate about his skydiving hobby. Collectively, they burned over sixty minutes on a topic that had nothing to do with the job—although the fellow was an accomplished skydiver, as it turned out! The Sponge’s ultimate assessment of the person he hires rarely goes deeper than “He’s a good guy!”
Aside from wasting valuable time and failing to evaluate competence, voodoo techniques often open the door to selection bias.
Can we do better?
The book outlines a structured 4-step hiring process to help filter the candidate pool and better assess skill and cultural fit:
Scorecard: identify the outcomes you would expect the new hire achieve in the next few years (i.e. step away from job descriptions of day-to-day responsibilities and focus on results that match your company's strategy). This must be defined by the hiring manager and cannot be outsourced to the human resources function. The scorecard should also include soft skills (such as the ability to develop others, flexibility and adaptability, strategic thinking, etc.) and cultural competencies relevant to your organization. The book includes a list of traits commonly exhibited in successful executives.
Source: generate a flow of A-players (with emphasis on regularly reaching out to your network and cultivating a pipeline of individuals who are considered high performers). According to the authors, this is what top executives should be spending most of their time on.
Select: take a structured interview approach to identify fit between the candidate's experience and personal traits and the scorecard previously defined. Be consistent about questions so that you can clearly compare candidates and evaluate against the scorecard.
Sell: throughout the hiring process learn about the candidate and what is important to them and incorporate the insights into how you convince them to join the company.
You can find more tools on the authors’ website. They also share lists of useful questions for phone screening, on-site lengthy interviews and referrals follow-ups.
TL; DR - Hiring Should Focus on Expected Outcomes
While much of the value of the book is in organizing a fairly common-sense set of insights and anecdotes into a structured process, the key insight is about focusing on interviewing for results instead of on fit with job descriptions. This approach can also help you reduce bias.
For example, let’s say that you are trying to hire a Sales Director. Instead of testing for one’s ability to “develop client leads”, “close contracts”, “manage a portfolio of clients” and other routine activities, identify specific strategic goals that the Director should be achieving in the next few years. These should be tied to your company’s strategic objectives, such as OKRs.
These expected results could look like “Double sales in the next two years” or “Build a sales organization, composed of top players, able to support growth in three new markets.”
When evaluating the candidate’s experience, you should be looking at the likelihood of him or her achieving those goals in the next few years (or less, if you are running a startup with more pressing short-term goals).
What about you? Do you have any hiring strategies that worked for you? Or perhaps some epic fails to share? Join the conversation.
P.S. this article won’t be complete without mentioning one problem which is so prevalent in many leadership books: the lack of female protagonists. Out of the 80 executives interviewed for the book, only two were women and it was evident in the examples provided. Women were mentioned in the context of being wives, nannies and secretaries but not as powerful executives with their own needs and ambitions. This becomes especially stark when the book advises on how to convince executives to relocate by helping their wives to information on schools for their children and chinchilla coats(!). It fails to address one major challenge for dual-career couples: job placement for spouses. When you are hiring make sure that you don’t neglect to address the needs and capabilities of different profiles of candidates!
This article was originally published in my column in Forbes Careers.