The cost of a ‘wrong hire’ can be enormous
Each time you hire a new employee you potentially spend several million Euro. For example, a candidate currently earning €100,000 per year will cost your company about 6 million Euro over a 30 year working career when fully loaded employment costs and inflation are rolled up. In constructing a Capital Acquisitions Request for a piece of equipment that cost say €50,000, you’d spend a considerable amount of time completing a cost: benefit analysis. Yet when it comes to candidate selection, many managers are ill prepared to make a decision which impacts an organization to a much greater extent. Is there some ‘magic formula’ that can help reduce the inherent risk in hiring a plonker? Well… here’s a couple of ideas that have stood the test of time.
Big Idea #1: Targeted Selection: Selection interviewing is a notoriously subjective process. A substantial body of research has indicated the reliability rate (the likelihood that two skilled interviewers will judge a candidate’s ability in the same manner) to be less than 50%. That statistic is made worse by the fact that almost everyone thinks they are a wonderful ‘judge of character’, God’s gift to psychology.
Overcoming the ‘Halo’: Candidates with highly developed interpersonal skills are particularly difficult to assess. A well-dressed candidate, who offers a warm handshake, speaks eloquently and maintains good eye contact makes a positive initial impression. Unfortunately, these traits may have nothing whatsoever to do with the skillset required for superior on-the-job- performance (albeit they are excellent traits for confidence tricksters and sociopaths – in terms of ‘gaining entry’). What’s needed is a systematic way to overcome that ‘halo effect.’
Targeted Selection: Targeting selection derives its name from the fact that interviewers ‘target’ specific competencies and focus on these. It’s based on a fairly simple premise. The best indicator of what someone will do in the future is what they’ve done in the past. The process is designed to reduce subjectivity by focusing on actual (rather than potential) performance. How does it work? Having identified the key competencies required for successful performance, the interviewer tests the candidates’ experience in those areas. The focus is on demonstrated performance. While people can spoof about theoretical possibilities – they usually find it much harder to lie about what they’ve actually done in the past.
Achievements Focus: Targeted selection drills into what a candidate has actually achieved in the past not on what they say they will do in the future. If a candidate has consistently performed well in a particular area and can demonstrate this, that’s the best indicator of future performance. If the candidate has consistently underperformed in a particular area, that’s also hugely valuable information.
Big Idea #2: Competencies Tool: This isn’t really a ‘separate idea’ – more of a build on Targeted Selection. Case Example: One of our pharmaceutical clients decided to develop a systematic way to assess internal and external candidates for the role of Site Leader. We were tasked with developing a systematic method (that they could continually reuse) to select high-end talent.
The Approach: A competency can be defined as a distinct skill or ability to complete a task successfully. Goal: Identify the ‘Core Competencies’ associated with success in the position of Site Leader. In addition to defining the core skills, we needed a simple way to measure these – with existing staff and for people interviewing from outside the company.
Competency Tool: The Competency Tool idea is based on a simple premise. Managerial jobs can be subdivided into 3 key areas:
(1) Thinking Skills: The knowledge requirements for the position and the intellectual ability to make decisions/solve problems that typically arise e.g. chemical engineering.
(2) Doing Skills: The functional skills needed to fully satisfy the position requirements e.g. public speaking.
(3) Relationship Skills: The ability to successfully interact with people to the extent required by the particular position e.g. employee engagement.
A Competency Tool allows key decisions on selection and promotion to be based on objective criteria. Looking at the most successful people in Site Leader roles across that client company – we identified the ‘success requirements’ in this job. Of course, there’s still an element of individual personality to be taken into account. While no system is 100% objective – having this ‘guideline’ considerably reduces the subjectivity of decision-making in the selection process.
External Hiring: Most organisations understand that it’s critically important to attract and retain the best available talent. Stated another way, every open position offers an opportunity to put a world-class candidate in place. So far, so boring! But, here’s the kicker. Having a Competencies Tool maximises your chance of actually doing this. While the approach isn’t foolproof (there’s no guarantee that you will source Wonder Woman) it’s better than relying on your ‘marvellous gut instinct.’ Much better.
Taking a Punt: But, what if a candidate has never been exposed to a particular area deemed critical for the post on offer? How do you make a judgment on future potential if there’s no evidence to go on? Can I suggest a broad ‘rule of ‘thumb’ as follows: If the candidate has demonstrated excellent previous skills in at least 75% of the essential job requirements they are worth a hiring risk. If they can demonstrate less than 75% of essential job requirements, the ‘risk’ element becomes unacceptably high. Taking this approach you will, at times, ‘throw out the baby with the bath water’ and miss potentially excellent candidates. But it will ensure that entry barriers are kept high and you will spend less time in Lawyers offices working out the best way to get rid of them.
Big Idea #3: Assessing Candidate Motivation: Under this heading the key question is: “Why does the candidate wish to apply for this position?” One way to ‘test’ this is to ask the candidate four direct questions.
- Why have you applied for this particular role?
- Why do you wish to leave your current position/company?
- Does this job (geographical location, travelling requirement etc.) fit with the non-work aspect of your life i.e. family circumstances, relationships, hobbies and so on?
- How does this position align with your longer-term career goals?
Big Idea #4: Make the Interview Work: Most candidates are nervous. The best way to overcome this is to start interviews on a warm note and to get the candidate talking as soon as possible. The candidate usually has his/her ‘story’ prepared and wants to tell it. Long introductions about your organisation’s history/values/direction usually serve to make a candidate even more nervous and should be held until the end of the interview. It’s a mistake to give too much detail at the front end of an interview. Astute candidates will look for ‘signals’ and tailor their answers to what they think you require.
Process Control: An interview isn’t an informal meeting; it’s a directed discussion. Your job is to keep the process on track. Focus on the ‘key competencies’ and don’t allow yourself to be sidetracked by the fact that someone has run 5 Iron-Man races or bungee jumped all over South East Asia (even if you secretly wish you could have done all of that).
Hiring the best available talent is a key skill. Elbert Hubbard suggests: “There is something rare, something finer, something much more scarce than ability. It’s the ability to recognize ability.” Don’t short-change the process just because you believe that you have some sort of ‘6th sense’ about people. Just remember the often-quoted response when someone’s neighbour or work colleague turns out to be a serial killer i.e. “He seemed so normal.” Now, on that thought, have a good week.
Paul
PS Story of the Week: Played golf with Fintan from Belgrove Motors and he related the following true tale. His daughter is a Primary School Teacher in Ballymun, Dublin. When the kids were asked to tell their ‘weekly news’, one of them mentioned that her pet Hamster had escaped from its cage and was missing for 3 days.
The family heard some scratching beneath the fridge. Following a Herculean effort, the Dad managed to extract the Hamster from under a giant American Fridge and put it back into the cage. But the Hamster seemed very nervous. It was cowering against one side of the cage, shivering, and couldn’t be enticed to move or even to eat when presented with morsels of its favourite food. So, they took him to the vet. Turns out that the Hamster had swallowed a Fridge Magnet and was literally ‘stuck’ to the side of the cage. Apparently, he’s doing well again now and is fully recovered.
Pet Jokes & One-Liners…. (stocking fillers for the T-Break)
Q: Did you hear about the law firm with the most intimidating lawyers?
A: It’s filled with liti-gators.
Q: What do you call a hamster with 3 legs?
A: Hamputee.
Q: What do alligators call human children?
A: Appetizers.
“My husband is a self-harmer. He eats his own cooking.”
Q: What happens if you get addicted to Rehab?
I love reunions. They’re Old School!
Check our website http://www.tandemconsulting.ie or call 087 2439019 for an informal discussion about executive or organization development.
Confessions of a Consultant 