Hiring Practices: How To Hire The Right Person
We’ve got an ongoing national epidemic sweeping across the business community, and it’s called ‘Bad Hires.’ The following data paints a shockingly grim picture:
46% of newly hired employees will fail within 18 months, while only 19% will achieve unequivocal success (Leadership IQ)
58% of the highest-priority hires, new executives hired from the outside, fail in their new position within 18 months (Michael Watkins)
66% regret hiring decisions — Nearly two-thirds of hiring managers come to regret their interview-based hiring decisions (DDI)
So what’s causing all these hiring failures? You may be surprised to discover it’s NOT primarily due to lack of technical skills. According to a survey conducted by Leadership IQ, the five biggest reasons that new hires fail are:
Coachability (26%)
Emotional Intelligence (23%)
Motivation (17%)
Temperament (15%)
Technical Competence (11%)
What makes matters worse: the actual COST associated with hiring failures. Opinions vary on how high these costs can run – according to various sources, the costs can be:
ONE-THIRD of a new hire’s annual salary, costs increasing the higher in the organization the turnover occurs (US Dept. of Labor)
TWO AND A HALF TIMES a bad hire’s salary (Dice.com)
Tony Hsieh, CEO of Zappos, estimates that their own bad hires have cost the company well over $100 million (BusinessInsider.com)
The way I frame the hiring problem – our hiring processes don’t give us the right information about potential new hires.
We assess candidates for their experience, competence, pedigree, and references. But as you can see from the sources above, we should also be looking for things like:
Strengths and blind spots
Personality and cultural ‘fit’
Motivators
Coachability
Emotional Intelligence
Values
…and these things are not easily revealed by the standard evaluation process.
During an interview you can observe how candidates behave, but not what motivates them, or how the nuances of they think. You don’t understand their values, how they manage themselves, or how well their unique strengths align with the job requirements.
Step 1 – Know What You Want
The crux of this process is a technique called competency modeling. Competency modeling is simply the practice of building a model for the ‘ideal’ new hire. What do you want in the new hire? What are his strengths, values, and key behaviors?
There are several ways to build competency models.
Examine the high-performing employees in your organization. Gain a clear understanding of the things that enable them to excel.
In certain cases you can draw upon industry standards or best practices.
You can also hire experts like organizational psychologists to develop the models from employee interviews.
You can build the models from the results of psychometric profiles.
At the end of the day, I strongly believe the best source for this information is your own people. The example I’m going to work through below uses a combination of 1) and 4).
Step 2 – Assess All Candidates Against The Model
You can use practically any psychometric instrument to develop your competency model and assess candidates. Some are better than others for this application. And some instruments aren’t designed to enable this kind of analysis, so caveate emptor.
For this example I’m going to use a tool called Advanced Insights, which contains a combination of three psychometric profiles: DISC (behaviors), the Values Index (motivators), and the Attribute Index (decision making and thinking styles).
Use the results of our analysis, not to make a hiring decision, but to inform the process. Profile results seldom provide answers – but they do point to a lot of questions. Using the analysis we can advise the interviewers on what areas to explore in greater depth. DISC is used to measure a person’s observable behavior in both natural and adapted styles. We measure this to reveal “How” a person will carry out any given task, engage with people and solve problems
The Values Index is used to measure what really motivates an individual: their values, beliefs and personal interests. In other words, it answers the ‘why.’ This is used in aligning company culture, recruitment and retention within organizations to the individual. It is fundamental in managing people to achieve superior performance in their job.
The Attribute Index is a revolutionary way to measure people’s organizational skills and competencies, to increase individual, as well as team efficiency and effectiveness.
Step 3 – Use The Results To Focus The Interview
We can summarize our analysis of the candidate this way:
Positives – High degree of Empathy gives him excellent Interpersonal skills. Strong Practical Thinking makes him a results-oriented person. A self-starter. Very coachable.
Areas of Concern – High Systems Judgment appears to be getting in the way of some of his other strengths, as they pertain to a sales role. Is not motivated by Economic matters. Strong Regulatory and Theoretical motivators appear to be driving low Decisive and high Cautious behaviors. High Stabilizing preference may not be conductive to a fast-paced sales environment.
In other words, he’s not a good fit against the competency model in a number of areas, and we should explore these areas during the interview. Or, if other candidates show a better fit against the model, we might not want to interview this candidate at all.
Developing Your Competency Models
The above example points to an easy way to develop your own competency models:
Using any combination of the techniques from Step 1, evaluate both your high-performing and low-performing employees.
Examine the results of your evaluations to determine the traits shared by your high-performing employees. Note how these manifest themselves in your low-performing employees as well.
Select the traits most important to success.
Sandy Cormack is the managing director of Strategic Diagnostics LLC.
Reminder: Attend CEA Contractor HR Forum for dicussion on Human Resources Best Practices (for date and topic of next HR Forum visit www.ceacisp.org/events)