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Hiring Without the Guesswork
Part 1 of 2
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Personnelly Speaking |
Most companies are trying to squeeze more work out of fewer people. They are in no position to pick up the slack a bad employee can cause. You can't afford to recruit and hire the old way. Here's what smart business owners are doing instead.
A few months back, a friend of mine let's call him Kirk, was shopping for an anniversary present for his wife. He found himself in a jewelry store with a friendly salesclerk who showed him a beautiful, but pricey, diamond-studded bracelet. When he balked at the price, the clerk asked him how long he'd been married. Twenty-one years, he said. "Well, wait a minute," she gently pointed out. "This bracelet costs only $143 for every year you've been married."
It may be the oldest trick in the jewelry-retailing book, but Kirk, president of a California-based food broker, thought the clerk "really had a good soft approach." In the end he walked out with the bracelet. More important, he left with the name of someone who might make a good employee at his company.
Click. This little episode seems like the quintessential hiring story. Something just clicked. We don't know exactly why, but the job applicant seems right. Or wrong. Or something in between. When it comes to hiring, many of us are in murky territory. Sure, we look at job experience. Education? Naturally. But a good part of our decision rests on a shadowy collection of vague impressions. We call it intuition, chemistry, a gut reaction.
Others call it a crapshoot. Kirk doesn't believe in it. His apparently casual contact with the jewelry clerk was actually part of a process to steer a certain kind of person into his company. He had to learn the hard way, when lack of customer confidence in his people put his business at risk, that hiring isn't just another operational necessity. In fact, apart from actually conceiving the idea for your business, hiring those who will bring that idea to life is the single most consequential step you take. With every person you hire, you determine how great your potential successes may be, or how awful your failures.
When a company lays off workers and runs more lean, each worker has a greater effect on the company's performance; each employee becomes more important. And it's not just the demand for more elbow grease that's raised the stakes in every staffing decision. These days you need workers to perform more than their obvious duties; you need workers who can offer perceptions about your customers or insights into your production process. In these resource-parched times, an order clerk who can pinch-hit as a salesperson, analyze operations like a consultant, and communicate like a leader would fit the bill nicely.
If you were to say your business can't afford to sustain the disciplined, continuous recruiting process needed to find such people, that it's too short on time, energy, or money, then I would argue that you can't afford not to.
Consider the downside of getting it wrong, the price of a bad hire. The tangible costs are obvious: salary, fringe benefits, recruitment, and training expenses. According to a recent survey, a salesperson who lasts six months in an office products dealership, for example, costs the company about $17,000.
Not a very threatening number, true. But then tally the intangible expenses: the time you invest in that person; the lost sales opportunities; the loss of morale in the office. The survey says such costs can come to seven times the purely tangible losses, bringing the price tag of this particular bad hire to $136,000.
That may be hard to believe until you consider the ripple effect of the bad hire in your marketplace. First of all, they don't work out. They do not take care of the customer or client. They elude the team's efforts and erode the owner's confidence. What looks like a $1,500-a-month hiring mistake becomes a lot more expensive when you multiply that by the number of customers or clients who are let down.
The cruelest cost is also the most subtle: the loss of what might have been. Our mis-hired employee has cost you all the positive things that would have occurred had you hired the perfect candidate: a re-energized company, a fresh flow of ideas, your next office manager who knows?
So what do you do to find and hire perfection? Begin by renovating the hiring strategy. If you're like most managers, you want to hire someone who's done the job before. This logical-sounding idea springs from an earlier time, when labor was plentiful, and technology was slow moving. You needed a pair of hands that would do what you asked. Job experience equaled competence.
As mass production has given way to customized products and services, and technology has shouldered a greater portion of the work, business's needs have changed radically. Today, a pair of hands is by no means enough. Managers rely more heavily on workers' insights and initiatives. A successful service business depends as much on the attitudes of its employees as on their technical skills.
Evaluating job applicants on the basis of their education and previous work experience is myopic, like looking at a candidate through a peephole when you could open the door for a full view. Some business owners go so far as to say you should be wary of these old standbys; that looking at résumés and experience is a trap.
The pickiest companies seem to do what might be called holistic hiring. They believe that a person's behavior, interests, and personality are crucial contributors to his or her success or failure in a job. So they have found a way to decipher this soft data, to decode the click. Some use personality tests (though they avoid calling them that). Some use activity tests of their own design. Some don't use tests at all. But all strive to objectify the subjective.
There are other components to successful hiring. But to hire well, you can't pluck a few scattered techniques. What's needed is a comprehensive system that starts with the premise that hiring is an ongoing process, a constant investment of your company's time and energy, whether or not you have a job to fill. The rewards are handsome in most cases, far greater than you might expect.
The penalty for not elevating hiring to number one on your company's priority list? You systematically shortchange your company's potential. Most companies are reactive. When they suddenly lose an employee, they jump right into action and say, We've got to hire quick. Six candidates come in and they hire one. Chances are, they're not a good fit, but they've hired the best of the worst; they've hired out of desperation. Here's a better way.
Step One: Recruit All the Time
Constant recruiting is what makes the difference between hiring the best of the worst and hiring the best for the job. Very simply, it is forward-looking, ensuring that the pipeline of high quality candidates is full when you have an opening. Does that mean advertising continuously? "Definitely not," says Kirk. "People who read ads are looking for a job. We are looking for people who aren't looking for a job they're happy and productive where they are. When we find these people, we try to sell them on why they should work here."
When Kirk runs across someone such as the aforementioned jewelry clerk whom he thinks he'd love to have as an employee, or conversely, for whom he himself would like to work, he engages that person in a conversation about his industry.
Good scouts may come from anywhere; some of the recruiters are his clients. Sometimes these recruiters are so sold on Kirk's company that they decide to apply for jobs themselves.
Not only does Kirk build a pipeline to future employees, he taps a labor pool that is nontraditional for his industry.
Step Two: Write a Real Job Description
I think this little piece of homework is the single best thing you can do to hire well. That's right, write a good job description. It may sound like a bureaucratic nuisance, but that's not the kind of job description we mean. We're talking about reaching an understanding of a position that goes far beyond a list of duties.
The reason this is so critical? If you have real intimacy with what's required in a particular job, you are disciplined to look for someone who matches the description. Without a blueprint, you'll usually hire the person you like the best who's done the job before. Most often we make the mistake of hiring in our own image.
A client of mine recently crafted a job description that dramatically altered the kind of person he hired for a key position, the manager of a growing information systems department. Initially, he thought he needed someone who had technical mastery. Then he defined the job in terms of its objective: What would be the result of hiring the right person? What he wanted, as it turned out, was someone who could develop the department and discern what the rest of the company required of it. He needed a nurturer and communicator, not an inspired computer hacker.
To continue building a profile, define the traits needed to succeed in the job. Begin by writing down a list of actions a person will undertake in the job. Then itemize the behavior necessary to execute those activities successfully. Finally, devise a script for the interview: You write open-ended questions that will get people to discuss their previous work history in such a way as to disclose whether they have those traits.
The conventional job description, for example, focuses on activities. Here's the traditional salesperson's job description: Generate and close new sales, make 15 cold calls a week, write call reports, and attend weekly sales meetings. Sound familiar? Obviously, there's nothing inaccurate about the description, but it leaves you clueless as far as finding someone who will be a good salesperson. You're stuck, essentially, with just looking for a candidate who has done those five activities before.
In contrast, a job description for a salesperson may consists of 17 behavioral traits. One of them is healthy "self-talk," the mental dialogue we have with ourselves. To uncover that characteristic, you might ask the applicants what they would say to a fellow salesperson who was getting a lot of rejections and having difficulty making appointments. By twisting the situation around and suggesting that they're helping others, you are discovering what they say to themselves. What he wants to hear is a buck-up-and-keep-going speech to the imaginary colleague; he believes the inclination toward that response, rather than empathetic pessimism, is a key predictor of a salesperson's success.
A first step to constructing a truly useful job description is to itemize the patterns of behavior of your most successful employee in each job class. Then, as you get better at hiring, revise that list. Over time, it will become a valuable recipe. At many companies, job profiles are reviewed, discussed, and tinkered with every time a position is filled. One personality trait may be replaced with another.
Note: Part 2 of "Hiring Without the Guesswork" appears in the November 2000 Industry Focus.
About the author
Robert Palow is president of RP Consultants, a Placentia, CA based company that specializes in labor and employment practices. He has more than 30 years of management and legal experience in the human resource field.
ABSSI / Industry Focus / September 2000
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