Recent Trends in Human Resource Management

Wednesday, March 4, 2009

If Bad Hires Squeaked!

If Bad Hires Squeaked!

It might seem like a rather odd time to write an article on hiring when so many companies are not. Determining the need to improve upon one's hiring process, and making the changes, is something that can be done right now. Consistent marginal performers presently on board got there somehow. They weren't good hires that suddenly changed after their start date. Poor performance can be traced back to incorrect assessments and the ill-fated decision to hire. Yet many companies only address poor performance with employee counseling and discipline stopping short of fixing the real problem - how they got hired.

* How Effective Are Interviewers At Hiring High Performers?

When the economy is robust and the unemployment rate is low, the supply and demand model favors the applicant, not the employer. Companies can struggle just to fill all their openings. However, hiring High Performers does not require a flood of applicants. If you do need more, you can always get creative. In any labor market, one of the best ways to increase the pool to choose from is to turn your current employees into extended recruiters. Create a referral bonus program and get the word out. Make a big deal about each bonus you pay and it will catch on. But even with quantity, there are times we mistakenly hire poor performers thinking they're good choices. The opposite occurs as well. Without realizing, we say, "No Thanks!" to applicants that would do a good job. More important than a quantity of applicants is our ability to accurately recognize quality. Discerning the difference between who is motivated to do the job and who is motivated to get the job involves more than just assessing a candidate's skills. Without knowing how to properly identify the best, many unskilled interviewers are forced to rely on their gut to tell them which candidate is best. This produces good results sometimes and bad results other times. Improving your selection process involves improving the effectiveness of your interviewers.

* Many people believe that their years of interviewing experience automatically make them an effective interviewer.

This one is my personal favorite. The biggest roadblock to improving hiring is convincing interviewers they need training. More managers come to workshops kicking and screaming in defiance, stating they have too many important things they need to be doing, but leave professing it was the most valuable training they ever had. If a company is already filled with top performers, then indeed, interviewer training is unnecessary. However, if you track and review hiring stats, many companies find they have too few top performers. And, it's no wonder. Typically, 80% or more of those making the hiring decisions have had little or no formal training on how to hire the best. For those who have had some training, it's usually just the legal do's and don'ts, and some interviewing basics.

Many interviewers bring with them what they learned at prior jobs. When one company asked their interviewers to send copies of their interview guides to HR, they received 75 different ones. There was no consistency. Another company had a standard interview format but their training focused mainly on how to keep the company out of litigation. They provided no specifics on how to hire high performers. Since the full cost of bad hiring are typically not tracked, it's hard to say which costs more - poor performers or lawsuits. It's the squeaky wheel that gets the oil, even if both wheels need it. If only bad hires would squeak a little louder.

* We track time-to-hire and cost-of-hire but we don't track quality-of-hire or quality-of-turnover.

Are we saying fast and cheap hires are always good? Do we really not care about the quality that comes into and goes out of our company? In many companies, there is a lack of accountability for the costs associated with each poor performer hired. It's not tracked. There is no line item on a P & L for the lost productivity and sales from hiring a substandard employee. If there were, hiring would suddenly become more important. If a manager's bonus was tied to his staffing effectiveness, you'd see him seek out the training. Both the cost and the time-to-hire are valuable pieces of information, but what matters most is the quality of hire.

Low turnover numbers, without taking into consideration job performance, can be deceiving. It all depends on who's leaving. Turnover should be tracked not by voluntary and involuntary, but rather by percentage of high performers who move on. Effective exit interviews should be used to gather the "real" reason top performers leave. Only accurate feedback can result in changes that improve retention. Luring back the departed best is always a good way to increase a company's High Performer percentages.

If you'd like to improve your hiring effectiveness, here are some things you can do now:

* First, gather as much past department, or company, hiring results as possible. Break current employees into three performance categories: High, Average, and Poor Performer. Current evaluations can be a simple way to do this. Then divide the total number in each category by the total number of company employees, to determine your percentage in each group. It doesn't include recent turnover but it will give you a baseline to compare future hiring results with. Many company percentages create a bell-shaped curve with 20% on each end and 60% performing at an average level.

* Take the time to survey those currently involved in your company's employee selection process, as well as those being groomed for promotions involving this responsibility. Find out in detail about prior training, i.e., legal, basics, behavior-based, etc. Since years of experience does not always equal good hiring skills, knowing who needs training and who doesn't may be tough to determine. True effectiveness is determined by an interviewer's results and without prior statistics it can be hard to calculate. Many interviewers tend to embellish on their successes and forget the rest. Establishing an across-the-board training program that gets everyone on the same page may be what is best.

* Track effectiveness going forward. Have each interviewer sign-off on their decision to hire. Create a simple form (contact Hire Authority if you need assistance). Turnover numbers should not lump top performers with the poor performer turnover. It should be broken into at least two groups: those rated average and above who left, and those rated lower. Include the interviewer(s) responsible for the hire. Hiring will never be 100% effective. Every interviewer will have a mis-hire now and then. For those responsible for several, make additional training mandatory. Every job opening is an opportunity to fill the position with someone who will outperform the one before.

Ref: CAROL QUINN

1 comment:

Maria Strickland said...

"If Bad Hires Squeaked" was written by Carol Quinn. She is the CEO of Hire Authority, Inc. No where does this blog posting give credit to who wrote this article/posting. This is in violation of copyright protection laws. Carol allows people to quote her and re-post her articles only when they give her clear credit for being the author. You have not done that. It's the right thing to do! This article by Carol appears on her blog called "The Hire/Higher Attitude Newsletter". Please provide a link back to her newsletter/blog at http://blog.hireauthority.com

Regards,
Maria Stickland
Hire Authority, Inc.