No process that involves humans produces perfect results. Even hospitals, with all the quality control systems they implement, still have a measurable failure rate. So it’s no surprise that the traditional selection process that most managers use for selecting and assessing which candidates to hire is no exception. What is startling is that, although the interview and screening process has a very high failure rate, almost without exception managers and HR professionals alike treat it like it was a perfect process with a zero failure rate. In fact, it is common for 20% of all hires to be bad hires, and I’ve seen some cases where it is over 50%. It’s Time To Measure New Hire Failure Rates Because most managers and recruiters assume upfront that the hiring process literally never fails, they almost always omit checks and measures to ensure that the process continually produces great hires. In fact, in the over 100 firms I’ve worked with, I’ve never found a single hiring process, even at Six Sigma companies, that do each of these four essential things to ensure success:
- Assume upfront that some percentage of new hires will be mistakes, and as a result have a formal process for the early identification of bad hires. (For example, many do no performance assessment until the end of the first year.)
- Have a process for rapidly “releasing” their bad hires if they can’t be fixed.
- Have a formal set of metrics and a mechanism for identifying the ratio of successes to failures.
- Have a formal feedback loop which allows the hiring process to “learn” and improve as a result of any hiring errors.
In most cases, when I bring the topic of new hire error rates up, everyone quickly shifts the conversation as if “new hire failures” was a forbidden topic. Of course, it’s fairly common for managers and HR professionals not to want to admit that they fail. But since we know that all human systems have failure rates, it seems rather silly to ignore the new hire failure rate. Interviews Are Inherently Misleading The primary area where new hire errors occur is during the interviewing process. From the start, the basic foundation of the interview is based on the premise that during the interview, candidates are acting normally and telling the truth. I find that premise humorous, because we all know that candidates routinely” stretch the truth during interviews, as they try to put forth their best image. Fortunately, the equation is balanced because in a similar light, company’s also “lie” (by putting forward only positive aspects), in order to look good to candidates. As Michael McNeal, one of the seminal geniuses of recruiting, once pointed out, the entire selection process is ill-conceived. It is designed to find faults with the candidates as opposed to finding their positive aspects. Research studies also demonstrate the numerous weakness with interviews. In fact, the statistical performance of traditional interviews is so bad that it’s easy to wonder why they are used at all. The selection process is an “actor versus actor” game. Candidates try to appear like the person they think managers want, and managers try to appear like the firm they think managers want! As a result of these all-too-common problems, the key to great hiring is to either minimize the “unnatural” aspects of interviewing or to substitute different assessment processes which are more objective and accurate. Some Tips on Improving the Interviewing and Candidate Assessment Process When you examine the root causes of bad hires, you find out almost immediately that few new hires fail because they don’t have the required technical skills (one manager at Cisco completed a study that demonstrated that less than half of his failures were the result of inadequate technical skills). The lesson to be learned here is that when you are assessing candidates, it is important not to focus exclusively on whether a candidate has the technical skills to do the job. After all, technical skills can be assessed in skills tests or if/then scenarios, or even by giving candidates a real world situation to handle. The crucial area that most selection and interview processes fail to assess is the candidate’s ability to work with others in a team and whether they are a fit with your corporate culture. Most interview processes also fail miserably because they are not designed to identify what the candidate wants in a job, in order to ensure that “this job” and company are the right fit for them. Some solutions to each of these problems are provided below.
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- Assessing cultural fit. Interviewers can of course ask the candidate directly if they believe they would fit the firm’s culture. Unfortunately, almost everyone answers yes to that obvious question. Another problem is that the culture that the interviewer describes is often a sanitized view of the real corporate culture. A better approach is to provide candidates with a long list of cultural factors and force them to select and rank the top five under which they do their best work. They should also be asked to rank which ones are intolerable. The forced ranking process requires the candidate to identify their own cultural needs, and it tells you their ideal cultural fit. With this information, the recruiter and the manager can then more accurately assess whether your job actually fits the candidate’s cultural needs and expectations.
- Assess their ability to work in a team and with others. There are few jobs in the corporate world where an individual can survive as an individual contributor. If interaction with others and teamwork is essential, the candidate’s ability to work with others must be assessed. Rather than just asking them if they are a team player (any fool would answer yes), instead, give them a real problem that requires teamwork and cooperation, one that they would face during the first month on the job. Ask them to walk you through the steps on how they would handle the problem. If they minimize or leave out steps where they would be expected to coordinate, consult, and get input from others, you know you’re in trouble. Another option is to provide them with several different scenarios on how a different problem can be approached and ask them to pick the one closest to the one they would actually utilize. If the scenarios include both cooperative and individual contributor behaviors, you can be more comfortable with the candidate if they select the one that involves teamwork and cooperation. In addition, you can ask the candidate to list the situations where they would act on their own to see if any run counter to corporate expectations.
- A verbal simulation is a must. The very best approach you can use to identify if someone can actually do a job is to literally put them in the situation where they have to do the job. Although that’s not always possible, you can give candidates something very close to it, like a written or verbal simulation. I recommend that you provide every candidate with a verbal simulation. During the interview, ask them to provide a real problem they are likely to face during the first month or two in their new job. Tell them you are looking for problem solvers, and ask them to walk you through the steps they would use to solve this problem. Probe and ask why they took that approach, and make sure that they included collaboration and involving others. Check to see if they included effectiveness measures and continuous improvement elements in their solution. You might also ask the candidate to demonstrate the steps they would take to learn about new issues and identify some potential problems that they (the candidate) anticipate that they would encounter while implementing the solution.
- Identify their decision criteria for accepting. If you know upfront what criteria the candidate will use to assess your job and your firm, it is easier to provide them with information in those areas. Before the interview, ask the candidate directly to list and weight their decision criteria. Once you know what makes a job a great job, you can then provide the candidate with information in those areas. For example, if they like rapid promotion, you can provide them with a best case scenario identifying the average and the quickest time that any new hire has been promoted in the last two years. If they want rapid learning, you can provide them with a list of the resources, courses, and mechanisms you have for learning. The key here is to give them information on the things they care the most about so that they won’t accept a job and then later end up not liking it. Incidentally, by identifying their decision criteria, you can dramatically improve your chances of getting top candidates to accept. In fact, just knowing their decision criteria tells you a lot about the candidate and their expectations.
- Focus on the future. It’s a fact that most interviews in general, and behavioral interviews in particular, focus on the past. You ask them what they did in their last job, and they describe what they did in another environment that might differ significantly from yours. The problem with past focused interview questions is that the way people acted in the past at another firm might not reflect how they would, or even should, act under the current conditions in your firm. To make the matter more complicated, the problems facing your firm are likely to change and become different in the future. You can identify how a candidate will handle current problems with a verbal simulation during the interview, but if you want to see if they are forward looking you need to ask the candidate for their forecast or view of the future (for example, upcoming changes that will be needed in the function, the company, the product or the industry). If the job requires someone with insight, it’s essential that you ask them for their view of the future. In addition to asking them directly, you can give them a job-related situation and ask them how they would expect to approach the problem differently as a result of upcoming changes in the industry. It’s not as important that they get the forecast correct as it is that they continually think about the future and the changes that it might include. Anyone who says (or demonstrates) that they haven’t thought about upcoming changes should be rejected.
- Avoid the nervousness of interviews and hold a “professional conversation.” Interviews are scary situations from almost all candidates and even for a few managers. The set up with candidates versus managers in a conference room or office is incredibly imitating, especially with group interviews. The problem is that the behaviors and the answers you get in this “unnatural situation” do not necessarily reflect the real candidate. An alternative approach is to find a location and situation that is more natural and more relaxed. I call it a “professional conversation.” The more relaxed “professional conversation” can occur in a restaurant or any casual location where the candidate feels more at ease. During a professional conversation, the manager (and no more than one other person) discusses the problems that the individual will face during the first few months as colleagues, just like they would if they met informally as equals during a conference or other casual meeting. Whatever the scenario you develop, the key is to keep it in the format of a casual conversation.
- Ask them to show their work. A candidate’s memory of their work is not always very good during an interview, and the high degree of nervousness is likely to lead to inaccurate or partial answers to your questions about their work. Instead, ask the candidate to bring examples of their work (assuming there are no legal conflicts) to show and discuss. By allowing the candidate to demonstrate their work, you both raise their comfort level and get to see what they actually did. It’s much easier to assess quality when you have the work in front of you. Incidentally, if you’re going to hire an artist or writer, you would certainly want to see their work, not just hear their “words” in an interview. Think and act the same way for all other hires, and you will eliminate many hiring mistakes.
- Rely heavily on top performer referrals to avoid being fooled by “strangers.” Most candidates are unknown to the manager prior to applying for a job. This in essence makes them strangers. When you are interviewing candidates who are essentially strangers, even the best recruiters and managers are likely to be fooled. This is because the candidates are acting on their best behavior, and there are only a few hours of actual assessment time to find out what the candidate can actually do. That’s why it’s important to avoid, wherever possible, interviewing strangers. I recommend that you avoid the “assessing strangers” problem by filling your candidate pool with “non-strangers.” Although this might seem difficult, it’s actually quite easy to do if you rely heavily on employee referrals (especially those that are made by your current top performers). Because these referred candidates have already been pre-screened and pre-sold by your own top performers, you (indirectly) are already familiar with these candidates and their work. The only caveat is that you must be sure that your own employees have worked directly with the candidates they have referred. The on-the-job success rate of top performer referrals is generally 50% higher than that of “stranger” candidates.
- Ask them how to identify other “A players.” Top performers invariably know what it takes to be an “A” player in their job. If you concur, ask the candidate during the interview what criteria they would use to assess or identify whether a co-worker was an “A” player. You might also ask them to use those criteria to assess themselves and to provide evidence on how they meet each. Candidates who are unable to articulate “A” player assessment criteria (or those who have not thought about these criteria) are unlikely to be great hires.
- Don’t rely on references. It’s not uncommon for managers to think that references will tell you the straight scoop on what the candidate is really like. Well, that false assumption is another article all by itself, but rest assured that most people who give references provide less than the total truth. Some managers even directly lie, in the hope that you’ll take this “turkey” off their hands. To further complicate the reference issue, because so many firms in the U.S. refuse to give references, it’s unlikely that this avenue will produce comparable results between different candidates. If you want great hires, don’t rely on the opinions of strangers. Instead, find out directly for yourself exactly what the candidate can and cannot do.
More-Difficult-To-Implement, But Still Very Effective, Approaches For Reducing the Number of “Bad Hires” There are other things that managers and recruiters can do to reduce the number of “bad hires”. The ones provided in this section are a little more expensive and time-consuming than the previous tips.
- Treat interviewing and hiring like a Six Sigma process. If you are familiar with Six Sigma quality improvement processes, it would only take a brief assessment to realize that most hiring processes have a higher probability of reaching zero sigma than they do of being error-free. If you want to improve the quality of your results and reduce your bad hire rate (if for no other reason other than to not have to spend so much time hiring people) you need to treat the hiring process more scientifically. For example, before you formally implement any new screening process, psychological test, or even new interview question, it’s critical that you pretest it to ensure that a high score on it accurately predicts on-the-job success. The technical term for this is validation, but all you really need to know is whether the assessment tool produce results. The process for testing is relatively simple. During the standard hiring process add your new test, new question, etc., but don’t include them in the hiring decision process. Instead, just ignore the score for at least six months. After that time period, identify your new hires’ successes and failures. Next, see if the great new hires (successes) did well or scored highly on the test or new question. Then see if your poor hires did poorly on the test or question. If you see a consistent pattern, where the best new hires do well and the weak new hires do poorly on it, you can be confident in stating that the new test or interview question accurately predicts success on the job. As a result, you should begin to utilize it as part of your new hire decision process. If it doesn’t work, improve it or move on. If you want to double check the effectiveness of the new screening device, you can also give the new test or question to your current employees to see if your very best employees do well on it and your weaker employees do poorly on it.
- Relationship recruiting. As we saw earlier, any hiring process that makes a short-term assessment of strangers is bound to have a high failure rate. I have found that even the smartest interviewer can be fooled by a clever individual. You can, however, avoid the need to rely on the quick assessments that must be made during interviews by stretching the assessment process out over time. By stretching the assessment process over several months you get more time to assess the candidate, while at the same time giving the candidate more time to assess and feel comfortable with you, the job, and your firm. The process of stretching relationship building into an assessment over time is known as “relationship recruiting.” Relationship recruiting begins with the continuous collection of the names of top performers. The initial name collection can be done through Google Internet searches or employee referrals, or by identifying individuals at conferences and events. Once identified, these top-performing individuals are contacted and the process of building a relationship with them begins. They may be invited to company events, emailed brief questions, “looked up” at conferences, or sent a monthly newsletter about the firm. In each informal contact, an attempt is made to assess them as well as to make them more familiar with the firm. After a period of three to six months, you can generally approach them about any interest they might have in a job at your firm sometime during their career. If they reflect an interest, an attempt is made to make the relationship more formal and to eventually offer them a position. Because these candidates are pre-assessed and pre-sold over a long period time, their offer acceptance rate is high and their job failure rate is extremely low. Relationship recruiting turns strangers into people who we know well and who know us well.
- Offer night or weekend work. If you are really serious about proving whether an individual can work with your team, consider hiring them as a consultant for few evenings, or even a weekend, and have them work literally side by side with your team. Even though it’s only for a brief period, both sides generally know pretty quickly whether there is a fit. In addition, if you are a little-known firm, once they get to know your team on a face-to-face basis you’ll find that selling candidates becomes much easier, because they really get to know you, your team, and how your organization works.
- No-fault divorce. Rather than assuming you can eliminate all errors during the screening process, instead develop an assessment process that allows you to quickly identify any mistakes you made in hiring. Rather than waiting until a candidate totally fails, closely monitor candidates’ performance (after one month, three months, and six months) in order to identify the ones that are failing. You can use that opportunity for performance management efforts, or you can decide to cut your losses before they get worse by quickly releasing the bad hire. Cisco developed such a process a few years back, and it worked well in releasing those that just didn’t appear to be a good fit. In a “no-fault divorce program,” poor performers are given a reasonable package if they choose to leave voluntarily. Those who don’t agree to leave are watched closely under the premise that they will be terminated if they don’t improve in the next few months.
- Redeployment prior to failure. Not all good hires are successful on the job. Their failure may not be because you made a bad hire, but instead may be because they were placed in the wrong job or with the wrong manager. By using the same process as the no-fault divorce, you can identify struggling new hires early in their careers. After an assessment, you might find that they could succeed if they were proactively moved to another department or position. If you find that over a period of time these proactively transferred employees do well, you know now that your problem is with the placement of new hires and not with their skill level.
- Feedback loop. Even the best selection and hiring process needs to continually improve. That’s why it’s important to develop a process that connects the termination (whether voluntary or involuntary) of new hires with the selection process. By identifying who left and why, you can improve your interview and selection process so that you can reduce the number of future failures. This feedback loop generally requires the cooperation of the HR department in order to be successful.
Next week, in Part 2 of this article series, we’ll look at some advanced tools for reducing the number of bad hires you make and increasing offer acceptance rates.