Lies, Deception and Gut Feelings … No Wonder Hiring Fails Half the Time

The Top 7 Reasons Why Your Process Continuously Produces Hiring Failures

Unexplainably, few in corporate recruiting attempt to measure the failure rate of new hires from their external hiring processes. However, those who have done the research (i.e. Harvard Business School, The Corporate Leadership Council, and LeadershipIQ) have found that the failure rate within 18 months of hiring for most jobs is 46 percent and for executive hires, it can reach 60 percent. Obviously, if any other corporate process failed at a rate anywhere near 50 percent, it would be immediately scrapped, but for some reason corporate recruiting processes drone on with little change. I define a hiring failure as a new hire who voluntarily quits before their first anniversary date and any new hire who within 18 months was terminated, left under pressure, received significantly below average performance reviews or who was placed on official disciplinary action.

Anyone who takes the time to scientifically examine the traditional corporate hiring process would quickly realize that it fails so often because it is built on a house of cards because so many steps in the process are dominated by lies, deceptions, and gut feelings. For example, few are truthful in their resume (lies), most strive to tell you what you want to hear during interviews (deception). And because managers use gut feelings to make many hiring decisions, hiring managers can have an interview assessment accuracy rate of as low as low 0 percent.

The recruiting process is currently ranked No. 1 among all talent management actions for producing business impacts on revenue and profit. But imagine how much larger its business impact would be if its embarrassingly high failure rate was cut in half? 

Unfortunately, Lies, Deception, and Gut Feelings Dominate the Hiring Process

Most recruiting leaders and nearly every corporate executive are not aware of the extremely high failure rate of the external hiring process. And the reason there is an absence of alarm is that the “new-hire failure metric” is seldom calculated, reported, or is its dollar impact calculated. And until recruiting collects data that connects the cause of hiring failures directly to these inaccurate aspects of the hiring process, nothing will likely change. Incidentally, candidates may also be guilty of “gut decision-making” because the recruiting firm Challenger/Gray estimates that “25 percent of all workers regret taking their new positions.”

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But let’s now push aside the failure numbers and see the top seven reasons why most corporate hiring processes experience these ridiculously high rates of failure. The hiring components with the highest negative impacts are listed first.

  1. Resumes stink as a selection device — by design, all resumes are written from a totally biased perspective, because they are written with the goal of making the owner look as good as possible. We also use resumes as a primary selection mechanism despite the fact that by design, they omit all negatives. It is 100 percent positive by design because all negatives and shortcomings have been purposely omitted (no one in their right mind includes errors and negatives in their resume). Resumes also contain many lies. In fact, as many as 78 percent of resumes are misleading and 53 percent contain outright misrepresentations. In addition, the very best candidates may, despite the capabilities, still, have weak resumes … not because they haven’t performed in previous jobs, but because they don’t have time, are reluctant to brag, or they have weak marketing skills. In addition, if the writer is not skilled at populating their resume with the right keywords, their resume may never even be seen by a recruiter or hiring manager. And because corporate recruiters average only 6 seconds reading a resume, the scanability of a resume becomes more important than its content.
  2. Interviews take a lot of time but they predict about as good as a coin flip — no less than Nobel laureate Daniel Kahneman found that in his experience, interviews were “almost useless for predicting the future success of recruits.” Interviews are also full of deceptions. Obviously, during the interview, the candidate is trying to tell a story that makes him/her look great. But despite their job-related capability and their experience, if they are not good at telling stories under the pressure of an interview, they’ll never get hired. There is a great deal of deception during interviews because most interviewees are striving to provide answers that they think that the interviewer wants to hear. Interviewers are at the same time purposely limiting information about the negatives of the job, the manager, and the firm. Interviews are also subject to the gut decision-making whims of the interviewer. And because it has been estimated that 90 percent of corporate interviews are unstructured, most interviewers currently have unfettered discretion to ask brainteasers and other non-job-related questions that have no predictive value. And in direct contrast, interviewees are seldom asked to solve any of the real problems that they will face if they get the job, even though work samples have the highest predicted value of any selection device. One academic study even found that companies would be more effective in selecting good candidates if they looked at the resume/background information only, and skipped the interview completely.
  3. The job selection criteria used are often inaccurate — the job selection criteria used by recruiters and hiring managers to screen in candidates are often not chosen in any scientific way (many managers make them up on the fly). And as a result, these selection criteria are not accurate predictors of on-the-job success. Many commonly used selection criteria like years of experience, grades, and the school attended may result in an unconscious bias toward factors that don’t accurately predict on-the-job productivity (years of education ranked No. 16 out of 19 on the best predictors of job success meta-analysis list). Obviously, if you’re looking for the wrong job skills and experience (that are based on a manager’s gut feelings), the odds of a hiring failure increases dramatically.
  4. Fit assessment is subjective and inconsistent, so it is often highly inaccurate — after identifying whether the individual can do the job, most want to add another assessment step, which is to determine if the individual “fits” with the organization’s culture and way of doing business. Fit assessment is a critical determination because if a candidate fails it, they are permanently ruled out. And as a result, there’s no way of ever knowing whether (despite their negative fit assessment), they would’ve still turned out to be a top performer. In addition, the underlying assumption of fit is that individuals are rigid and that they can’t change or adapt to a new culture (which in my experience is completely untrue). Fit assessment becomes even more problematic because few firms clearly define what they mean by “fit,” most assess it subjectively using their gut feelings, and the fit assessment criteria vary dramatically between hiring managers. There is, of course, a great deal of deception during fit assessment because candidates will strive to provide the answers that they think the interviewer wants. Unfortunately, there is never a feedback loop with the exit interview process that reveals how many new hires left because they didn’t fit. And without this data, there can certainly be no proof of a correlation between fit assessment and on-the-job performance at an individual firm.
  5. The reference checking process fails to predict on-the-job success — in a meta-analysis covering the selection methods with the highest predictive accuracy, reference checking was ranked No. 13 out of 19. Using reference checks to select between candidates or to validate a single candidate is highly problematic because many individuals who provide references are biased in favor of the candidate (especially references provided by the candidate). In addition, because of lawsuits, most reference givers are reluctant to give any negative preferences. And even the information provided by references that attempt to be accurate may be misleading because success at a past firm may not be a valid predictor of performance at your firm. As a result of the subjectivity of the reference checking process, it is quite easy to get a “false positive” reference that indicates that a candidate meets your criteria, when in fact, they are actually quite flawed.
  6. The individuals making the hiring decision are not trained and may have unconscious biases — although many urge interview training for hiring managers, providing the traditional form of interview training doesn’t seem to have a significant positive impact on improving hiring results. One study illustrated the low impact of interview training when untrained strangers after 15 seconds of watching videotaped interviews reached essentially the same conclusions as interviewers who had been trained for a full six weeks. Because few managers have updated interview training, most involved in recruiting are not even aware of the many pitfalls that can occur during hiring. Many involved in interviewing also have unconscious biases which have a major negative effect on the selection of diverse candidates. In fact, some hiring managers have as high as an 80 percent error rate in selecting the best candidate from interviews.
  7. Despite what you’ve been told, history is not always a good predictor — most interviews are dominated by behavioral interview questions, which ask the candidate to describe how they behaved in the past (behavioral interview questions ranked No. 6 and job experienced ranked No. 14 out of 19 on the best predictors of job success meta-analysis list).This historical approach might seem logical on the surface. However, when you are hiring externally, the content of jobs and the best way to perform varies dramatically between companies. And that means that a successful approach undertaken in one company’s culture may not lead to success in another firm. Jobs and the approaches required to succeed in any job change rapidly. And that might mean that any job experience longer than two years may be irrelevant. Behavioral interview questions can now be found in advance on social media sites like Glassdoor, making it easy to prepare for them. And because there is no way to verify the specific answers during reference checking, these types of historical questions favor those who are willing and capable of embellishing their role and for taking credit for things that they were only tangentially involved in. A superior approach is (after explaining your firm’s corporate culture) to ask candidates how they would handle the job’s current problems under your firm’s corporate culture and values.

Final Thoughts

I’ve written in the past about the need to calculate new-hire failure rates. Once you realize that your firm’s new-hire failure is incredibly high (especially when compared to 6 Sigma standards), the next step is to identify why it has such a high failure rate. It fails so often because so many elements of the hiring process inherently contain lies, deceptions, and gut feelings. Because so many involved with corporate recruiting are quite comfortable with the existing impreciseness of the process, you shouldn’t expect any major changes until you quantify the dollar impacts of hiring failures and you shift to a data-driven hiring model where recruiters are rated on their new-hire quality.

At some point, you must institute a hard-and-fast rule that automatically eliminates any selection process that cannot prove that it accurately predicts new-hire on-the-job success. I for one don’t predict much of a chance for change at most firms. That is because after 40 years in this field I find that both recruiters and hiring managers actually like treating recruiting more like an art than a science. Because as an art, the current sloppy approach allows them to avoid structure, to ignore deceptions, and to freely use their gut and their intuition.

Dr. John Sullivan, professor, author, corporate speaker, and advisor, is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business-impact talent management solutions.

He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on staging.ere.net. He lives in Pacifica, California.

 

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7 Comments on “Lies, Deception and Gut Feelings … No Wonder Hiring Fails Half the Time

  1. Kudos to John for another crisp, hard-hitting, frontal attack an a major barrier to maximizing the value of talent– the oppressive dominance of lies and opinions in hiring decisions. Candidates tell lies (a.k.a. self promotion) and hirers form opinions (a.k.a gut feel). Resumes and interviews are the medium. But as with most things, those that have the gold set the rules– so why such a lame set of rules?

    It comes down to what’s hard, what’s easy, and what’s known as “the WIFM–What’s in it for Me?”. It’s easy to intuitively gain an impression of how much you like someone. It’s hard to accurately predict how well someone will perform at a progression of jobs over an expected tenure with a company, but it’s possible. The hard work begins with defining personal characteristics that lead to success, collecting unbiased accurate measures of those characteristics, and hiring the candidates who have the most of them. But the WIFM for hiring managers for doing the hard work instead of hiring people they like is not so clear. As John points out, until hiring managers are tracked and rewarded for their hiring success, the hard work doesn’t seem worth it.

    If the reader will allow me to whine on a couple of minor points, there is no evidence to support for the notion that situational interviews provide more predictive value than past behavior interviews. In fact, just the opposite (Google research authored by Bosshardt, Pulakos, and Schmitt).

    Interviews as a whole, and particularly unstructured interviews leave much to be desired, but the same meta-analysis (Schmidt and Hunter, 1998) that John cites elsewhere, also finds that structured interviews come second only to measures of general mental ability as the best single predictors of performance across all jobs based on 85 years of published research. It’s a good thing to be factual and hard hitting. It’s better to do that even when it doesn’t fit a particular thesis.

    In spite of the research that finds consistent support for behavioral interviewing (I published the first research and book on the topic) it’s clear to me that what works in the research doesn’t get practiced in the firld. Hiring managers often regress to asking non-behavioral questions, don’t re-direct candidates when they stray, don’t take behavioral notes, don’t rate each answer on the personal characteristics, and then don’t hire candidates based on who achieved the top score. Thus they also don’t hire the best talent from those that apply. Fortunately, the solution to all of this is on the way (see http://www.Plenarium.net/Objective-Interviewing). New forms of semantic analytics can objectively score behavioral interview answers to deliver on the unrealized promises of behavioral interviewing, largely by eliminating the primary source of bias and inaccuracy– the interviewer.

  2. Hi John, an excellent thought provoking article. Two things:

    1. If you come away from your interview without understanding what motivates your candidate, how they problem solve, and what they know about leadership, as a recruiter you haven’t done your
    job. You can ask all of the behavioral interview questions in the world, and not know these things. Fit isn’t about demographics, it’s about attitude and comfort.

    2. When, in our best glass is half full way, we are honest with candidates about what the job they are walking into is about, we are a lot more likely to land someone who is ready to take the hill. If we oversell the job and the new hire feels as though they have been taken for a fool, they are unlikely to perform well.

    Retention starts in the interview process when you identify and hire the right person for the right role.

  3. In a word: Yup.

    And I think you’ll find these problems stem from the industry being controlled by sales! people, who prefer to work in the grey areas of no standards and ‘art’ as opposed to science. They don’t want accountability. Which is why I’ve always maintained and written in past comments, recruiting needs less sales! and to start reaching out to other fields/industries like supply chain people and manufacturing specifically, where these failure rates would have gotten the entire industry canned decades ago.

  4. What about the other side of this equation? There are just as many recruiters and hiring managers who contribute to this failure for the following reasons:
    1. The have no idea what the job actually entails and thus provide the candidate with inaccurate information about the actual job.
    2. They flat out lie and say whatever they think the candidate wants to hear to get them to join the team, and pull the old “bait and switch” technique.
    3. They don’t fully understand their own expectations for what they are looking for in the right candidate and lack the skills to manage/lead or mentor the candidate to succeed in the role.
    4. They make promises they cannot keep such as flexible schedules, bonus, pay, travel to entice the candidate which they do not keep in hope the newly hired candidate will just accept these failed promises once they are in the job.

  5. Some of the stats are hard to believe. New hire failure rate almost half? Never saw this on my jobs. Did unrealistic expectations contribute? Same with 3/4 resume falsification. I don’t doubt ample resume embellishment and fibbing, but not that high. Could unrealistic job requirements be a contributor here too?

    The real bummer is that even the best (uncommonly used) evaluation methods are just so so. The most common are all but useless. As the article implies, the trend is to simply blame the candidate (pool) when something goes wrong, instead of examining a process everyone knows is completely broken.

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