If you conduct a root cause analysis of hiring mistakes, the following big issues stand out:
- Most hiring managers don’t devote enough time or effort to hiring.
- Most hiring managers don’t know how to match people with jobs. This is a combination of weak interviewing skills and lack of job insight. (Weak management skills could also be part of this problem.)
- The assessment process isn’t sensitive enough to discern differences among comparable candidates.
- The voting process is flawed. Negative votes are more heavily weighted than positive votes, even from those who have conducted superficial interviews.
- An underlying risk aversion attitude assigns value to skills and experiences rather than potential. Part of this is due to the fact that measuring potential is both more difficult and more subjective.
- Emotions, biases, and first impressions play a powerful role in how the interview is conducted and the final outcome. Interviewers tend to look for facts to justify their initial reactions.
Unless these underlying issues are addressed, it will not be possible to make hiring top people a systematic business process. This is Hiring 2.0. Consider this. Hiring is the least sophisticated business process (compare it to manufacturing, product development, accounting, distribution, customer service, sales), and for most companies is more art or luck than science. Despite its alleged importance, it gets minimal funding and receives only limited attention, usually when things go bad. Given its importance to individual and overall company success, it should have board-of-director-level attention. At the other extreme, shouldn’t it have at least the individual hiring manager’s attention when he or she needs to hire someone new? Why isn’t the proper attention given to the hiring process? I think it has to do with the time value of time. I know most of you are familiar with the “time value of money” concept. For those of you who aren’t, the basic idea is that a dollar in the future has less value than a dollar today. This is due to the affect of inflation. So if inflation is 5%, the dollar you’ll be receiving next year will only have 95% of the purchasing power of a dollar you have today. That’s why you need interest on your money at least equal to the rate of inflation to stay even. High inflation worsens the situation. For most of us, future time is far less valuable than current time. If you’re working really hard, or behind on an important project, an hour or two today is more precious than gold. Squeezing an hour into a day already filled is impossible. But next week or next month or next year ó well, that’s a different story. We all have plenty of future time. We’ll waste this without thinking twice. Remember that two-day offsite workshop you booked six months ago, the one that’s coming up next week? At the time, it seemed like a pretty good idea. But now, with two killer projects behind schedule and everything else that’s running late, delaying it or forfeiting the $2,000 doesn’t seem like such a bad idea. Making the money to time conversion, the “time value of time” concept says that an hour in the future has less value than an hour today. So for hiring, how much is a future hour worth? Most managers complain that they don’t have enough time to devote to hiring. As a result, they resist spending 20-30 minutes talking to a recruiter to define the work, won’t go out of their way to meet a hot candidate, reluctantly conduct a series of superficial interviews, and hire the first candidate who is personable, communicates well, on-time, well-prepared, and who makes a good first impression. How much time is spent every week managing people who shouldn’t have been hired in the first place? My guess is that every bad hire costs the hiring manager at least three or four hours per week in extra supervision and lost productivity. The negative impact on others in the department is probably another three or four hours per week. It could be worse, but let’s use this to make the present vs. future time value comparison. A bad hire costs the manager and the department at least 24 lost hours every month. To prevent this bad hire would have taken a one-time investment of four to six hours in total time, spread across a few weeks. This involves writing a better job description, working with the recruiter, and conducting more thorough interviews. Under these assumptions the cost of time is equivalent to a 400% inflation rate per month (24/6), or 4800% per year! In other words, managers consider future time essentially valueless when it comes to hiring. This is the real cost of bad hiring ó the loss of invaluable time. Past bad hiring decisions prevent current good hiring decisions because managers don’t have enough time to do it right. You might want to work this analysis through with a few of your hiring managers to get their attention. Breaking this cycle is the first step to making better hiring decisions. Many years ago I heard this quote. It does a great job of summarizing this time value tradeoff: “Hire smart, or manage tough.” It was attributed to Red Scott, a well-known speaker, trainer, and corporate executive. His contention was that most managers “hire dumb.” They take shortcuts, use too much gut feel, don’t know the job, over talk, and under listen. This is a recipe for disaster. You can never atone for a bad hire. There just isn’t enough time. The trade-off is pushing people who don’t want to be pushed, more time involved in solving problems that don’t need to exist, lost productivity, more coaching, more training, more negotiating, more aggravation, less team work, and so on. The consequences of bad hiring decisions are faced every day with lost efficiency and extra time devoted to getting it right. Ask your managers if they’d have more time if they had better people. Here’s another way to look at this “time value of time” issue. Consider one of Stephen’s Covey’s seven habits of highly successful people, “Put First Things, First.” Covey contends that activity should be prioritized around four quadrants:
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- Highest level priority: Urgent and important activities
- Second level priority: Important, but not urgent
- Third level priority: Urgent, but not important
- No priority: Not urgent and not important.
According to Covey, we get in trouble when urgency overrides importance. In the case of hiring, usually some more urgent but less important task project steals time away from hiring smart. The cause is usually managing someone who shouldn’t have been hired in the first place. On the job, this looks like projects that are messed up, problems that aren’t solved, plans that aren’t met, unhappy customers, and aggravated team members. Bad hiring decisions affect everything. and everyone. The real cost of a bad hiring decision is that it perpetuates future bad hiring decisions by stealing time. Recruiters can break the cycle. For one thing they can research the job before ever talking with the hiring manager. One way to do this is to find out what the best people in the job already do. Doing a better job of assessing and screening candidates can also help. Don’t leave it up to the manager to be the technical screen: take on this responsibility yourself. If you send in fewer and better candidates, the hiring manager will give you more time up-front learning about the job, and devote more time to conducting a thorough interview. Go out of your way to make every minute spent by a hiring manager meaningful. You’ll need to go out of your way to make every minute you spend more meaningful, too. As an action plan, figure out 10 ways you can help eliminate wasted time. For one thing, consider how much time is spent talking with or reviewing the resumes of unqualified people. This is one of the biggest time traps of them all. A manager has two choices: Hire hard, and manage easy. Or… Hire easy, and manage hard. Recruiters can help them make the right choice. They must. It’s about time.