Hiring Great People

by

Mickey Fineberg, Ph.D.

The complete text of the article started in the Fall 2003 newsletter

Small business owners reap strong returns in productivity and peace of mind when they hire the right people.  Selecting good to excellent contributors is likely among the top 5 competencies of small business leaders.

Hiring mistakes are extremely costly in terms of such factors as lost orientation and training time and expenses; lower productivity and morale of those the problem employee impacts; missed opportunities; erosion in customer loyalty; etc.

Some facts to consider:

·       66% of hew hires will disappoint in the first year

·       66% of employees would rather work elsewhere

·       95% of applicants exaggerate experiences

·       Turnover cost 1.5 times the employee's salary

·       80% of turnover is avoidable

Many business owners take 10 minutes to fall in love, the rest of the time defending their choice, and then regretting their impulsive decision after hire.  Most hiring based turn-over is avoidable with the proper due diligence.  In predicting job achievement, the chart below reflects four key factors and their approximate contribution to successful hiring decisions with mistakes avoided 85 to 95% of the time.

Before looking at each of these key factors, it is first important to be clear about what you want:

·       What is the role you want the person to play?  If it's a sales job, is prospecting for new business opportunities critical, or does the job focus more on account management.  If it is a management job, does the position require the execution and improvement of pre-existing policies and procedures or developing new processes from scratch?

·       Where does the job fit?  Will the person report to you or someone else?  If the individual reports to someone else, what would be your real involvement in providing direction?

·       What changes does the new hire have to make?  What is the real authority for the person to make changes?  ("I want you to create stronger performance accountability among the inside sales group, but you may not fire Jennifer who has been with us for over 10 years.")

·       Identify the right cultural fit.  This is pretty important.  Culture is the organizational style, or the standards of conduct within your company.  Are people expected to operate independently without a lot of coaching or support?  How are decisions made, by consensus or pretty much by one person?  Is your organization informal and loose or is there a lot of structure and discipline?  Is there a lot of positive recognition in your environment, or is feedback more about apprising people of their mistakes?  75% of key managers fail because of style or a bad cultural fit.

Factor 1:  Education and Experience

·       Look for a reasonable match, not the perfect fit.  The micrometer fit approach can overly diminish the importance of considering the right person.  For example, if you own a specialty retail store, it may be better considering someone who has savvy in retailing and merchandising than being too concerned about whether the person has specific experience in your retail specialty.

·       Look for reasonable stability and progression.  A lot of job changes, for whatever reason, could spell problems for you.  The lack of advancement could also be a red flag.

·       Watch for sudden changes in role.  For example, if you want an office manager, be wary of the candidate with office management experience who was placed in an individual contributor position during the last two years with her prior employer.  There may be a big problem supervising others.

·       Similarity of environments/culture:  If you have an unstructured, opportunistic and resourceful culture, watch those coming from more structured settings where clear guidelines, rules and hierarchical approvals are involved in most decisions.

Factor 2:  Interview Style and Substance

·       Limit the time explaining the job and selling your company.  Let candidates sell you on selling them.

·       Ask open-ended questions and listen.  You will never get to know someone if you do the talking.

·       Ask personal questions that are legally o.k. to ask.

-        What does socializing at work mean to you?

-        How do you argue?

-        What do you like to do in your spare time?  (One owner discovered a candidate who had hobby that required him to leave work 3 days a week promptly at 5:00 P.M.  He also appeared more enthusiastic about the hobby than the job.)

·       Visit with the candidate several times in different formal and informal situations.  Give familiarity a chance to breed respect or contempt.

·       Have the candidate do an assignment or project for your company (paid or unpaid).

·       Expose the candidate to both group and individual interviews.  Candidates may react differently to position, gender, ethnic group, age or style differences.

·       Some companies have their top 2 or 3 candidates interview together with the business owner and other key people.  It's like going to the SPCA and sitting with a bunch of puppies.  The best one will likely stand out and come to you.

Factor 3:  Guerilla Referencing

·       Talk to other people, not just those your candidates give you.  Let them know you will be calling others, but ask if they have concerns about it.  Their answer to this question may tell you something important.  Call peers and subordinates, not just bosses.  When you talk to references, promise confidentiality and say you are looking for the best fit in the best interest of yourself and the candidate as well.

·       Ask open-ended questions and listen between the lines (damming with faint praise; what they can't or don't say about the candidate; etc.).

·       Verify titles, roles and position durations.

·       Do background checks.  There are service companies that do them cost effectively.  (I once had a great track record testing sales people for a material handling equipment distributor.  I had one candidate who tested particularly well.  Based on test performance and attributes observed from the other factors, the client went ahead and hired the candidate.  After three months on the job, the guy robbed a bank.  When the client called to tell me, I said, "if you could've keep him out of jail, he would've been a heck of a salesperson."  A subsequent background check uncovered no criminal record, but did show severe financial problems and a related gambling habit that could have stopped this hiring mistake.) 

Factor 4:  Aptitude and Personality Assessment

·       Aptitudes relate to the intellectual challenges of the job and related analytical, administrative and communications requirements.

·       Personality involves preferences, values, attitudes and style, all of which can impact job performance.

·       Assessment may provide new information.  For example, testing may indicate that an impressively forceful candidate may be driven by significant, in-depth insecurity.

·       Assessment may confirm, clarify or put into perspective, information from other screening factors described above.  For example, the term indecisive is described by some references.  Assessment may indicate that the candidate is cautious when dealing with individual performance problems, but not hesitant at all when is comes to other kinds of job decisions.

Assessment Strategies

·       Sales, service and administrative jobs with 10 or more people in a position:  After job analysis, administer selected test to people already in the job and identify the assessments that impact actual performance differences.  Use the performance discriminating tests with new job candidates.

·       Capital-intensive sales and key professional and managerial positions with 1 to several people per job:

-        In-person psychologist interview and complete assessment battery.

-        Complete assessment battery with telephone screening by a psychologist.

-        Complete assessment battery (selected based on the content of the position) that a psychologist analyzes and reports on without seeing the candidate. 

·       At the very least:  Use an off-the-shelf assessment program without direct psychologist involvement.  Some examples are:  DISC Style Analysis (Target Training International and Carlson Learning); Caliper Profile (Caliper Corporation); Predictive Index; Gallup (The Gallup Organization); Prevue (Prevue Assessments International) 

In summary, accurately and honestly identifying job specifications that are aligned with your culture and the proper due diligence when considering education and experience; interview form and substance; reference checks; and the right form of assessment; will go a long way to hiring truly successful contributors.

Dr. Mickey Fineberg, Ph.D. of Delta Consultants is a business psychologist and fellow member of BottomLine Partners. For the past 24 years, he has counseled business owners and managers on “human problems” to help them work more effectively, achieve high productivity, and select and retain high quality people. Mickey can be contacted at 888 613-0279 or through his web site: www.deltaconsultants.com.