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Does Your Hiring Process Resemble a Trip to Lost Wages?

by Charlie Hauck

And I don’t have to tell you why people call that place Lost Wages, do I? I am headed there to present to a group of business owners soon, so the idea of what really goes on in most hiring processes struck as cruel irony. Phrases like Resume Roulette and Credential Craps started coming to mind as I thought about my program. Just because a candidate’s resume looks like he or she is an ace doesn’t guarantee the face card will follow for a winning hand of Black Jack. It is scary to think how often people have said “hit me” only to bust on what looked like a sure winner.

How much does it cost?

When you consider the bottom line impact of a hiring mistake, Lost Wages could not be a more appropriate reference. Some people calculate the cost of a bad hire to be 1.5 times the annual salary of the employee. And depending on the industry, or the level of the position, that figure could be very conservative. Despite hard times, we still hear of companies where turnover is as high as 15% in some areas. That math is staggering when you consider there are enough tools available to minimize hiring mistakes. Why so many business leaders/owners still consider assessments or testing to be an unnecessary expense shocks me.

It’s not real money is it?

The costs of bad hiring practices may not show up on a balance sheet as a line item, and perhaps everyone has just accepted them as just the cost of doing business, but when the impact of not making the right choice is so high, how can companies afford to not do things differently? Upgrading your IT system happens because you found something that is more efficient and can help your profitability. Doesn’t it make sense to upgrade the expectation of what kind of human assets you add to your organization?

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What does the North Star have to do with Business?

01/27/2010 Leave a comment

I know where the North Star is with 100% certainty. It’s like death and taxes. Unless someone moved it, or everything written about astronomy over the last few hundred years is just a big hoax, it’s usually pretty easy to find if you know where to look. Sometimes when the conversation comes up with others, and I show them where it is, I’ll get a reaction like this … “No, that’s not it. It’s not the brightest. That’s not North”, or some other reason for them to dispute the reality. Although they obviously don’t know where it is, they are almost certain of where it isn’t.

What’s the point Smarty Pants?

So when we recommend to managers that are selecting sales people to use an assessment before making a hiring decision, we sometimes get a similar reaction like this …  “No, they don’t work. I don’t want to spend the money. I’ve done it before. I can trust my gut. But we know him or her.” … and all the other reasons.

OK, I’m alright with skepticism up to the point where it doesn’t fly in the face of the truth or the proof. The stats for our assessments are this: When you follow the recommendation to Hire, there is a 94% chance of success. When you ignore the recommendation Not to Hire, your chances of success go down to 25%. Those stats are based on hundreds of thousands of real life data points and have been back tested to confirm the validity. No doubt that 94% isn’t as sure as 100%, but it’s pretty darned good when it comes to understanding the future potential and production of a very important and expensive asset.

Is it really that simple?

No it is not that simple, so don’t believe it when you hear it. Nothing is that simple anymore. Using an assessment is just a part of a process. First, it has to be the right assessment. Too many products out there are marketed to have the same effectiveness, but the truth is that they do not have the same predictive validity. Secondly, potentially good sales folks can easily be de-railed by a weak on-boarding plan, mis-alignment of sales management, insufficient coaching, poor fit with the work environment or many other parts of the process. Being blind to these others factors is probably the reason that those who have used an assessment in the past no longer believe in their usefulness.

Next time you get ready to put on a new sales rep, can you please ask yourself how certain you are of the parts of your process?

Hire Slow, Fire Fast?

11/12/2009 1 comment

Does it really have to be that way? Sure, there are lots of management courses that suggest that the old “Hire Slow, Fire Fast” process is a best practice, but there are plenty of things that have to have to go right along the way. Hiring slow the right way can make firing fast a non-issue. If so, then starting the process right pays huge dividends

Is everyone suddenly a Super Star in their own minds?

Using a proven methodology to select long term, successful hires that can and will sell ends the merry-go round practice that has become acceptable for many sales organizations.  The “hire three, keep one” stories exist in any economic condition, but with so many resumes touting a career as a top producer hitting the streets now, this practice can be even riskier. When you read these submissions it is truly hard to believe that such high producers and proven winners ever got let go at all. How did so many all-stars meet the fate of down-sizing all at the same time?

Don’t be duped

With everyone claiming they are competent, your process must include some tools and practices that separate the wheat from the chaff. Stop trusting your gut and intuition. No one’s resume says they performed poorly or got axed by an unappreciative manager, so buyers beware. Do the right thing and get some outside help. If two heads are better than one, get a second head or at least an instrument that can validate your gut feeling.  Slow down and make a selection that will last. It can’t be any worse than doing it all by yourself.

Can you believe a company cannot fill job openings?

This article in the Pittsburgh Business Journal caught my eye this morning:

I guarantee you 95 out of 100 people I ask would tell me there are no jobs out there. Yet this article relates two companies who cannot find qualified talent. I especially liked this comment: “Many candidates’ resumes they’ve received, however, have been job-searching for months and seem to be more interested in getting a paycheck than being a fit with the company.”

When in our upbringing did we get the message ‘the world owes us a living’? I talk to many folks in their 20’s and 30’s who have not yet figured this out, and people in their 40’s and up who still don’t get it either. Perhaps this recession is just what the doctor ordered for our country? It is not outsourcing, illegal immigrants, government bailouts, the Internet, or any other excuse you want to make for not being able to find work. It is the fact that somewhere along the way, our skills did not keep up with what the marketplace is willing to pay for. Go find a marketplace problem and commit to helping to solve it. Someone will pay you to do that!