Hiring the wrong candidate for a position is more than just a personnel mistake. The decision can have serious financial consequences for an organization in both the short and long-term. Simply replacing an employee can cost between 100-300 percent of their salary, and for senior executives, the cost can exceed 400 percent. In the long run, however, the costs can be even higher if ineffective leadership or succession disruption prevents a company from meeting its business goals.
Despite the consequences of making a poor hiring decision, companies seem to have a habit of doing just that. Nearly 75 percent of companies report being affected by bad hires while about two-thirds of candidates who accepted a position later realized it was a bad fit. Part of the problem is a lack of process. A surprisingly large number of hiring managers make a decision about whether or not to hire a candidate within five minutes of meeting them, while others fall victim to “cultural fit” hires that results in workplaces filled with people who think, look, and act the same way. They may also overlook high-potential candidates in favor of more “seasoned” hires who may not be well-suited to leadership roles despite their experience or prefer to bring in external candidates when there are internal candidates ready, willing, and able to take on a bigger role in the organization.
Without a robust and objective assessment methodology in place, companies will continue to struggle to identify high-potential candidates and make informed hiring decisions based on organizational needs. The long-term consequences of not implementing a coherent assessment process can be quite damaging; not only will companies continue to select poorly suited candidates, they will also fail to develop, and ultimately, retain, the quality internal candidates they already have.
Fortunately, there are a few steps organizations can follow to ensure a more successful hiring and selection process:
1: Develop Success Profiles
The first step in any selection process is to clarify the primary objectives and set a timeline to accomplish them. If the goal is to hire for a specific position, companies should develop a plan for determining what they hope to accomplish with that hire. Do they want a candidate who will take over existing responsibilities or are they looking for someone to implement significant changes? Knowing what they want out of a position can help ensure that companies use a selection and assessment process that’s in line with their business goals.
Once an organization knows what it wants to accomplish with its selection, it can begin to gather information from company stakeholders and employees to develop a comprehensive picture of the skills and behaviors a candidate will need to be successful in the position. This success profile should include a range of desired competencies and also take cultural fit into consideration.
Developing a success profile also makes it easier to identify which assessment tools are best suited to evaluate candidates. Not every position will require the same competencies, so it’s important to determine how success should be measured. Creating guidelines for assessment ensures that decisions will be made systematically rather than relying on factors that have little to do with the success profile, such as tenure or “going with your gut.”
In addition, a realistic job profile that provides an in-depth look at a typical “day in the life” of someone in the prospective position, can serve as a valuable guide during the recruiting and selection process.
2: Assess Candidates With a Variety of Tools
With a success profile in place, organizations have a much better idea of what they’re looking for from a candidate. This allows them to focus on using the appropriate assessment tools to evaluate the critical competencies candidates possess or could develop with training and experience.
Selection processes should go beyond traditional interviews with the candidate to include assessments like leadership questionnaires that measure key characteristics, preferences, and motivations, and reference interviews with colleagues, direct reports, bosses and customers or 360-degree feedback surveys to understand how the candidate is perceived by others. Simulations, group exercises, and situational judgement tests also provide a valuable range of information about candidates and how well they fit the position’s success profile.
It’s important to remember that the selection process isn’t just about filling a single position; it’s also an opportunity to identify high-potential employees who could be groomed into successful leaders in the future. Comprehensive assessment processes make it easier to find and cultivate these individuals to form a robust leadership pipeline that can be used to fill other positions as they become available. While there’s nothing wrong with considering external candidates for these positions, having a deep “bench” of potential leaders who already fit existing success profiles makes it easier to navigate the often treacherous waters of succession management.
3: Provide Feedback to Key Stakeholders to Inform Decisions
Once assessment data is collected, it needs to be presented in clear, concise form to key decision makers who will be making selection decisions. Having a data-driven process to inform decision making helps to ensure that selections will not be made hastily or on the basis of bias or instinct.
Hiring “truisms” like rejecting people with a history of switching jobs or favoring tenured candidates often have very little empirical data to support their effectiveness. By implementing a more rigorous and methodological approach to selection decisions, organizations are able to use quantifiable assessment data over less reliable habits that tend to reward qualities that have little to do with a position’s success profile.
By approaching hiring situations as assessment opportunities, companies can make more informed decisions and gain a better understanding of the high-potential employees they already have within their organization. Establishing comprehensive success profiles for positions allows them to tailor the development of those high-potential employees in ways that create a healthy pool of aspiring leaders who will be ready to step into leadership roles when the time is right.