Making the right hiring decision proves to be a challenge for many organizations. According to recent survey research, nearly three in four employers are affected by bad hires. Even worse, about two-thirds of candidates have accepted a job only to later realize it was a bad fit—half of them go on to quit within six months.
The cost of these poor hires can add up quickly. According to Harvard Business School, the cost of a poor hire can be as high as 3-5 times the employee’s annual compensation. For an employee making $50,000, then, a hiring mistake can cost up to $250,000. Making just a few mistakes can easily cost a company millions, which puts plenty of pressure on managers to make better decisions.
Fortunately, there are a number of strategies that can help companies make more objective hiring decisions. Here are a few tips organizations should keep in mind when assessing candidates:
1: Don’t “Go With Your Gut”
Many hiring managers fall victim to the “first impression bias,” meaning that they make a decision about whether or not to hire a candidate within the first five minutes of an interview. This gut-based decision process has very little evidence to support its effectiveness. In most instances, it gives only a surface level view of a candidate, often on the basis of style rather than substance.
The tendency to abandon hard data and systematic approaches to hiring in favor of more intuition-based reactions is surprisingly common. Research into hiring practices has shown that hiring for “likeability” is among the leading causes of hiring mistakes. While there’s something to be said for a candidate making a good first impression, the selection process is more likely to be successful when it provides measurable data and assessments over a general impression and emotions that may not be related to the position.
2: Have a Systematic Interview Process
Interviews are an excellent opportunity to assess a candidate’s soft skills, but in many cases the interviewer uses an ineffective process that produces little in the way of useful information.
One such approach is the unstructured interview, which is a very loosely organized conversation with no predetermined plan. The interviewer determines their questions and interview tactics in the moment, meaning that not every candidate will be subjected to the same scrutiny. In addition, the questions may not be based on competencies or outcomes that are relevant to the job. Such interviews are erratic and typically not effective— simply flipping a coin would produce equally good hiring outcomes.
At the other extreme are highly-structured interviews, which are thorough but very rigid and inflexible. Interviewers ask candidates a list of predetermined questions in a specific order, which can make the process too restricted to produce meaningful insights. In some cases, the same information could have been gathered by way of a review of the resume or a written questionnaire.
A systematic interview, on the other hand, combines many of the features of structured and unstructured approaches. In a systematic interview, the interviewer follows a consistent plan to ensure that each session generates valuable information, but also accounts for the unexpected. This approach gives interviewers the flexibility to pursue new lines of inquiry, but also retains enough structure to keep the session from getting off topic while maintaining a level of consistency from interview to interview.
3: Make Sure You Have Good Competency Models in Place
It’s expected that organizations know what skills are required for any open positions, but this isn’t always the case. In many instances, hiring decisions focus too heavily on technical competencies, neglecting many of the soft skills necessary to collaborate and manage teams effectively. When an organization experiences unusually high levels of turnover and has difficulty retaining recent hires, the problem can often be traced back to a flawed competency models.
A well-designed competency model should establish the traits and characteristics an ideal candidate should possess for a specific position. Competency models are not so much a job description as a model of observable and measurable behaviors that can be integrated into the hiring process. They reflect the company’s values and clearly describe the expected outputs of the position.
As an element of the hiring process, competency models can help ensure that candidates possess the appropriate skills, characteristics, and style needed to be successful in the position. They can also help to give a sense of what the candidate’s future path in the organization may be after they’re hired.
4: Don’t Forget About Culture
As a general rule, it’s important to find candidates who are a good fit for the organization’s culture. Hiring someone who has the skills and experience required to do the job but proves to be a “bad fit” from a cultural standpoint can cause disruption and tension that undermine productivity.
Culture goes beyond a mission statement. It addresses the values, expectations, and processes that define how an organization both functions on a day-to-day basis and sets goals for the future. When evaluating candidates, companies need to consider what traits are most important to preserving and promoting this culture.
At the same time, hiring strictly on the basis of culture carries a number of hidden dangers. Focusing on too much on good “cultural fits” could produce workplaces filled with people who all look, think, and act the same. This lack of diversity can actually stifle innovation and make it harder for the company to adapt to changing circumstances. At its worst, hiring for cultural fit can lead to a form of discriminatory bias along a number of lines (race, age, gender, etc).
5: Leverage Technology
Innovative human resource departments are increasingly leveraging technology to make better hiring decisions at every level of their organization. Far from replacing the traditional role of HR in the hiring process, artificial intelligence (AI) has proven to be an incredibly powerful tool that allows organizations to screen, interview, assess, and hire candidates faster than ever before. In addition to counteracting the potential impact of implicit bias, AI software can create a multi-faceted picture of candidates by compiling information disclosed in resumes and interviews along with publicly available information scattered across social media channels.
AI has also facilitated faster and more effective onboarding for new hires, allowing them to get acclimated to their new position and integrated into the workplace with minimal disruption. Virtual training and micro-learning software allow new hires to quickly and efficiently map out their development within an organization, which can increase retention rates and bolster the potential leadership succession pipeline. Online assessments and situational judgement tests (SJTs) can also help to screen candidates to identify who is best suited for leadership positions and future development.
The hiring process doesn’t have to be a hit or miss undertaking based on intuition and luck. Organizations can easily implement a number of measures to better systemize their hiring and assessment practices in ways that are repeatable and scalable. By using a more robust approach to hiring that accounts for core competencies and diminishes the impact of bias, companies can conduct smarter candidate searches that are more likely to result in success.