Hiring, its tangents, trends, and techniques, is receiving a lot of attention. Yet there are only three basic techniques in procuring talent, buying, borrowing, and building. Buying talent is having someone recruit for you and paying them. Borrowing talent is hiring a contractor and paying them for a project or some period for their talent. Building talent is taking the talent you already have on board and developing it for handling more skills. However, tools and techniques surrounding the basic strategies is changing at warp speed.
Once upon a time, you could find talent writing a resume, and maybe a cover letter, sending it through snail mail, and waiting for a response. Today, talent has many options for getting your attention, and you have many more places to seek out that talent.
Organizations often lament high turnover and its costs. Indeed, it can be costly and there is a plethora of information on the internet, in books, white papers, and studies to assure you of this fact. But is all turnover bad? The truth is that turnover wears two faces as there is both good and bad turnover. OK, before you have me put in a straight jacket, hear me out.
Here’s a question for you, if a poor performer, toxic employee, or a bad fit for your culture quits, is that good or bad? It will no doubt be good. Now it may be that the toxic employee, just as an example, was there a long time and had become a sacred cow, that employee may take a lot of knowledge out of the organization. Losing the knowledge is bad, but you only have yourself to blame for allowing the toxic employee to remain as long as they did. In fact, the toxic employee may have been the cause of good, highly productive, and other knowledgeable employees leaving in the past and that’s bad. Thus, the two faces of turnover. What do these two faces look like?
The short answer is neither. The longer answer is a bit more complex. Nor is any organization likely to find the perfect workforce regardless of whether they use assessments or not.
The debate over the usefulness, accuracy, and even the legality of assessments has raged on for a number of years. For those who like to categorize everything into the black and white, right or wrong, good or bad piles, the true answer may not be that clear cut. According to recent research by Aberdeen Group, there is a shortage of critical talent and replacing an employee can carry a price tag of upwards of five times a bad hire’s salary. Therefore, it is evident that making good hiring decisions is crucial for an organization’s bottom line. Moreover, the use of assessments can have a positive impact on not only hiring, but retention, performance, and engagement.
Aside from measuring a potential candidate’s interests, backgrounds, strengths, and weaknesses, assessments provide other bonuses.
- Best-in-class organizations are 45% more likely to use pre-hire assessments
- Best-in-class companies are 95% more likely to have a consistent competency model used for hiring, [including using assessments consistently as part of the model].
- Companies that use assessments are 36% more likely to be satisfied with their new hires
- Organizations using pre-hire assessments with performance results are 24% more likely to have employees who exceed performance expectations.
- Businesses using pre-hire assessments in conjugation with performance results have employees who are 17% more likely to rate themselves as engaged.
- Assessments can provide information as to whether or are not an employee is a good cultural fit. Best-in-class companies pass this information along to manager
You can read the full report, Pre-Hire Assessments: An Asset for HR in the Age of the Candidate, at www.aberdeen.com
Those of us who tout the use of assessments as a critical tool in combating turnover, for increasing productivity, and improving customer satisfaction are also aware that cautionary measures must be taken in the use of assessments. So, no they are not the Holy Grail nor are they a wholly failure. Assessments are designed to be used in conjunction with the entire hiring process of implementing good search techniques, establishing performance standards, using good interviewing techniques, reference checking, and drug testing. Here are some other ideas to consider.
Gathering data for a variety of reasons is a big deal for business. In addition, not only are there a variety of areas a business needs to be collecting data in, but there are also a variety of types of analytics producing data such as predictive, descriptive, prescriptive, and causal analytics. Collecting any data can be time consuming and expensive. However, the answers and possible solutions data can bring are well worth the effort.
One area organizations should be collecting data in is Human Capital. While this is a new phenomenon for many, human capital analytics enjoys a long history. However, today there is a better cohesiveness and labeling around analytics. Further, there are new technologies and tools that help facilitate the gathering and interpretation of data as well as cost reduction. Yet, despite this, many organizations struggle with a few questions:
- Who should be on the analytics gathering team?
- How much should we budget for analytics?
- Which projects should we pursue?
- How should we use the data we collect?
- How can we sustain the practice of analytics?
Every person you hire will either improve your organization or detract from it in some manner. Hiring the “heroes” that contribute in a positive manner to the organization is a valuable strategic goal. People involved in the hiring process need to be your internal “hiring heroes” who maintain a constant vigilance in seeking out the “heroes” to hire. The good news here is that you can have both.
Many who conduct hiring interviews think they must ask the “magic bullet” questions or play gotcha’, or believe they are the ones who should make the hiring decision. None of this is necessary or even encouraged. Following some proven, effective guidelines consistently will produce candidates who are “Hero Hires.”
As a leader, when it comes to talent management, you often hear the call to not only have the right people on the bus, but also to have those people in the right seats. But what does that mean exactly? Yes, it means hiring the right people for the right position, but it also includes assignments the individual participates in once on board. Let’s look at some scenarios.
1. A frustrated VP and I were discussing a hiring project he was working on and that it had been assigned to one of his executives. When he told me this assignment was made six months ago and that no progress had been made, I began asking probing coaching questions designed to get at the core of the frustration.
It seems the assignment had been given to someone who is responsible for building business. Further, this individual is on salary plus commission. Where’s the motivation? This executive is not motivated to take money out of his pocket for a hiring project. Solution: Make the executive the chief advisor on the project and gather a few other individuals together who are not on commission or in sales and have them take on the hiring project.
CEOs focus on strategy and must also ensure their organization is financially sound. There is another critical concern and that is talent. The savvy CEO is the one who understands the importance of hiring good talent, ensuring a good fit, and then continuously developing that talent. Good talent pulls organizations through the good times, tough times, major changes, and navigating a crisis. But the CEO cannot and should not take on the talent task alone. One of the major partners in the talent effort is HR. However, the CFO should also be a part of that talent task triangle. Having these two partners in place is a great benefit to the CEO.
The job CAN talk. "Listening" to what the job says will help you make better position descriptions, job ads, and better hiring decisions.
There is a clear connection between engagement, performance and profit. Recruiting talented candidates is not enough; it’s crucial that people are assigned to the specific roles where their talents will have the greatest impact on achieving company goals, and where they are most likely to remain onboard fully engaged.
Manufacturing processes are consistent and produce quality products. Manufacturing processes meet specific requirements - consistently. A recent study cited in Inc. suggests that organizations that practice specific hiring practices are more successful.
Establishing standards is the foundation of quality. Job analysis plays a big role in establishing standards. How will employees know what targets they are supposed to achieve? How will managers know when a candidate has met the right criteria in order to put the right person in the right job? How will the organization know if jobs are meeting quality standards that customers demand?
Make it standard practice to both participate in and hold job fairs on a regular basis.
New times call for new techniques in virtually every area of life and recruiting is no exception. This goes beyond using technology such as social media and websites. For example, some organizations are using gamification. If a candidate is applying at a hotel, he or she can go on the website and run a department. An accounting firm allows the candidate to virtually “walk through” their offices and some departments in order to get a feeling for the environment. The recruiting wooing process goes even further by putting your best boot forward.
A “new trend" is the rehiring of employees. In fact, one small study reveals that hiring a CEO for the second time can result in higher stock performance over the immediate predecessor. The word “new” is in quotes as in the hotel industry, for example, this has been fairly common over the years and someone who leaves a hotel as your bus person or housekeeper, could very well return in a couple of years as your general manager. I’ve been rehired twice, once by a hotel and once by a utility company. While this may be a “new” trend, a point is made in an article in HR Magazine that it is becoming more frequent. Why is this? I’m glad you asked.
This is yet another trend in the wonderful world of work that we can blame on the younger generations. They figured out that the gold watch is not really worth all that much for a lifetime of loyal work. The younger generations change jobs and careers like some people change socks…frequently. This phenomenon has created yet another phenomenon referred to in the article as an “alumni” of an organization. Here’s how it works.
Recently attending a network event complete with a program, the essence of a quote from an HBR statement became glaringly apparent – along with the quasi-evidence that a stereotypical CEO is doing damage to an entire industry. Here is the scene at the front of the room consisting of about eight or so current and past CEOs and executives.
- All male
- All white
- All around 5’7” to 6’ in height
- All between 50 and 70 years of age
- Similar educations
- All of a certain religious sect (they made fun of those who weren’t – all in good fun wink, wink).
- All from the same industry
In fact, the entire room of about 100 to 125 people fit this description. Here’s the kicker, the industry is dying a slow but almost certain death. Here’s the quote from HBR on the CEO Genome Project:
Hiring the best talent has and will always be a challenge for any company, small, medium, or large. Organizations must have good talent to grow, beat the competition, and produce the best products and services. This will be the case no matter how much AI you weave into the mix. So, what’s the solution to the same old new hiring challenges?
Every company is known by the public via two distinct brands, its employer brand and its consumer brand. Understanding what distinguishes the employer brand and how it may affect attracting and retaining superior performers can be the difference between spring-loading out of a recession and not recovering at all.
One measure of an organization’s health is the state of its talent pipeline. Whether preparing for executive succession, filling open management positions as the need arises, or staffing new roles created by restructuring or growth, how ready is your company to fill key positions with star performers?
We all know that one of the main reasons organizations need to address turnover is that it is expensive. In fact, one source suggests that costs can range, on average, from $10,000 to $200,000 USD. When looking at total costs, many factors play into these estimates. Certainly, the level of the position matters. While a valuable employee, a janitor is a lot less expensive to replace that a CEO. Even at an average expenditure of $4,000 USD for a lower level employee, it is obvious that turnover can chew up your bottom line and spit it out.
Direct costs we associate with turnover are job postings, recruiting, drug testing, and background checks. Other costs that may not be as obvious are lost productivity, lost expertise, low morale, and poor customer service. These too are costly to both the bottom line, your brand, and may even lead to even higher turnover.