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Plan your work, work your plan! Isn’t that what successful people always say about the route to success? When it comes to recruitment and selection, or nearly any other people decision companies fail to plan the work. Therefore, failure to work the plan is typically number one in the list of management concerns about their business.
Businesses are full of planning, sales plans, expansion plans, marketing programmes, production schedules and so on. Such plans are well designed, managed, measured and are updated as required.
Where are your people plans?
However, when it comes to the people side of business, everything falls apart. Everyone seems to be happiest when they are flying by the seat of their pants. As a result, steps get skipped, corners get cut; plans fly out the windows. Because of this, standards slide, performance falls, competitiveness declines.
The business survives, but pressure builds, stress grows. Everything seems to be an emergency response to some crisis or other. Staff turnover becomes a problem; good people leave and morale falls. Work becomes a chore; employees no longer look forward to going to work. Managers lose sleep, even on weekends and while on holidays.
Ignore your people at your peril
Why is it that the single most important asset of the business is overlooked and ignored to the point that it becomes a burden for everyone. Richard Branson puts it very well when he says that your customers are not the most important thing in your business, your people are; look after your people, and they will look after your customers.
Without people there cannot be a business in the first place. Every successful business has been built on successful people. Successful people are above average people. Above average people are not hired, developed and retained without a conscious effort. That conscious effort is made a whole lot easier and better with a supporting plan.
Of course, in this globalised world we have had built around us, success today is measured in monetary terms and bigger is better. People are replaceable and disposable. Stress is good. People work in pressurised hot-houses and exploitation is what you do the people under your control.
Interestingly we are seeing a backlash against this model of corporate greed and general disregard for the well-being of the worker. It is not socialism or trade union activism. It is not even anti-business. Instead, workers are voting with their feet.
Once the idea of a job for life and the corporate loyalty went out the window, workers discovered that they could change jobs. Workers found out that they didn’t have to put up with remote directives that negatively impacted on their lives.
The business world is changing
We are seeing a shift in the workforce. Now that the economy is growing again despite the best efforts of Brexit, people are moving again. There is a concept solidifying in the workplace that “Potential moves toward Opportunity”.
On a global scale, this is shown in economic migration. In the past, only the destitute or the most adventurous migrated. Today Irish Engineers design and manage road construction projects in Europe and the UK. Only a generation or two ago their ancestors were labourers with picks and shovels. Barriers to such movement are falling. If you have potential, you can travel.
On a local scale, you can see this in the growth of local entrepreneurship. The craft brewing industry in one such example. Consumers are beginning to realise that if they want their families to stay together and their children and grandchildren to be around them in old age, they must support jobs in their local economy.
Today’s workers are increasingly aware of the value and benefit of taking lifestyle choices into account when they decide to accept a job. Those who know that they have potential are in the best position to exploit such options.
Make your people your competitive edge
In a competitive economy, smart employers are willing to accommodate such choices. Smart companies are building businesses around their people. Not just any people, but the right people. The shift can be a difficult one to get your head around, old ideas have a way of clinging to you like cobwebs.
The Labour Market is changing, and the successful businesses of the future have already have a plan for dealing with that.
In our last post, we began to explore some options in the Recruitment & Selection Process. One option that I said I would come back to is Psychometrics, so I will look at some of the pros and cons of investing in this technique. But mostly pros, because 30 years of experience shows me that psychometrics only enhance a selection process.
Why use Psychometrics?
To return to a point made earlier, “Recruitment and Selection” is all about discrimination. There is anti-discrimination legislation in most countries, it is easily circumvented and routinely is.
Discrimination is essential in selection. The difference, of course, lies in the kind of discrimination you use. There is positive discrimination, and there is negative discrimination.
Negative discrimination is using selection criteria that have no bearing on the role being selected for. Some of that is catered for in legislation. Much of it is personal and cultural bias
Positive discrimination is using the right criteria to discriminate between the right and the wrong person.
Psychometrics and Role Definition
So the starting point is always, to begin with, the right criteria or definition of the role. If you define the role, it is easier to find someone to fill it. Many psychometric systems have a tool to help you with this task. An instrument that allows you to describe the ideal candidate in terms of behavioural traits is ideal. It helps you overcome most of the difficulties of measuring these nebulous and qualitative traits.
These Role Definition tools allow the recruiter to canvas the views of the often many stakeholders in the role. In particular the views of those participating in the selection process. A primary source of error in selection comes from the differing expectations decision makers may hold about what makes the ideal candidate.
By defining the role in advance you will stand a better chance of having everyone sing from the same hymn sheet.
Behavioural traits are the key to successful discrimination since they are the valid and most accurate predictors of success. Forget about traits like skin, hair or eye colour, gender, accent, education, college or home town, they tell you little of value at this stage. They are more reflective of personal and cultural bias than valid discrimination.
Limitations of the Face-to-Face Interview
In a face to face interview, one rarely has the time or skill to thoroughly probe a candidate’s behavioural traits. Many useful questioning techniques can make our job a lot easier and more fruitful. However, it takes a highly skilled and experienced interviewer to do it properly. Skilled Interviewers are genuinely rare, despite what some people may claim. But skilled Candidates are ten a penny. Don’t be taken in without using an objective measure.
On the other hand, a psychometric assessment of a candidate will be validated during an interview by a trained and conscientious line manager looking to find the right person for their team. A psychometric assessment can guide the interviewer to the core areas for investigation. The right tool can highlight critical concerns and offer tips and guidance on how to prepare for the interview.
I used the word “conscientious” in describing a lesser skilled interviewer because a less careful interviewer will rely solely on the assessment. They will only use the interview to gather supporting evidence and not probe for contrary evidence.
The Biggest Risk of using Psychometrics
We know from validity and reliability studies that the major psychometric tools are highly accurate both in reliability and predictability when applied correctly. However, there are always margins of error, and a good interviewer will always make sure that they are not missing a great candidate or hiring a weaker candidate because of these error margins.
A lot of the successes and failures in any selection process at the end of the day will come back to Interviewer Bias and Judgement and that often abused concept of “Gut Feel”. At the conclusion of any selection process, the final decision is always a human decision. I will address this issue in the next blog.
For an example of a highly reliable, valid and easy to use psychometric system, take a look at The McQuaig System in Ireland, we have a track record in Ireland going back just over 30 years.
Recruitment & Selection is a bit like driving a car. If you want to drive on the highway, you need to follow a set of rules. If you want to drive off-road, you need the right machine. You can be fast and nippy like a motorbike; you can be middle of the road in your coupé, or you can drive a tractor and enjoy the scenery. But whichever route you choose, there are rules to follow.
What works and what doesn’t work in recruitment
Recruitment is an activity that feels right when you do it by the seat of your pants. Being led by “gut-feel” seems reasonable. Taking shortcuts saves a lot of hassle and time. Ignoring the rules can feel like fun if you are that kind of person. But the truth is that ignoring rules, taking shortcuts and relying on gut-feel, ends up with you hiring average or below average people. This just isn’t good for business.
Back to the driving analogy. When you set out in your car, or on foot, you usually have a destination in mind. Too often people think that a Job Title or even a Job Description is enough information to reach your goal. However, these documents are far too vague.
If you are driving to Dublin, the job title will get you there. A job description will guide you to the Northside or the Southside, it might even get you to the right Parish or exit from the M50. But it won’t take you to your granny’s house where you know you can get the best home cooking.
Research has shown us that there is little in the Job Description that will predict success on the job. Even a perfect match may be no better than average. Every time I think of this the line “It ain’t what you do, it’s the way that you do it”, comes to mind.
Think about your successful hires, the top performers who have come through your recruitment activities in the past. How many of them do you think of in terms of education, qualifications, training or even past achievements in earlier jobs? How many of them are successful because of their accent or appearance.
A bit of the science of recruitment
Take a sheet of paper and list the things that you feel make your top performers stand out from your average performers. You will find a lot of words in that list that describe behaviours. Now you have done your own simple piece of research into the science behind successful hiring.
The science shows the following with Level 3 providing us with the highest success rate.
The findings also give us some valuable insights into why we so often fail. We consistently ignore or do not probe the Level 3 factors because we find them challenging. This is despite often knowing that Level 3 is the most important level to focus on. Why? Because is is difficult. It is difficult because you may not know how to do it, or you may not practice your skills often enough.
With training and practice, you can enhance your ability to probe the predictive level three factor in every candidate. You can also learn to use these skills in the everyday management of your team to gain a better understanding of your people. This probing skill is one of the greatest Leadership Skills due to its ability to help you do a better job.
So the first steps to establishing a Healthy Recruitment & Selection Process is to know what you are looking for in the first place. Shift your focus to the key success indicators and then lower your expectations on the trainable factors, because if you get the right person, it is easier to train them than to change them.
There is a bit more to that, but it isn’t hard to do.
The first stages of recruitment success.
So Stage 1 is to know what you are looking for so you can spot it when you see it.
Stage 2 is to learn to recognise a good candidate when you meet one. Here you can use the Behavioural Questioning Techniques alluded to above. Again it all sounds very hard and technical, but once you get the hang of it, it becomes second nature. You begin to find new areas in your work and life where you can also use these techniques.
If you don’t like the intrusive or psycho sounding “Behavioural Interviewing Techniques” you can use the gentler sounding “Competency Based Interviewing.” At the end of the day, they are essentially the same thing.
If you are comfortable with either technique, you can enhance your success rate further by adding a Personality Assessment to help you to focus on the core or critical behaviours. Some tools will even give you the interview questions to ask to verify the accuracy of the assessment and the hidden nature of the candidate.
Indeed, some psychometric tools will also give you a specialised Job Profiling Questionnaire to make the first stage of your recruitment even easier.
There are some excellent reasons why you should use an objective measure in your selection processes. The primary reason being that a good psychometric assessment can help you to question your own bias. At the same time, the tool will help you to probe the candidate more deeply.
In my next post, I will explore the pros and cons of psychometrics in recruitment. We will also explore some alternative techniques and technologies to improving hiring success rates. In the meantime, if you want to fast-track your recruitment and selection success rate give us a call.
I heard an expression once; I don’t know where and I don’t know when. But it always reminds me of why businesses fail. It stuck in my head because it makes so much sense. “There is nowt so quare as folk.” I’d imagine it comes from the North of England. Maybe I heard it in that TV series, “Last of the Summer Wine.”
People are strange, unpredictable and in a world of technology and machines, people can just be downright unreliable. But that is the beauty of the Human Being; we are magnificently diverse, irrational and almost unmanageable.
Of course, in the workplace, that can become just a bit scary for the managers. It is that very diversity of human nature that makes the recruitment and selection of new employees such a critical activity for any organisation.
The truth is that you can’t run an above average business with below average people. So if you want success, you try to hire the best. You aim high. When you don’t aim high; you are aiming for trouble. Here is what you get if your hiring practices are weak, and your employee turnover is poor.
This issue is a big one if you fail to tackle it. It can be difficult to quantify, but if you ask around you will find plenty of evidence to support our case. If, and this is a big if, a proper Induction Process is followed, your new hire should not fail. Your new hire should be almost ready to produce results for your business.
An unsuccessful new hire will continue to draw upon management and colleagues time as they struggle to come to terms with their new role. This constant distraction reduces their manager’s and workmate’s productive time.
Errors, omissions and poor standards of performance can have a significant impact on productivity. Reworking, replacing and otherwise making up for bad work is a complete waste of time. This is compounded when the new hire fails to learn from their mistakes.
Morale & Motivation
If you work alongside a poor performing colleague, you will naturally want to assist them in doing a good job. This desire to help is particularly common in the case of a new hire, or an existing employee going through a difficult patch or struggling with a new type of assignment. We all need the help of a supportive team from time to time. Nobody likes to see a colleague fail if they can help it.
However, when a new hire fails to get up to speed, despite your help. Or a colleague’s difficulties have become an ongoing issue. Your performing team members who are carrying the workload without additional reward, recognition or benefit, may stop trying. Worse still, if management does not take action, they may let their performance drop, either subconsciously or in planned protest.
Where an organisation has a consistently weak hiring record and a high level of staff turnover, poor performance can become the norm, costing a business dearly.
If a customer is repeatedly on the receiving end of poor service or product quality, they will complain. Complaints invariably end up on the shoulders of the under performing team. The team already know the cause. They may pick up the slack for a short time, but the problem will eventually resurface if management fails to tackle the underlying causes.
It is a well-established fact that bad news travels faster and further than good news. When your customer makes a complaint, consider yourself lucky. Usually, they will only complain about your business to their friends and your competition as they move their business.
In some business sectors, these complaints can travel far and wide and may stop higher calibre candidates from applying to work in your organisation, adding to your problems. Additionally, you may discover to your cost, that your better employees will readily move to a competitor with a stronger reputation.
If productivity, morale, motivation and reputation don’t particularly bother you, perhaps the financial implications might. We have yet to see a report or research from any reputable source that suggests that there is any positive correlation between employee churn and profitability.
On the other hand, there is overwhelming evidence that excellence in recruiting correlates strongly with all the indicators of a top organisation, from productivity through creativity and innovation to market leadership and profitability.
However, there is one exception to that rule. If you are in business selling generic low margin products to a consumer base who buy on price alone, then you can boost your margins with a high staff turnover rate. However, you still need to hire the right people in the first place.
We will explore two different overheads or costs that are present in every business but are rarely measured. As a result, your line managers never think about them. These are your direct “Recruitment & Selection Cost Calculator” per hire and the collective “Cost of Employee Turnover Calculator”. They are an excellent measure of organisational health.
Why consider these costs?
Firstly, the savings you make here will go directly to your profits. The problem with these costs is that they are hidden and fly under the radar of your accounts and budgeting; they are an unnecessary overhead. If they are not seen and known, they cannot be managed.
Another reason is that if you are honest in your analysis, the size of these costs will shock you. Most organisations that measure these overheads for the first time; act immediately and monitor the figures on an ongoing basis.
A small saving here or there can be made to cut Recruitment Costs, but the price doesn’t vary much if your hire is successful or unsuccessful. The real figure you want to see is your cost of turnover, because this is the cost of replacing people you have previously incurred the cost of hiring. Your Employee Turnover rate will often suggest that you are under-investing in your hiring activities or will highlight some underlying management concerns.
“When you’re in a start-up, the first ten people will determine whether the company succeeds or not. Each is 10 percent of the company. So why wouldn’t you take as much time as necessary to find all the A players? If three were not so great, why would you want a company where 30 percent of your people are not so great? A small company depends on great people much more than a big company does.”
Are your Turnover Costs Acceptable?
Are your turnover costs acceptable or are they a bit on the high side? Does this figure raise any questions? Are there dramatic differences between roles or between hiring managers or between different departments? These differences probably show some important issues about your business and its day-to-day management.
In general, a turnover rate of 10-15% is regarded as healthy. Below this your business may become stale and stagnant. People retire, move and change their career. These are usually outside of your direct control. However, sometimes people leave for other reasons and will push your rate over the 15% mark. If your rate is above 15%, you should investigate the causes.
Some business sectors have higher rates of turnover for very acceptable reasons; such as seasonal roles. Some sectors such as call centres as high as 120%, while some of their competitors are as low as 20%. Why do we see such differences?
Turnover costs and failure rates are related to standards of performance. You may have low turnover and low standards, therefore, resulting in low performance because the perceived hassle of dismissing and replacing underperformers is just too much bother and your line manager will put up with it. Your turnover cost is a key measure of the overall effectiveness of your managers.
Turnover is a Critical Issue.
In urban areas, the churn is higher; this is because the opportunity to change jobs is greater than in rural towns. The employee who struggles with their skills or who just doesn’t like the way you do business can only leave. Equally, employees with talent and potential will be the first to move because they are uncomfortable or unhappy in their current role.
In rural areas, the chance to move may not be there, so as a result, they will do the bare minimum to stay afloat and keep out of their manager’s line of fire. They retire on the job and become a serious drain on your business.
Several of our clients discovered upon investigation that they are actively looking for the wrong person for the role. One example is a Call Centre that hired for excellent communication skills; they picked the outgoing ones. Our investigation showed that their hiring mistakes were, in fact, their best employees; they should have looked for the best listeners. Good talkers rarely make good listeners and in this business, the employee needed to listen to the customer.
In the next post, we will look at the effect of weak recruitment on your business and how positive change can impact your business.
A reminder of the calculators you can download here:
If you would like an Excel version of the calculator, just email us at firstname.lastname@example.org and we’ll get one away to you, straight away.
I just love it when a plan comes together, as I’m sure you do too. But how often do your hiring plans fall into place? How often do you look at an employee and say to yourself, “That was a great recruitment and selection decision”?
The answer is probably “Not as often as I would like!” If you recognise this, read on. You are not alone, this may be a well-spent one to two minutes of your day.
There is an old saying, “fail to plan, plan to fail”. We see this very often in our work. But we also see many cases of organisations that use well sculpted and beautifully worded plans. These look great on paper, unfortunately, it’s the wrong plan.
It is one thing to fail to plan. But it hurts a lot more if you use the wrong plan. You will end up looking in the wrong place for the source of your people and performance problems.
Hiring Success – It all begins here.
Most hiring managers will, under pressure, admit to a hiring success rate of about 50%. In other words, a failure rate in much the same range. This 50% failure rate is having a huge negative impact on your business. Even a slight shift in your hiring success rate can have a major impact on your profitability.
The scary thing is that while most organisations experience this 50% figure, very few recognise it or are doing anything about it. Most organisations simply lower their expectations and standards so that the 50% failure looks more like 80 or 90% success. These organisations then struggle with their Performance Management Processes in an effort to make things better. A sows ear and silk purse sort of thing.
The really good thing about this 50% figure is that when you change it within your own organisation, it will give you a massive competitive edge in your market.
Hiring failures are a constant drain on resources.
Hiring failure is like a leaking ship. If you don’t keep bailing, you will sink. On the other hand, you could always try to repair the leak and save a lot of wasted effort, while your competitors keep bailing.
Why do businesses continue to ignore the leak? Largely it’s because people are used to the leak. They consider being ankle-deep, knee-deep or neck-deep in it as part of the job description. Sometimes managers don’t know that a leak exists. They just know that there is always a lot of unwanted water in the hold. They don’t know why the water is there and they don’t know how to get rid of it.
Over the coming weeks, we will tell you how to prove the true cost of your hiring mistakes. We’ll explore the most common recruitment errors. We’ll look at some of the nice things you can expect to see happening in your business when you begin to get things right more often than wrong.
Later we will look at how the successful businesses, both large and small are using new and not so new tools, technologies and techniques to significantly boost their hiring success rates. Finally, we’ll be giving you some pointers about how you can begin to fix that leak on your own.
If you recognise that 50% rate within your own business and would prefer to act sooner than later, give us a call. We have done nothing else but help companies to cut their staff turnover rates and boost performance through more effective hiring strategies for just about 30 years. It’s what we do.