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Reduce the cost & grief of bad hires

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in Hiring,Human Resources

New survey data from NFI Research indicate that most senior executives and managers rely on likability — that “good ol’ gut feeling” — when hiring and promoting people.

Bad move. Very bad move.

You may understand your business, but when it comes to hiring, you’re probably just guessing. In point of fact, regular job interviews scarcely assess competence. They’re poor predictors of accomplishment, posting a 0.2 correlation with actual job success.

Hiring is high-stakes stuff. The cost of hiring one bad salesperson can run into the millions, factoring in not only salary and rehiring but also missed sales and lost clients.

The cure for bad hires is a scientific, three-part approach that makes hiring as standardized and objective as possible.

Here are the components:
  1. Behavioral interviewing, during which candidates field tough questions about how they’ve handled specific assignments and problems. Bluffing is difficult.

    Example: “What were the sales margins, accounts payable, and inventory like at your previous job?”

    All questions should be job-related, and every candidate should field the same questions. Interviewers need to take notes.

  2. Cognitive and personality tests. The first measures intellectual capacity. The second can measure candidates against your top performers. In effect, you can begin to approximate “cloning” your stars. Use both kinds of tests or a single test that combines the two.

    Assessment results can be fascinating. Example: A trucking company was baffled about why some drivers who’d seemed perfectly qualified were turning up as rude, complaining, late or otherwise unproductive.

    The company hired a research team that found two truck-driver profiles: Top performers on city routes were social and talkative with customers while picking up and delivering many times a day. The best long-haul truckers were quiet and introspective.

    Facts in hand, the trucking company reduced its turnover to 22 percent, far below the 116 percent industry average.

  3. Real tasks approximating what they’d do on the job. In a two-hour test, a PR firm in Los Angeles asks would-be account reps to study a client and write a pitch. For executive candidates at Motorola, Aon Consulting designed a four-hour online exercise.
Bottom line: Hiring is probably the most important process in business but the least disciplined. While testing job candidates remains imperfect, it’s still better than the alternative.

—Adapted from “The New Science of Hiring,” Stephanie Clifford, Inc.

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