With microscopic companies killing big ones or getting acquired, hiring high-quality employees has become more important than ever, but they’re harder to find amongst the sea of resumes. Yet the resume, which was adopted around the same time that televisions became popular, has failed to evolve with the digital-hiring process.
Televisions have advanced significantly, but resumes have basically stayed the same. This has left companies with very few tools to sort through hundreds upon hundreds of resumes and to make better hiring decisions. Bad hires are prevalent, costly, and practically inevitable with such a defunct hiring process.
To make matters worse, A+ employees have more options than ever before and retaining them has become even more difficult. The challenge is no longer filling positions—it’s fighting the war for talent and reinventing the recruiting process for a modern labor market, the talent market. It’s about hiring the best people before someone else does.
This leads to three major problems related to using outdated strategies in a 3.0 world:
Problem #1: Employers Are Taking Multimillion-Dollar Gambles
Roughly $840,000 is the anticipated bottom-line cost of a bad hire for a 2nd level manager position (paying a salary of $62,000 per year) after 2.5 years.
The mistakes, failures, and missed business opportunities resulting from a bad hire compound like high interest on an enormous debt. Bad hires become exponentially more expensive when they linger for years, especially if they oversee important teams and major projects.
Employees are the greatest investment, expense, asset, and liability for most companies, yet employers have been forced to make hiring decisions based on exaggerated resumes and superficial interviews.
Problem #2: Employees Are Set Up to Fail
Approximately 34% of applicants lie about their previous work experience on their resumes, and they’re given jobs they’re not qualified for and receive very little training. A degree in business doesn’t qualify or prepare someone to perform all business-related tasks. This leads to stress and frustration, and leaves A+ employees feeling under-appreciated.
And then there’s The Peter Principle. Highly successful people are often rewarded with promotions into roles they don’t have the abilities for. The company is ultimately run by employees who end up rising to their level of incompetence. Someone that excels in a sales position may not excel as a sales manager because even related positions require different abilities.
Success is rarely transferable. After studying more than a thousand top Wall Street analysts, Boris Groysberg writes in Chasing Stars that though a person may excel in his position at one company, similar success at another company is not at all guaranteed. Just because an employee does well in one position at a certain company doesn’t mean that success will be duplicated in a similar role at another company.
Problem #3: Managers Are Hiring Themselves
According to a study at the Northwestern University Kellogg School of Management, managers tend to hire people who emulate their best qualities. It can seem like common sense: if the manager was successful in their department, then new hires should be like them. Unfortunately, this is a very dangerous misconception.
Firstly, most managers don’t have a complete understanding of what makes them successful. Furthermore, studies have found that we overestimate our best qualities, such as intelligence (this is true for both men and women). More importantly, most managers need to be looking to hire people who balance their weaknesses, not who replicate their strengths.
Ultimately, hiring 3.0 means declaring war on resumes. The faith we place in resumes is failing everyone. The reality is that they simply don’t work and everyone knows it. Employers like you expect that you’re being manipulated whenever you pick up a resume, and if you don’t, it’s time for a wake-up call.
What are you some of the issues you have seen in your hiring process?
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