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What to look for when you are hiring!

Published October 29, 2012


A recent three-year study conducted by research and management consulting firm, Leadership IQ, tracked 20,000 new hires and found that nearly half (46%) of new hires fail within their first 18 months. Further, the study found that of those who failed, a jaw-dropping 89% did so due to attitudinal reasons, not for lack of skills as one might assume.

And the costs of a bad hire can be extremely high. According to a 2010 CareerBuilder survey, 24% of hiring managers said one bad hire cost their business more than $50,000 in the last year.

According to a wide body of research,  here are some of the valuable traits to look for in potential candidates.

Problem Solving Ability

It is imperative that new hires can figure out things on their own. Stepping into a new job is confusing. It takes time to learn the ropes, and it costs money to have people do the training. When a new hire can figure out operations and tasks independently or with minimal guidance, the benefits are astounding. According to the Leadership IQ study, the number one reason why new hires failed was because of their inability to be coached.

Of course, a strong work ethic is important, but without problem solving ability and sound judgement, it is very easy for a workhorse to go 1000 miles in the wrong direction.

People with strong problem solving abilities make mistakes less often. This means they don’t have to double back and undo whatever damage their mistakes caused, and then finish the job right. It is as if they are three times more efficient.

Plus, fixing errors often requires the assistance of others in the company, further multiplying the negative effects of the mistakes.  What started as a ‘one-person’ assignment soon balloons into an “impromptu Damage Control Taskforce”. Of course, it is important to cut new hires some slack, and value the bonding experience of “solving problems as a team”.  However, management has the responsibility to consider: “If those mistakes didn’t happen, what would have everyone else been doing, and where would the company be?”

It is terribly easy to underestimate the damage that a new hire can cause. For example, one of our customers explained that one of his previous assistants nearly tanked his small business company after only three weeks of employment. She decided to reorganise the company email account and dumped all invoices, bills, and even payments and receipts into a single folder called financial. He said it took him about a week to figure out what happened, fired her, and then it took him another 3 months to get the company finances sorted out and back into check. The only thing that kept his business afloat was the sympathy and understanding of his suppliers and customers. Talk about a set back.

Of course, it is possible to micro-manage new hires and hand hold them through every detail of your operations. When you actually calculate the cost of the training you’re providing and your lost productivity, the numbers can easily exceed $10K a month or much more: plus the mistakes.

Sooner or later you’re going to have to leave them alone, and eventually they will come across a situation they weren’t trained for… and you’re back to the primary question “Can they figure it out on their own?”

Put bluntly, hire the smartest people you can find, because the mistakes and the training can be so darn expensive.

Motivation to Match the Mission

Intelligence is important, but it isn’t everything, drive, passion, and work ethic are just as important. For example, my brother in law is nothing short of a genius, but getting him to finish anything is like pulling teeth.

A recent Empower Me! Magazine article stated that drive is the one trait every employee you hire should have. The author of the article and CEO of filing services company MyCorporation, Deborah Sweeny, said, “People with drive seldom come with that singular trait alone backing them up, as I’ve discovered over the years and known just as much myself. At my core, I believe that one of the most important qualities in a person is a strong work ethic which rarely goes anywhere without drive by its side. Drive is what will get you where you need to get going to, and won’t allow you to give up along the way either. And while it’s extremely beneficial to have in a person, by hiring someone with drive your business will receive a plethora of additional strengths added to it.”

It’s critical to realize that people are motivated by different things, and some sources of motivation are substantially better in a given job and workplace. These motivations define how people find fulfillment in their lives, and don’t change very much after the age of 20. It is extremely difficult to change these motivations, as these are wrapped up in someones personality, values, and priorities. Like quitting smoking or losing weight, these motivations are habitual, and, like breaking bad habits, changing motivations is possible, but very very hard. The honest truth is that people generally don’t change their habits, of course that is why we call them habits. A hiring manager, has the responsibility to hire people for who they are.

Hire and place people that have the motivations that will drive them toward excellence in that position. Misunderstanding a person’s motivations and placing them in the wrong role or in the wrong team sets them up to fail, and will have dire consequences on the entire team.
For example, you can probably match some of your co-workers or staff to the below:

  • Get fulfillment by making other people happy; they truly care about the feelings of others.
  • Compulsively meet new and different people; enjoying the excitement, the interaction and the attention.
  • Addicted to completing to-do-list’s and will work until all hours to follow through on commitments; appreciating the sense of accomplishment, everything organized and in its right place.
  • Hunger for innovation; they love to be creative, original, and find new and different ideas, methods and tools.

An article published by executive search and consulting firm, Ropella, explains the importance of initiative, “Most top performing employees are ‘take charge’ kinds of people. They don’t wait to be told want to do; they look for problems and opportunities and assume responsibility for them. To determine if a candidate will show initiative in your firm, ask targeted questions that force the candidate to provide specific examples of where he or she demonstrated initiative in previous jobs. Listen for examples such as completing more work than what’s required or expected, taking risks that resulted in success, and making an effort toward continuous improvement.”

Emotional Stability

While the skills and certifications will, of course, depend on the role, potential candidates for any job should be capable of managing their emotions.

Revisiting the Leadership IQ study, two other factors that influenced whether or not people succeeded in a role were temperament (“Attitude and personality suited to the particular job and work environment”) and emotional intelligence (“The ability to understand and manage one’s own emotions, and accurately assess others’ emotions”).

People with low emotional stability are at greatly increased risk of absenteeism. They tend to be more easily distracted and derailed by changing and dynamic workplaces.

Yet, people with high rates of emotional stability, tend to live healthier, happier, and longer lives. They tend to exercise more, be more motivated by excitement and much less averse to risk. They are often strong contributors to office morale .

Needless to say, high emotional stability is an advantageous trait for most positions and companies.

Note: Culture can’t do everything

Many people believe that a strong company culture is the solution to most HR woes, but this is a misunderstanding of the purpose of company culture.

Since Ringlmann’s studies in 1927 on ‘social loafing’, their has been a constant string of studies demonstrating that adding a ‘free-rider’ on to a high performance team will have enormous negative affects on each member of the team, called the “sucker effect”. Basically, if free-riding appears acceptable at work, then high performers stop trying. Free-riders simply don’t magically become better by being on a high performance team, rather they bring everyone else down. The research showed that a strong company culture for excellence would help high performers resist the urge to stop trying, but only a bit. It merely bandaids the problem, over time and if more free riders are added on, the high performers will one by one eventually given or leave. While hugely important in keeping team output high, company culture isn’t a cure for the disease, it is merely a treatment for the symptom.The only real real solution is to prevent free-riders from ever getting on the team in the first place.

“A-players hire more A-players, but B-players hire C-players, and C-players hire D-Players. You can’t indulge B-players.”  -Steve Jobs

One of our customers first came to us with a problem. A year earlier, to scale the business and meet increased demand they had tripled their staff from 20 to 60, taken on the increase of those salaries and corresponding overhead, and by every important metric his company was doing less business and completing less projects then it had ever done before.

Simply put, throwing people at the problem actually made for a different, bigger problem: The people that were doing all the work before, stopped. The influx of free-riders made them ask “Why bother?”

Making the right choice

Bad hires can be a major expense, they can even kill a company. Potential costs may include replacement expenses (HR time, training and orientation costs, for example), severance pay, damaged customer relationships, lost sales, reduced productivity and legal costs.

Obviously, it pays to get it right the first time and a big part of doing that involves looking at the intangibles, the “soft skills”, as outlined above.

Which characteristics do you look for and consider to be the most important when recruiting? How do you avoid bad hires?

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