Last year, Harvard professor Todd Rose, author of the bestseller, The End of Average, asked me how I developed Performance-based Hiring. Todd was interested since much of what he discovered in his research identifying the drivers of human performance had been captured in Performance-based Hiring. I told Todd I conducted lots of trial and error experiments over a twenty year period. Many of the results of these experiments are described in thisPerformance-based Hiring Lynda.com course just published.
Here’s a quick summary of my experiments which parallel much of Rose's findings.
- You need a great job to hire a great person. A great job is not a laundry list of skills, experiences and “must-have” personality traits. A great job is a series of tasks and challenges the person being offered the job finds more satisfying than the compensation being earned.
- The best people network to get their jobs; they don’t push the apply button. Since 85% of the total talent market – including 50% of active candidates – found their last job via a referral, you need to spend 85% of your time finding these people.
- You need to conduct an in-depth, respectful interview. The best people consider the quality of the interview as representative of the quality of the company, job and hiring manager. The Performance-based Interviewdescribed in the video achieves all of this including an extremely accurate assessment of competency, fit and motivation to do the work described in the performance-based job description.
- You need to provide the person a 30% increase to maximize performance and satisfaction. A career move consists of a bigger job with more impact, a job that offers the opportunity to grow faster and a richer mix of more satisfying work. When these non-monetary factors exceed 30% you can be sure you’re hiring a highly motivated top performer.
- You can’t negotiate the terms of an offer before the person knows about the job. When a job represents a true career move, the typical company name, job title, location and compensation factors don’t matter as much. That’s why you need to begin each contact with an exploratory warm-up. Filtering on skills, compensation, title and location prevents this type of conversation to even take place.
- The best people have different skills and experiences. That’s what makes them the best people. Since we promote people we know based on their past performance, we should hire people from the outside the same way. It shouldn’t come as a surprise that if the person can do the work and sees the work as a career move, the person will have all of the skills, experiences and motivation necessary to succeed. This is not only how you hire top performers, it’s also how you hire for diversity.
- You need a great recruiter to make the career case. Hiring the strongest talent is not a transaction, especially when it comes to passive candidates. It takes hours spread over weeks for a person to fully understand all of the factors involved in a career move. Recruiters need to persist and not let a person say “no” until the information is fully understood.
- You need a fully engaged hiring manager. Not only do hiring managers hire in their own image, the best candidates accept jobs from managers in their own image. They want to work for leaders, mentors and people who understand how to manage and develop others. Knowing the job, conducting an in-depth Performance-based Interview, active listening and full engagement in the process are the prerequisites for hiring managers who want to hire stronger talent.
- Pre-screening assessments, traditional skills-laden job descriptions and personal biases represent the primary causes of all hiring mistakes. If the best people won’t take the test, a company won’t be seeing the best people. If the best people, including diverse candidates, have a different mix of skills and experiences and are looking for a career move, not a lateral transfer, a company won’t be seeing the best people. If the assessment is made on biases, first impressions and presentation skills a company won’t be hiring the best people; they’ll be hiring the best talkers, the most affable and the most attractive.
- You need a strategy designed to maximize quality of hire, not one focused on minimizing cost and increasing efficiency. Strategy drives tactics but in the world of talent and HR this fundamental law of the business universe is broken every day. When maximizing quality of hire is the strategy, all of the issues noted above become part of the fabric of every single hiring decision.
Many of these ideas are addressed in the new Performance-based Hiring coursejust launched on Lynda.com. The rest you’ll discover by reading The End of Average and by trial and error.
Well Professor Todd Rose, the author of The End of Average, doesn’t actually blast behavioral interviewing, the use of statistics, assessment tests and job descriptions – he just diplomatically suggests they’re misguided, ineffective and counterproductive.
But as someone (me) who thinks behavioral interviewing is anti-behavior, assessment tests exclude the best people, statistics can’t be used to design six sigma business processes and that job descriptions should be illegal, I think blast is far too timid a word. Exterminate would be better. The more important point, though, is that Prof. Rose proved that current hiring practices should be exterminated for all of the reasons cited.
Now to set the record straight, Prof. Rose did talk to me last year to get my opinion about all of these issues and actually included a nice reference toPerformance-based Hiring in his book. He even went so far as to suggest that Performance-based Hiring eliminates most of the flaws described above. In our conversations he wondered how I came to some of the same conclusions he did which are based on real science. I told him I used fake science. This consisted of a small sample of repeatable experiments in the 1980s that demonstrated the following:
- The best people aren’t willing to take lateral transfers. They want jobs that stretch them in the short term and offer significant upside potential in the long term. More important, if this condition exists, compensation is less important. This was true in the mid-70s when I started hiring top people and it’s still true today. That’s why this concept must be the cardinal rule underlying all hiring strategies and one that’s broken every day at most companies.
- Skills and experience-based job descriptions are terrible for screening purposes and worse for attracting top performers. As a result I asked hiring managers to define jobs as a series of performance objectives. I then asked them if they’d see people who could do this work if they had a different mix of skills and experiences. All of the best managers agreed. The average managers didn’t. When the best managers compared the candidates who could do the work to those who had the skills it was clear the best people had something different to offer: more ability, more insight, more confidence and more potential.
- Performance of even the best people is very situational. Over the years as I tracked these people it was clear that those who were hired based on their performance and potential were promoted more frequently and stayed longer than those who were hired based on their skills and experiences. However, the circumstances of the job represented the tipping point between great success and underperformance Most important was how the hiring manager and new hire worked together. Second were the team issues and third had to do with cultural fit. A mismatch on any of these, regardless of how competent the person was, adversely impacted performance.
- Psychometric assessment tests don’t predict ability or fit. I’ve been tracking people for 30 years and the conclusion I developed in the first five years was that, at best, assessment tests confirm ability but don’t predict it. Worse, there were so many false negatives (good people being excluded) and false positives (weak people being considered) that the tests were so flawed they should never be used for screening. Of course, Time magazine had a recent cover story advocating their use which suggests their value is way overhyped.
- Behavioral interviewing and competency models do not improve quality of hire. In fact Schmidt and Hunter’s academic research over the past 30 years clearly demonstrates that behavioral interviewing, which is based on assessing competencies, is only 12% superior to flipping a coin. That’s why I concluded early on that you can’t build a scalable and repeatable business process based on statistics unless there are very strong correlations between the factors being assessed and on-the-job performance.
In The End of Average, Prof. Rose uses examples based on real science to validate each of these points. Regardless, the bigger point Rose makes is that no one is average and in order to maximize the potential of the individual, context matters. The situation matters. The resources matter. The culture matters. The manager matters. The team matters. And the focus of the job matters. That’s why you need to define all of these things ahead of time and find people who can excel at most of them. Most important, stop screening people on things that don’t matter – their level of skills, their years of experience, their GPA, their behaviors and their competencies. In my mind, for those companies that embrace The End of Average it will be The Beginning of Hiring Great Talent.
I’m still amazed that many companies are still in the dark ages when it comes to hiring. Your company qualifies for this categorization if you still post skills-laden job descriptions and use generic boilerplate for employer branding. Since these only appeal to those who are actively seeking employment, you’ll turnoff anyone who might be open to a career change. But things could be worse. To determine if your company is historic or futuristic on the hiring front give yourself a yes-no-sometimes ranking on the following 10 factors.
These are the common hiring roadblocks some HR leaders still insist on using. If you get mostly yeses you’re stuck in the 70s and 80s regarding best practices. If you get mostly no’s you deserve to be presenting your state-of-the-art hiring process at LinkedIn’s Talent Connect 2015.
- You still post job descriptions emphasizing skills, experience, educational requirements and generic competencies. In the 70s and 80s job postings were used to weed out the weak. In the talent scarcity world of 2015 and beyond, job postings and emails need to be used to attract the best. Here’s a wacky one that not only demonstrates the point, but also worked.
- You still use behavioral interviewing to assess top talent. Behavioral interviewing was designed to add structure to an interview and minimize mistakes. Statistically, this is the only benefit. It is counter-productive for raising the talent bar, recruiting and assessing top passive candidates and for executive-level hiring. In these cases Performance-based Interviewing is preferred since it’s based on a two-way professional business discussion about real job needs.
- You believe employer branding is important for attracting the best experienced professional passive candidates. Employer branding is fine for high volume hiring but not appropriate for filling critical positions. In these cases, your recruitment messages need to be customized to appeal to people who will raise the talent bar, not those who aspire to be part of a big machine. Job branding allows you to tie the job to an important company initiative.
- Neither your recruiters nor your hiring managers understand real job needs. Clarifying expectations up front has been shown to be the key to attracting and managing top performers. If your recruiters don’t understand real job needs, they won’t be able to engage or attract a single top active or passive candidate. If hiring managers don’t know them, they won’t be able to assess or hire the few that do show up.
- Neither your recruiters nor hiring managers know how to recruit top active and passive candidates. Recruiting, assessing and hiring someone who’s not looking for a job is a high-touch advanced selling skill that few recruiters or hiring managers have mastered. If true at your company, consider how many great people you haven't even had a chance to meet or hire.
- Your recruiting department spends too much time posting boring jobs and screening resumes. By any measure, somewhere between 80-90% of all candidates for critical, high demand positions are passive candidates. If your recruiting department is spending more than 20% of its time posting jobs to fill these positions, it’s the reason you’re not seeing more top performers.
- Your employee referral program is based on finding active candidates for open jobs. LinkedIn allows corporate recruiters to search on their first degree connections’ connections. This capability is lost if your company’s employees are not proactively networking and linking with their best previous co-workers. In this case, your recruiters are only getting referrals for those who are actively looking.
- Your workforce plan is basic, reactive or non-existent. If you’re not forecasting your hiring needs on a rolling basis at least 3-6 months out, you’re going to have to settle on hiring the best person who applies, not the best person available. Reacting to changing hiring needs doesn’t work when it comes to hiring people who need more time to be found, nurtured and convinced your job is a career opportunity.
- Your idea of metrics and feedback process control ignores quality of hire and daily recruiter performance tracking. Converting scarce talent into great hires requires real-time metrics focused on yield management, productivity and quality of candidate by source. Improving a hiring process starts by knowing what works best, what doesn’t and what isn’t.
- Your recruiting process is transactional, not transformational. Every business leader wants to raise the talent bar, but they succumb to too many ill-founded excuses that prevent needed change. This is called the Hiring Catch-22. It’s attributed to assuming there’s a surplus of talent when there isn’t.
Hiring top people in a talent scarcity world requires recruiters who can recruit, hiring managers who can attract and hire these top people, and jobs that offer career moves, not lateral transfers. Without these three lynchpins, companies are left with a 70s style hiring program. Moving into the recent past or the soon-to-be future requires nothing more than getting more no’s than yes’s on these ten factors.
Lou Adler (@LouA) is the CEO of The Adler Group, a consulting and training firm helping companies implement Performance-based Hiring. He's also a regular columnist for Inc. Magazine and BusinessInsider. His latest book, The Essential Guide for Hiring & Getting Hired (Workbench, 2013), provides hands-on advice for job-seekers, hiring managers and recruiters on how to find the best job and hire the best people. You can continue the conversation on LinkedIn's Essential Guide for Hiring Discussion Group.