I make the contention that if you can’t measure quality of hire, you can’t improve it. As far as I’m concerned that’s the reason quality of hire hasn’t improved in the past 100 years. In fact, I contend that hiring processes at most companies are based on pre-industrial revolution processes. That’s about 175 years ago. If some of you can't remember that far back it was a craftsman environment, everybody built things using their own tools and techniques, teaching was via apprenticeship and every product made was quite a bit different than the preceding one.
So if you have hiring managers who still ask their own pet questions; don’t provide real job specs but contend they’ll know the person when they see him/her; and/or eliminate good people for dumb reasons; and you have interviewers who use thumbs rather than evidence to evaluate people based on biases, needs and emotions; you can assume you’re using pre-industrial revolution concepts to find and hire people in the modern era. This is worsened if you don’t have enough strong recruiters and sourcers who can find and attract the best people to join your firm.
Now you might want to wrap this in AI, a brand new ATS with CRM capability, a nice candidate experience, and a sexy employer brand, but this only masks what’s happening below the hood.
As far as I’m concerned, until you have a complete end-to-end process (comparable to a sophisticated sales process) that actually attracts great people and gets them hired within budget on a consistent and predictable basis, you will stay stuck in the real olden days.
The solution requires measuring quality of hiring at every step in the funnel for feedback control purposes and then comparing how the predicted quality of hire maps to actual quality of hire.
In a process like this tracking the right metrics in real time is how you ensure the person hired is the best person, not just the one who made it through the gauntlet. This type of feedback loop will tell you when your process is out of kilter and allow for immediate corrective action. It’s this type of thinking and process control that has enabled every other non-HR business process move towards six sigma-like improvements in quality, efficiency and reliability in the past 40 years. Sadly HR has not even moved the needle. Collectively that’s why quality of hire hasn’t improved, job satisfaction is at a dismal 30% for the past 20 years and turnover is increasing.
When it comes to hiring, the tipping point in all of this is the need to measure and track quality of hire pre-hire. Without this benchmark, you’ll spend too much time on being more efficient rather than getting better. With this idea in mind, here’s how I’ve been measuring quality of hire on my last 1,000 search projects. (This video explains how to implement the process using the graphic shown.) It starts by asking the hiring manager if he/she would hire someone who met the following criteria:
- The person has a track record of accomplishments comparable in scope, scale and size to what’s required to be successful in the new role.
- There is clear evidence the person’s performance has consistently been in the top half of his/her peer group throughout the bulk of the person’s career.
- The person has been assigned to participate and lead important teams similar in scope and makeup to the actual job requirements.
- The person has the capacity and track record for solving comparable job-related problems and making complex business decisions likely to be faced on the job.
Just about 100% of hiring managers agree they’d not only meet a person who met this criteria but would also want to hire the person. With this agreement I then make the point that if a person is evaluated based on past performance doing comparable workand he/she has been successful based on the above criteria, the person obviously has the right mix of skills and experiences required. And in most cases this mix will be different than what’s written on the original job description. In fact, the best people will have less, and diverse candidates by definition will have a much different mix of skills and experiences. Getting agreement on this is a critical step in the process since it proves that traditional job descriptions are the cause of the problem, not the solution.
Competency is Not Enough. Job Fit is the Key to Better Hiring Decisions.
But measuring competency to do the actual work required is not enough to predict on-the-job performance. In addition, the person needs to find this work intrinsically motivating, the person’s style needs to mesh with the hiring manager’s and the person needs to fit with the company culture and environment. I call these the Fit Factors, and without a good fit on all of these measures the person will underperform.
With this foundation, all you need to do to measure and predict Quality of Hire pre-hire is to rank candidates on the 1-5 ranking scale shown. Then once the person is on board rank the person again on the same factors at 60-day intervals. Since each factor is in comparison to real job needs and the fit factors, any variances will be easy to spot and correct. This is the basis of a feedback process control system and as you’ll discover, is the critical first step in building a modern era business process for hiring top talent.
In a recent post, I provided an overview of the How Hiring Process Impacts Performance matrix shown below. It demonstrates the concept that the quality of the process a company uses to hire people is a great predictor of the quality of the people actually hired.
Given this, all a company needs to do to improve its hiring results is to benchmark how the best people were hired and then scale these “best practices” throughout the company. This is a basic UX design concept but too many hiring managers believe the “U” in UX is them. It isn’t.
So once you convince the hiring manager the “U” represents all of the great people he/she wants to hire, you need to figure out how these people are actually hired. This is explained below.
Defining great and not-so-great hires
Tier 1: Great hires. These are people who are both fully motivated and fully competent.
Tier 2: Mid-tier hires. These are people who have the skills and experience to do the work but aren’t highly motivated to do it. They’re typically hired to fill jobs which weren’t fully clarified before they were hired.
Tier 3: Bottom-tier hires. These are people who are competent to do some of the work but not motivated to do all of the work. These problems are typically due to a transactional process, lack of clarity around real job needs and an incomplete or biased assessment.
Tier 4: Bad hires. These are people who are marginally competent but have an issue that surfaces after the person was hired that causes problems, including demotivating others.
Anyone who has been in the workforce for a year or two has experienced or met people who fall within each of the tiers. It’s fairly obvious that each situation is predictable based on the underlying recruiting and interviewing process used to hire these people.
Minimizing Tiers 3 and 4 hiring problems needs to be the first step in any hiring process redesign effort. Slowing down and conducting an in-depth behavioral interview will quickly solve most of these types of problems. But shifting your emphasis to hiring more Tier 1 candidates and fewer Tier 2 requires some significant reengineering efforts.
How to make the big shift to Tier 1 hiring
The funnel in the graphic below explains it all. Recruiting Tier 1 prospects requires a process comparable to discovery selling. Moving someone from an interested prospect to a final candidate is far different than selecting someone who has already expressed a desire to work at your company.
One of the big steps is recognizing that a process weeding out unqualified candidates is fundamentally different than one designed to attract top people who aren’t looking. This requires a combination of permission marketing, nurturing-based CRM systems, a great deal of networking and a lot of handholding on the part of the hiring manager and recruiting. The key strategic point to recognize is that you can’t have a surplus of talent process (driving people to the apply button) when a surplus of talent doesn’t exist. In this case you need to drive people to a “let’s have a discussion button” using a compelling reason to talk.
One of the most compelling reasons to talk is to offer the opportunity to put the person on a different career trajectory. However, to hire the person within a reasonable compensation requires proof that the opportunity is superior to whatever else the person is considering, including their current situation.
One way to open up the conversation and make the case is to use the idea that any career move needs to offer a non-monetary increase of at least 30%. This “30% Solution” is the sum of a bigger job, a job with more impact, a job that offers a more satisfying mix of work and one that offers faster learning and growth. Obviously, proving this requires extra time and more due diligence on the part of the company and the candidate. However, by spending more time with fewer people the time-to-fill and cost per hire metrics are the same, but the win is a significant increase in quality of hire.
The big stumbling block in all of this is the continued use of job descriptions that are over-laden with too many requirements. These need to be put in the HR parking lot. Their replacement needs to be a performance-based job description that defines the job as a series of challenges wrapped inside a compelling and customized employee value proposition. That’s how you attract the person’s attention, assess their ability and motivation to do the work and prove that your opening offers a 30% non-monetary increase. If it does, compensation will become a more reasonable negotiating item.
Shifting to a Tier 1 hiring process starts with the recognition you need to do it. But even when it’s made, too many companies forget who the “U” in the UX is. In this case, they go down a path of process improvement rather than process redesign and never realize they’re on the wrong path.
The first requirement for an exemplary user experience (UX) is to meet the exact needs of the customer, without fuss or bother.
This seems like a pretty good definition of UX to me. And while many companies embrace this concept, they think the "U" in UX are the candidates they're not going to hire. I suggest the "U" should be those whom they are going to hire. In this case I'd define these people as those who are competent and motivated to do the work you want done. Everyone else is either not competent or not motivated. This simple concept is represented in the graphic, “How Hiring Process Impacts Performance.”
To determine if you have the right UX driving your hiring process, take a small sample of the people you’ve recently hired and assign them into one of the four groups in the table. If you don’t have enough in the Tier 1 group you'll need to rethink your entire hire process to figure out why. The following ideas will help get you started. (Note: Every month we host a monthly public webcast to discuss this UX-inspired hiring process design.)
Tier 1: How did you hire the good people you’ve already hired?
While all Tier 1 people are both very competent and highly motivated to do the work you want done, there are ranges of performance within the tier. Some of them are solid people who love what they do and take great pride in doing it well, others are newbies who want to learn all they can and some are high achievers who want to progress rapidly. Regardless of their level within Tier 1, they’re all considered outstanding people because they produce high quality work on a consistent basis.
When it comes to a UX focus, it’s important to understand that people like this are typically hired when the job represents a true career move coupled with a fair compensation package. In this case a career move needs to offer a minimum 30% non-monetary increase. This 30% is the collective sum of a bigger job combined with more satisfying work, more impactful work and faster growth. While it takes extra time to prove this, few recruiters and fewer hiring managers are willing to make the investment in time necessary despite the obvious advantages. This results in hiring many top people who quickly become Tier 2 hires when the career move was not fully validated.
Tier 2: Could have been a great hire, if only.
While these people are fully competent they’re not consistently motivated to do the required work for one reason or another. As a result their work quality suffers or they need extra pushing to meet minimum requirements.
Hiring good people who underperform is a very common problem. Not only is it totally predictable; it’s also totally avoidable. Two problems are the typical cause. One is an emphasis on short-term non-job related criteria (like discussing the compensation before the person knows about the job) or the process was rushed. The other is a lack of fit in some way with either the job, the manager or the culture.
On the “bad fit” side it could be that the person is not motivated to do the work since it wasn’t fully clarified upfront or the person was misled. Regardless of the cause, lack of fit is usually the problem when otherwise talented people fall short of expectations.
The solution starts by clarifying job expectations upfront, fully understanding what motivates these people to perform at peak levels and making sure the fit factors are considered before an offer is considered.
Tier 3: Why did we hire this person?
There is no question that people who are neither competent nor motivated are bad hires. The cause is obvious: Usually the process was rushed and the assessment was based on a very narrow set of skill-based criteria. In many cases the people hired under these hectic conditions are those who make the best presentations, not the people who are the best performers. The problem is worsened since the candidate accepted the offer for short-term reasons based on compensation or which company could move the fastest.
Tier 4: The big mistakes.
Whenever a superficial assessment process is mixed with a need to hire quickly, big mistakes can be made. The biggest one is hiring people who just don’t fit on multiple dimensions. Worse, they’re often so assertive they make the problem worse and demotivate everyone else around them. This is far worse if they're managers.
Any structured interview process including reference checking and testing will help minimize Tier 3 and Tier 4 hiring errors, but as far as I’m concerned all this does is move the people who are hired into the Tier 2 group. The strategic win is moving everyone into the Tier 1 category. This requires a major shift in your company’s talent strategy and embracing the UX design concept.
But the most important part of all of the UX redesign effort is first figuring out who’s the “U.”
HAVE – GET – DO – BECOME.
When these words are viewed as a process from left to right, they put a limit on your company’s quality of hire. This is not good.
When viewed as a process from right to left they represent a process designed to attract and hire people based on their past performance and upside potential. This is how you increase the diversity of your entire workforce AND raise quality of hire.
When candidates accept jobs largely for what they GET on the day they start the job, the probability of success is low and the probability of their dissatisfaction is high. But, when candidates accept jobs for what they can DO and BECOME because they see the job as a true career move, compensation is far less important.
Rookie recruiters and HR leaders make this classic hiring mistake: filtering candidates too soon on what they GET on the day they start a job rather than on their interest and ability to DO the work and what they could BECOME if successful.
These four simple words have profound implications on how and who you hire.
This is what companies list on their job descriptions as fundamental requirements a person needs to have in order to even be considered for an open job. These skills, experiences, competencies and academic requirements are then matched to what candidates include on their resumes.
As a result of this, high potential candidates and those who have a different mix of skills and experience who can DO the work are inadvertently excluded from consideration. As bad, similar high potential and diverse candidates won’t even be interested in considering the job because it appears to be a lateral transfer.
This is what companies offer to candidates on the start day – a company name, a job title, a compensation package and a specific location. Too many candidates want to know this first when a company expresses an interest in them, typically before they’ll even engage in conversation.
The problem with this is that all of these factors are negotiable if the job represents a true career move. Unfortunately, this conversation is often short-circuited for the sake of efficiency. The bigger loss is the opportunity to have a career and networking discussion.
This is the actual work the person needs to accomplish. For example, it’s better to say, “Build a prototype of the optical design systems used for deep space exploration,” rather than, “HAVE 10+ years of experience and a MS in Optical Engineering.”
One benefit of defining the DOING is that if the person can DO the work he/she has all of the experience and skills required. The bigger benefit is that if the person is motivated by this type of work he/she will be more satisfied and productive if a job offer is accepted.
Every job can be defined by 5-6 performance objectives defining the task, the action required and some measureable results. Collectively, these are called performance-based job descriptions.
This represents the future. It’s what the person in the role can become if successful in the role. Typically, this is a bigger job, more impactful and satisfying work, and/or a promotion. If the future is far better than other opportunities the candidate is considering, the chance of hiring the person on fair compensation terms is higher.
From a negotiating standpoint it’s important to urge candidates to emphasize what they can DO and BECOME rather than what they GET on the start date. This negotiating tactic needs to start when the first contact is made with the person. This same point needs to be made when first opening the requisition with the hiring manager. Start with this question: “What does the person need to do to be successful in this role and why would a top person want this role?”
You can’t use a surplus of talent strategy and process when a surplus of talent doesn’t exist. This is the core problem with the left to right HAVE-GET-DO-BECOME process built into the fabric of most companies’ hiring practices. In a scarcity of talent situation, a process that starts by describing what a person can DO and BECOME will enable the company to attract stronger and more diverse candidates.
These are four simple words: BECOME-DO-HAVE-GET. When looked at from a different strategic, tactical and process perspective they will forever change who and how you’ll hire in the future.
Over the years, I’ve suggested that most hiring processes used by most companies were designed to hire the wrong people for the wrong jobs.
Harvard Professor Todd Rose, author of the new book, The End of Average, agrees. He came to the these conclusions using science. I came to them out of frustration.
Regardless of how we got there, here are my top contenders for terrible hiring practices, which are also outlined in Prof. Rose’s book:
1. Assessment tests are not predictive.
At best, they’re confirming indicators of performance. At worst, they screen out the best candidates. What should be measured is how people modify their personality and style to meet the needs of the situation. This is what the best people do and this flexibility is not measured by any pre-screening assessment test.
2. Behavioral interviewing is misguided.
Aside from the fact the answers can be faked, relating behaviors to actual job needs is problematic since the job is rarely defined properly. Furthermore, there is no documented proof that behavioral interviewing has improved quality of hire.
There is some proof, however, that it has reduced hiring mistakes. But this is due to the fact that it’s used as part of a structured interview and any pre-designed questions would have the same effect on minimizing emotional errors.
3. Skills and experience-based job descriptions are anti-performance, anti-diversity, anti-talent and irresponsible.
The best people get more accomplished with less skills and experience, so why would anyone want to exclude these people? For proof, consider that we promote people we know using a different criteria than hiring people whom we don’t know. And the people we promote, by definition, have less skills and experience and the prediction of their on-the-job is more accurate.
4. Any hiring practice based on statistics is illogical.
When combined with a comprehensive job analysis, a behavioral interview is only 12% more accurate than flipping a coin. Here’s the research that proves this. The report shows that only one third of the candidate’s performance is attributed to his or her past behavior. It’s far less if the job analysis hasn’t been done. That’s why justifying any hiring or interview process that has less than 70-80% correlation is logically flawed since so many other and more important factors have been left out.
5. Competency models are corporate speak for laziness and/or narrow-mindedness.
What the heck does boundary-less thinking, results-driven mentality, quest for excellence and a customer-first mentality actually mean? When I ask hiring managers to define their generic competencies, few ever agree. However, when I ask how the competency is actually used on the job, it’s (relatively) easy to get agreement.
This is how boundary-less thinking becomes “understand the consequences on manufacturing costs for any proposed design change.” If you don’t relate these competencies to actually job needs, they are dangerous to use, since they’re either ignored or used as excuses not to hire someone.
Of course, most HR leaders found my anti-establishment positions offensive, but as Prof. Rose proved in his book, they’re all valid. I actually did talk with the good professor before his book was published and he asked how I came to the same conclusions. Here’s what I told him.
How I came to realize these hiring pitfalls
My first experience with assessment tests was in the mid-70s, including DiSC, PI, MBTI and some others with fancier names. All suggested I was overtly extroverted and a real people person. However, this was only true after 6pm when I went home, drank beer, played volleyball at the beach and went to parties.
During the day, I preferred to work alone on the integration of complex accounting, engineering and manufacturing processes to maximize corporate profitability and performance. If you’ve taken these tests you know they only measure preferences, not competencies. More important these preferences changed depending on the circumstances. That’s why I developed the BEST personality test of all time to demonstrate how inappropriate these tests are for screening purposes.
My industry background gave me a chance to work with world-class people in all functions and in companies of all sizes. Those who got promoted the fastest never had enough experience. Instead, they had the ability to learn quickly, the confidence to take on projects they hadn't encountered before and the leadership skills to inspire the people they worked with.
So when I became a recruiter, the idea of using job descriptions that included a laundry list of the wrong things made no sense. So on my first search assignment, and every one since, I asked my hiring manager clients what the person needed to do to be successful, what resources were available and what the culture was like. I then found people who had excelled doing comparable work in comparable circumstances.
I could tell Todd smiled in agreement. He asked me if he could summarize these conversations in his new book. Of course, I agreed. You’ll find them there. While we reached the same conclusions we started in far different places. More important, we now both recognize that achieving “The End of Average” is the more important goal. Based on what I’ve seen, it will be an uphill battle but one worth fighting.