I recently posted a rather contentious article on the idea that inadequate hiring processes lead to an assortment of preventable hiring mistakes. Unfortunately, these mistakes have profound repercussions including underperformance, dissatisfaction and turnover. I classified these hiring mistakes into four levels of performance - from Type 1 hires at the lowest level to Type 4 at the highest. Many readers misunderstood the type classification as being a categorization of the person. It's not. It's a categorization based on the result of a flawed hiring process. For example, putting a great person in the wrong job would be considered a Type 1 or Type 2 hiring decision.
As part of the post, I alluded to the idea that the root cause of most of these problems is not the fault of the hiring manager but the company’s underlying talent acquisition strategy. The best explanation of this was found in a link to the video below aptly titled The Staffing Spiral of Doom – Catch 22.
For those not into videos – despite their entertainment and/or informative value – here’s the quick summary.
There are two primary staffing strategies. One is based on the assumption of a surplus of talent and the other on a scarcity of talent.
A surplus strategy assumes there are plenty of good people available. As a result, hiring processes are designed to weed out the weaker and less qualified candidates. While demeaning, it will work if there are plenty of top candidates available who are willing to take lateral transfers, accept average compensation and are driven by an economic need to apply. This approach will not work if the surplus assumption is wrong. In this case you’ll hire more Type 1s and 2s, a few Type 3s, and no Type 4s, since the best people for the position won't apply.
A scarcity of talent strategy assumes there are not enough strong people available to meet a company’s hiring needs. In this model, it’s necessary to attract the best people via proactive and outbound recruiting approaches. Much of this involves networking, building pipelines of prospects and targeted email campaigns. In the earlier Four Types of People post I suggested that in order to attract the attention of the best of these people, messages had to be compelling and career-focused. On top of this the interviewing and screening process needs to be longer and involve a number of additional exploratory steps.
While many companies are aware of the scarcity of top talent situation, most still use a surplus approach for attracting and screening these people. To offset this dilemma, they use a battery of indirect assessment tools in the belief this will allow them to hire stronger people. In the Four Types of People post, I contended that while this will minimize Type 1 and Type 2 hiring errors, it will result in more Type 3 hires. These are people just like those whom the company has always hired. This is not necessarily a bad thing if all of these people are strong, but it does prevent improving the overall quality of the people hired.
In order for a company to raise its average talent level it needs to hire more people above the current average. This requires programs based on how these stronger people look for new jobs and how they decide to accept one job over another. While most companies know this, they insist on using methods that preclude this from happening. This is what’s referred to as a Catch-22 from Joseph Heller’s book of the same name. The video describes the problem and offers some techniques to break free from its circular reasoning.
Bottom line: You can’t use a surplus of talent approach for hiring new people when a surplus of talent doesn’t exist.
Here’s a story that gives horses a bad name. This is a continuation of a series of articles focusing on the national skills gap problem we’ve been hearing so much about lately. As you’ll see, my take is that we have a thinking problem that makes whatever skills gap we have worse.
From what I’ve seen, the root cause of most hiring problems starts by using the wrong talent strategy. Most companies use a surplus of talent strategy in a scarcity of talent world. I call this the Staffing Spiral of Doom Catch-22. (Here’s a video that I put together with LinkedIn summarizing this idea.) The underlying assumption behind a surplus model is to get as many people to apply as possible and weed out the weakest, with the hope that a few good ones will remain. This doesn’t work of course, if the surplus assumption is wrong. If your company posts boring job descriptions, hiring managers are disengaged, candidates are forced to apply and then screened out on factors that don’t predict success, you’re using a surplus model. This will work if there are plenty of good people to choose from, but if not, you’re just spinning your wheels, mistaking activity for progress.
A talent scarcity strategy starts with the premise that the demand for top talent is greater than the supply. As a result, the company needs to put the necessary resources and processes in place to attract and hire these people despite the competition. Since the best people always have multiple opportunities they are not the least bit interested in jumping through hoops for something that appears to be a lateral transfer. Yet most companies, even in the face of a talent shortage problem, continue to use traditional skills-based job descriptions for advertising, screening, and selection purposes. This is certainly putting the cart before the horse, with the driver (aka, the recruiter) somewhere behind both, doing what’s necessary to clean up the mess. As you’ll see even from a compliance standpoint (OFCCP and EEOC), putting the horse in front increases not only compliance, but your company’s share of top talent.
The graphic below summarizes the hiring decision-making process into four big time-phased groups. The problem with a surplus of talent strategy is the focus on “Before Day 1” criteria to screen out people, when the best people are using “Year 1 and Beyond” criteria before they’ll screen themselves in. It doesn’t take much to figure out that this backwards thinking eliminates everyone who is any good.
This is the Catch-22 problem mentioned above, screening out good people for skills most of them don’t have. And even if they do have them, they aren’t interested in getting more. Here are some ideas on how to solve the horse-cart-driver problem:
Before Day 1: This is what the candidate needs to have in terms of skills and experience before being allowed to enter the assessment process. It also represents the bulk of what’s described in the posted job description and what’s used to screen out the undesirables. From a compliance standpoint this is considered “objective” even though it’s not valid. If you’ve ever hired or promoted a person into the role who’s been successful with less than what’s listed, you know that this stuff is mostly guesswork. Just imagine how many good people get screened out using this “flawed” objective criteria.
Day 1: This is what the person hired gets on the first day on the job: a salary, in some office, at some company, in some city, with some generic title. Most good candidates want to know this information right away to see if it’s worth spending more time with a recruiter. What’s surprising is that while this criteria is used as an initial filter for candidates, it’s second or third or unimportant when the person decides to take the job, or not, especially if they’re comparing multiple opportunities. So unless you can bridge this “engage vs. accept” logic gap you’ll lose another chunk of great people.
Year 1: This is what the person actually does on the job and who they do it with. This is the work itself, including what the person is going to learn and do. The hiring manager and the team are equally as critical. Collectively, this is what drives satisfaction, and if the work is important, exciting, and done well, it leads to long-term growth. Equally important, it’s the primary information a top person uses to compare offers. Surprisingly, most companies don’t even discuss this stuff with anyone other than final candidates. By then, many of the best people have opted-out on their own, or never entered the fray in the first place.
Beyond Year 1: This is what the person can become if he/she successfully completes the challenges of Year 1. This is the career growth opportunity represented collectively by the job, the hiring manager, the team, and the company. While implied in many postings and discussed superficially, it’s mostly vague and generic, and as a result, downplayed.
Here’s the dilemma exposed by the graphic shown above. There’s too much emphasis on what the person brings to the table and what the person hired obtains on Day 1. The Catch-22 problem is that there are great numbers of people who can do the work required (Year 1) who don’t have the exact skills listed on the job description (Before Day 1). Many of these people, especially the best ones, would be interested in considering the opportunity represented by Year 1 and Beyond, but never get the chance. For one thing, jobs aren’t advertised this way. For another, some recruiter or hiring manager screened them out based on the wrong factors. Worse, the best prospects screened themselves out, since the offering as described represented a lateral transfer.
Emphasizing Before Day 1 requirements, screening out on Day 1 criteria, and hoping the best prospects will somehow figure out the Year 1 and Beyond opportunity severely limits the pool of people being considered. Yet this represents the fundamental hiring process used by most companies. This is a Surplus of Talent strategy and mindset in action. This problem is aggravated when these same companies use these same processes to hire passive candidates, who aren’t looking for another job, but might be open to evaluate a job if it represents a true Year 1 and Beyond career opportunity.
The key from a compliance standpoint is to ensure objective criteria is used to screen people out or in. However, objective criteria is not limited to skills, experiences, and academics. Year 1 criteria listing key tasks and measurable performance objectives are equally as objective. In fact, one could easily argue that “installing an SAP consolidations module in six months” is more objective than “must have a CPA and five years ERP systems background.” More important, the “Year 1” project is far more exciting from the candidate’s perspective than meeting the “Before Year 1” experience standard.
By defining Year 1 and Beyond before defining Day 1 and Before, the horse is put in its proper place, and there’s no mess left behind. And then when the Year 1 and Beyond criteria is used for advertising and screening, the pool of exceptional prospects increases dramatically. For one thing, it opens up the door to more minority, military, and diverse candidates who have a different mix of leadership experiences, but are fully qualified to handle the challenges defined with minimal training. As far as mixing metaphors goes, not only is the horse put in its proper position this way, but you can then have and eat your cake, plus all of the icing.