The Case Against… Hiring Underqualified Candidates (With the potential to grow into the job)

You shouldn’t hire those who lack qualifications but have the potential to develop on-the-job. Even though some hiring managers have used this strategy, they mistakenly believed that recruiting and hiring “underqualified candidates with the potential to develop on-the-job” would be easier to source, sell, and hire than the alternative of waiting for a fully qualified candidate to arrive. 

As an added bonus, managers assume that signing these candidates would be cheaper. Many of them would accept a lower salary offer. Well, after years of researching this practice, I have concluded that it usually creates so many costly problems that it consistently produces a low ROI. The remainder of this article focuses on the many problems that come from hiring the underqualified, with the potential to develop on-the-job.

My Long List Of The Problems… That Can Be Created By This “Hiring For Potential” Approach

When each of your job qualifications is a truly accurate predictor of on-the-job success, hiring someone who doesn’t currently possess all of your required qualifications will create a large number of problems. My complete list of those likely problems is listed below. Note that the most serious problems appear early on in this list. 

• Today, everyone has stopped listing “potential” as an acceptable substitute for a qualification – because almost every company long ago learned of the multiple problems associated with substituting “the potential to develop on-the-job” as a substitute for any missing job qualifications. You’ll literally have to search through thousands of job postings before you find a company that openly states in their job posting that they are willing to accept “the potential for developing these qualifications on-the-job” in lieu of meeting the actual qualification. 

• Managers need the new-hire’s maximum performance today – in our highly demanding world. Most managers need a new hire to reach their maximum performance almost immediately. So if they hire someone who is still developing, the manager won’t be able to meet their current performance goals. Instead, the manager may have to wait up to a year for on-the-job development before the new hire can complete their qualification. Only then can they finally meet their maximum production level. And of course, hiring someone who is initially underqualified will also likely lead to lower productivity, higher error rates, and greater negative customer impact.

• Defining and measuring potential is extremely difficult – trained psychologists use the most sophisticated tests, but still have great difficulty in defining and measuring a candidate’s potential. So it’s not surprising that untrained hiring managers almost always struggle to accurately identify candidates who have the potential to grow into a role. Not only does candidate identification take a great deal of time, but I estimate that managers get the designation of who actually has the potential to develop on-the-job wrong a majority of the time. Surveys show that on average, companies rate only 15% of those that they assess as high potentials. That means hiring managers will still have to fully assess the other 85% of their candidates who have little chance of having potential.

• Others will be forced to carry the load – whenever you hire someone who must further develop their knowledge and skills. You must assume you will face a lag in team performance unless you have others fill in or cover for the underperforming new hire. Of course, having to fill in will put added stress on your team members. And that extra burden will likely increase team turnover. Sharing the burden may even discourage some future team recruits.

• This approach is not cheaper – you may initially pay a lower salary to each underqualified new hire. But those salary savings are usually minuscule when compared to the dollar loss in both the new hire’s and the team’s productivity. You can expect the new hire to want a salary raise immediately after they reach their development goals. And unfortunately, many will quit if they don’t get that raise.

• Most managers aren’t good at picking candidates with potential – the director of global talent at Dell concluded that “people are horrible at predicting the future,” and the selection process that managers use is often inaccurate. Nearly ¼ of all managers openly admit to relying on gut instinct when they are picking candidates with potential. 

• The development of the new hire will be expensive and time-consuming – underqualified new hires seldom successfully self-develop. Instead, they almost always require a formal development plan. Implementing that plan will likely be expensive, and it will surely take up a great deal of their managers’ time. Another common problem is that the development plan may never be completed. At the companies that identify potential, new hires are provided with a development plan. And to make matters worse, more than half of the employees who have a plan will drop out of it before their plan is completed.

• Some managers simply aren’t effective at developing talent – because many hiring managers don’t have a track record of successfully developing their new hires. The recruiting function should identify these managers and then prevent them from hiring candidates who will require a great deal of development.

• The new-hire may be treated as a second-class employee – because it will be obvious to everyone that the new-hire lacks the complete skill set that others in the job have. There is more than a small chance that these new-hires with potential won’t be treated equally. They will be frustrated after they realize that they are doing the same job as others, but at a lower pay rate. And when the new hire is treated like a second-class employee, they may struggle throughout their development and even become an early turnover problem.

• Some of the required skills for the job simply can’t be developed in the short term – hiring managers who utilize this practice must realize that there are some skills that a new hire simply can’t develop in a single year. Those deficit skills that can’t be developed quickly include IQ, emotional intelligence, leadership, teamwork, and corporate values. So obviously, if a candidate needs to develop in any of these slow-to-develop skill areas, they shouldn’t be hired.

• Obviously, this strategy carries several risks – because under this approach, you are predicting a new hire’s future development capabilities. Users of this practice must realize that there is a significant probability that their development needs predictions will be wrong. And without the capability to develop on-the-job, it is likely that the new hire will flounder or fail. In addition, in a rapidly changing world, the skill sets that were deemed to be initially necessary for this job may change even before the new hire completes their full development.

• The accurate selection of potentials will be impacted by biases – because in the past, the designation of candidates with potential has been impacted by race, national origin, and gender. Recruiting leaders must be aware that these biases, along with others, may seep into the selection process, including the bias that some managers mistakenly assume older candidates have less potential. Unfortunately, when managers do select potentials, they tend to pick protégés who are just like them. Taken together, these biases will likely raise some serious legal issues when a manager’s selection has an adverse impact. 

• You must have an overall measure of success – you won’t be able to continue justifying this practice to your executives without a metric for determining what percentage of “your new hires with the potential to develop” actually reached their performance and development goals and whether their delay in getting up to speed was worth the wait.

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Other Things You Should Know About This Practice

There are a few other elements of this practice that users should be aware of. They include:

• This practice would be completely unnecessary if you had quality sourcing – some have argued that the need to hire the underqualified essentially goes away if you have an effective sourcing function that constantly brings in a stream of completely qualified candidates.
• Yes, AI can help in identifying potential – because AI tools can identify statistical correlations, they are increasingly used to predict future employee behaviors. For example, AI tools have successfully predicted incidents of theft, workplace misconduct, on-the-job injuries, and tardiness/absenteeism.”
• Consider the possibility that every candidate has this potential – before considering this practice. Recruiting leaders should ask themselves, “What percentage of all candidates have the potential to grow into their role?” Because it’s possible that literally every candidate with a majority of the qualifications will succeed on-the-job, provided that they have an effective development plan. 
• What if the new hire changes their desire to develop into the role – some recent hires may decide on their own that they don’t want to develop or that they want to develop at a slower pace. This lack of urgency around their development will obviously hamper their on-the-job performance and productivity.
• Should you tell your new hires that they have potential? – only 60% of companies tell their employees that they have been labeled as high potentials (hi-pos). Even though telling them may improve their retention, labeling them as hi-pos may also boost their ego and cause them to demand more.
• Peer interviews can help to identify those with on-the-job development potential – when a manager is seeking a second opinion on identifying candidates that have potential. I recommend that they use peer interviews to get multiple additional perspectives.

Final Thoughts

The three elements of this practice that should remain top of mind include the fact that the process of identifying which candidates have potential is extremely complex, time-consuming, and unfortunately, usually inaccurate. Given those three primary issues, coupled with all of the additional problems that were identified earlier in this article, in my opinion, you should use this underqualified hiring practice only when it is completely impossible to find fully qualified candidates.

Thanks for finding the time to read and share this article.

Notes for the reader

This is the latest article from Dr. Sullivan, who was called “the Michael Jordan of Hiring” by Fast Company.
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