In the Part 1 of this article series, I described the high failure rate of most new-hire processes and provided some basic tips on how to improve the assessment process during the interview. In Part 2, I will highlight some more advanced approaches that managers and recruiters can use to improve the overall recruiting and selection process and reduce the number of bad hires your organization makes. If New Hires Quit, You Have a Bad Hire: Tips for Minimizing New-Hire Early Turnover In the last article, I highlighted some of the tools you can use to improve candidate assessment and interviews. In this section I highlight some of the things you can do to improve the initial performance of new hires and to reduce the likelihood that they will quit within the first year. 1. Involve employees. Although I recommend that you put great effort and thinking into how you screen and interview candidates, it is still possible to have a very high on-the-job success rate even if major errors occurred in the screening process. This may sound counterintuitive, but bear with me for a moment and I’ll explain. If you have a less-than-perfect screening process, the best way to minimize the impacts of these errors is to ensure that the new hire gets “additional help once they start the job. In other words, even if the candidate does not have a perfect set of skills, they can still succeed if other employees want them to succeed. If other employees want them to succeed, they will provide the new hire with whatever special help, mentoring, and guidance they need. The best way to ensure your employees are willing to provide this extra help after the candidate starts the job is to involve the employees early on in the hiring process. Involving employees works because if they feel they are responsible for the new hire and that they own the hiring process, employees will invariably find a way to help the new hire succeed on the job. The best ways to increase employee involvement include paying special attention to employee referrals, providing peer-to peer-interviews, and, whenever possible, letting employees make the final selection from the group of finalists you have approved. 2. Avoid misleading the candidate by giving them a realistic job preview. A major reason for candidate failure and early turnover is that the candidate was misled about the job, the manager, or the company during the recruiting and interviewing process. It’s only natural for recruiters and managers to paint an overly rosy picture of the job, but the net consequence of over-glamorizing is that many new hires quickly become disillusioned, disappointed, or even angry when they find out after starting that their real job compares little to the one outlined in the interview. This can result in poor early job performance or early resignations. An effective approach for avoiding this rosy description is to give the candidate a realistic job preview. This realistic preview should include both positive and negative aspects of the job. It can be a video, a site walk-through, or merely a list of the positive and negative aspects of the job. You can develop a list of positive and negative job features through an anonymous survey of recent hires and people currently in the job. It generally includes not just the types of bad and good things that occur, but also their frequency of occurrence (example: we have flexible scheduling, but only 10% of the employees take advantage of it). 3. Ask candidates what they require for success. Many candidates fail on the job not because they don’t have the required skills, but because they are not provided with the right information, tools, or guidance. That’s why it’s important to ask finalists, “If you’re hired, what would you require in order to be successful?” By identifying candidates’ key success factors and needs, you can determine if those are even possible before you hire them, and you can provide that list to the direct supervisor, who can utilize the list to ensure that new employees’ needs are met so that they can get off to a fast and successful start. 4. Make sure you have a solid orientation program in place. Even a great hiring process can’t guarantee that you won’t end up with low performers and high turnover rates. This is because the selection process is only the first step to success. The seeds of on-the-job failure can begin the very first day on the job if the new hire’s orientation experience goes awry. For example, if the new hire starts and on their first day their manager is nowhere to be found, it can confuse and disorient them. During the first week, frustration and other problems can occur if the new hire has no computer, password, or cell phone to use. The absence of managers and the frustration of not having the necessary equipment might lead a new hire to develop poor habits that will permanently affect their productivity. In addition, poor orientation might cause candidates to develop such a negative attitude about the firm that they may prematurely quit. You can increase the positive aspects of orientation by guaranteeing face-to-face time with the new hire’s manager during the first week, by stretching orientation out over several weeks, and by ensuring that the new hire has the necessary equipment on the first day they start. One firm found that great orientation reduced new hire turnover by nearly 20%. Avoid “Candidate Abuse” To Avoid High Offer Rejection Rates And Early Turnover Even if you accurately assess the candidate, you are likely to lose candidates if you mistreat them during the interview and hiring process. In fact, several companies have found that the highest reason for offer letter rejection is “candidate abuse” during the hiring process. Some of the ways to decrease candidate abuse, and subsequently increase offer acceptance rates, include: 1. Stop doing stupid things during interviews. Sometimes interviewing managers can be the cause of high offer rejection rates. By taking phone calls during interviews, canceling and rescheduling interviews, appearing disorganized, or even asking illegal or silly questions, interviewers can easily scare away top candidates. Remember, great hiring only starts with effective skill assessment. If you disillusion or discourage top candidates, they will simply make up an excuse to drop out of the running or say no to your offer. Incidentally, you can only find out the real reason why they rejected your offer by asking them six months later. 2. Stop “death by interview.” Because over the last two decades there have been a number of lawsuits relating to testing, HR departments have become increasingly conservative in how they screen candidates. As a result of this fear, most hiring tests have gone by the wayside. The net result of this fear (whether real or imagined) is that companies have increased the number of interviews to make up for the absence of other screening tools. In some cases, interviews have proliferated like rabbits. Where one or two interviews used to be common, now multiple interviews are the frequently the norm. The net result of this trend is that candidates must endure a large number of interviews that are generally spread out over a painfully long time period. From the candidate’s perspective, attending a large number of interviews on different days is expensive and time-consuming. The long delays and the uncertainty stress the candidate and their families. The burden is even worse, however, because in a down economy, the odds of all that time and effort actually resulting in a job offer are actually pretty small. By reducing the number of interviews, holding them at night, and even trying to have them all completed on the same day, can reduce top candidate dropout rates and increase offer acceptance rates. 3. Stop “death by repetition.” In a related matter, when candidates are subjected to multiple interviews (at the same firm) it is quite common for different interviewers to ask exactly the same questions in back-to-back interviews. This tedious repetition is often because interviews by different managers are not planned or coordinated. It is also partially caused by interview training manuals, which, by suggesting appropriate questions to use in an interview, can inadvertently cause interviewers to use the same questions over and over. From the candidate’s perspective, having to answer duplicate questions over and over is frustrating and confusing. Lack of preparation can cause some managers to ask questions whose answers are clearly right on the resume, wasting valuable time and frustrating the candidate even further. By reducing the total number of interview questions and then assigning the appropriate interview questions to individual managers (based on their knowledge area), you can reduce repetition, candidate frustration, and offer rejections. 4. Don’t keep candidates in the dark. Another all-too-common abuse of candidates occurs when managers keep candidates in the dark about the interview process and what is expected during it. Candidates are not told about what will occur during the interview and what skills will be assessed. In addition, they are frequently not told who will be there during the interview and what the role of each interviewer is. This lack of information leads to confusion and frustration on the part of the powerless candidate ó all for no reason. There is no legal regulation that prohibits companies from telling candidates upfront about the process and what is being assessed during it. Failing to educate the candidate may cause candidates to over-prepare in unimportant areas and under-prepare in important ones. Not knowing who will participate in the interview prevents the candidate from doing research on the background of the interviewers. By telling the candidate more, you can limit their frustration and increase the likelihood that they will provide the information you need to make an accurate hiring decision. Reduce Interview Overload by Discouraging Less-Than-Qualified Applicants From Applying You are less likely to waste time and be fooled by less-than-qualified or uninterested candidates if you take some steps upfront to discourage them from ever applying. The fewer unqualified and uninsured candidates you have in your selection pool, the lower the odds that you might accidentally hire one of them. If you want to save time and avoid this possibility of error, consider one of the following approaches:
- Put automated self-assessment company culture and skill assessment tools on your website so that candidates can pre-screen themselves in or out of the process before it formally begins.
- Make a list (with specific numbers) of the disqualification factors that will significantly lower or eliminate your chances of getting the position. Put them on the website, along with the job description, as a pre-warning that they will not qualify if they meet any of the disqualification criteria.
- Post your average job acceptance/failure rate (in percentages) for applicants, so that people know upfront that the odds of anyone (other than the most qualified candidates) of getting the job are very low.
- Be highly selective in where you advertise your jobs, and create links to your website. Don’t place them in general interest publications. Instead, study the demographics of the most qualified people and place ads or job openings exclusively where it is highly likely that only the most experienced and qualified individuals will read them.
- Post frequently asked questions and their answers on your website. By providing these questions and answers, you can discourage individuals who would have not applied had they known in advance the answer to their specific question.
Only Sports Gets Hiring Right The only exception that I have found to extremely high new-hire high failure rates is in professional sports. Sports teams like the Yankees, Lakers, and the San Francisco 49ers are much more methodical and scientific in their approach to hiring than any business I have ever encountered. They rate and track every hiring success and failure in order to improve future hiring. Although any organization could use their metrics-driven approach to hiring, few actually do. Perhaps this is because hiring errors in organizations certainly don’t get the intense public criticism that occurs when a #1 draft pick fails in sports. If top managers were periodically made aware of their subordinate’s high new-hire failure rates and the costs associated with them, I’m confident that the approach that most managers take to hiring would shift toward becoming more scientific and more like the approach taken by professional sports. In a similar vein, because many business processes already have Six Sigma or better error rates, it might be time for hiring managers to bring in quality and process improvement experts from their own firm to examine and improve their hiring process. I have found that when managers put the same scrutiny and critical assessment into hiring as they do to selecting a software package or a piece of equipment, the extremely high failure rates and low on-the-job performance of new hires drops almost immediately. Conclusion It’s essential that recruiters and managers take a more realistic and critical view of the traditional interviewing and selection process. Rather then assuming that it’s perfect, they should instead examine it closely to identify its many nearly fatal flaws. In fact, if you look at the validity and reliability (the technical terms for accuracy) of interviews as a scientist would, you’ll find the accuracy of the process to be appallingly low. Why managers and recruiters consistently ignore these facts is beyond me, but such ignorance is unacceptable because weak hiring systems and bad hires cost firms millions of dollars. I have calculated the cost of a bad hire for numerous companies. The average cost is two times salary and when customer contact is involved, the costs can easily exceed half a million dollars. Instead of being complacent, managers and recruiters need to take a fresh look at the process and the metrics or measures that they use to calculate the percentage of “turkeys” that they hire. Throughout this article, managers and recruiters have been provided with some innovative approaches that can dramatically improve new hire success rates. Because they include less freedom and subjectivity than the traditional interview process, if you try them I guarantee they will produce higher offer acceptance rates as well as new hires who are productive and faster, who stay longer, and who are more satisfied with their jobs. At firms that do a good deal of hiring, the costs associated with bad hires can exceed their total profit for a year. The choice is yours, but remember your decision also impacts the lives and the future of all of the people you interview. So have the courtesy to do it right. Note: for the purposes of this article, the definition of a new hire “failure” includes a new hire that:
- Must be given major training or retraining during the first six months
- Voluntarily quits within six months
- Must be redeployed during the first year
- Is given performance management counseling during the first year
- Must be terminated within one year
- Is a finalist who refuses your job offer