Why do 95% of companies make bad hires?
eAA Board Member Graham Hudson is a long-standing member of the educational assessment community, having worked in the sector for over 30 years. Here he writes for Training Zone.
95% of organisations of all sizes admit to making bad hires every year, according to Brandon Hall Group’s 2015 Talent Acquisition Study. Nothing seems to have changed since The Economist reported in 2006 that finding the right people is ‘the single biggest problem in business today’.
What’s the cost?
What does this cost a business? In 2012, research by Bersin & Associates (now Bersin by Deloitte) showed that the average UK spend was over £5,000. That does not take into account any interim costs while a post is being filled, or the costs of onboarding and inducting the new hire, or the productivity costs while the new hire gets up to speed – something that Bersin estimates costs £25,000.
If that hire proves to be unsuitable after six months and the processes starts again, these costs have just doubled!
Read most advice about recruitment and it will point towards being clear about what you want, providing appropriate structure, having good teams briefed on their roles in the recruitment process. All good advice. But what about:
- The attitudes to work, colleagues and life that a new hire brings
- The ability to learn information and processes necessary for the role and to think and learn relative to the demands of the job
- The specific behaviours and approaches each has to accomplishing life-tasks and getting work done necessary for the role?
If salespeople, for example, are expected to prospect actively for new clients, you’d want to know for sure that they will make regular calls, follow up with leads, go to places where potential clients meet; anyone can say that they are Brad Pitt at an interview. You just don’t want to find out that they are really Mr Bean after their first week!
Using the right tools
Competency-based assessment is nothing particularly new. But now, through the use of the cloud, this is readily available for recruiters to access. Good tools provide a base for the assessment of defined behaviours, examples of which include:
- Authority Relationships – Demonstrating cooperation and respect for leaders
- Goal Orientation – Believes in setting realistic goals that are achievable
- Self-Responsibility – Taking personal accountability
By matching these behaviours to defined competencies that relate to a job role, a ‘best-fit’ profile can be created. Thousands of iterations of the use of such instruments refine the fit and create a strong predictor of behaviours that are almost impossible to discern with any accuracy through traditional interviewing.
Good tools offer a significant range of typical job profiles that, for the most-part, meet the needs of most recruitment. Executive, supervisory, HR, hourly-paid, retail, manufacturing, sales, office, financial, IT and legal are provided off-the-shelf. Bespoke profiles can be produced for specific campaigns.
An ‘at a glance fit’ to the profile is provided in reporting tools, for example:
Taken from a sample report for an engineering role using the Devine Hiring Plus tool. More detail of the fit to competencies is provided alongside the high-level view:
Interview questions tailored to the respondent’s profile are provided, which have a behavioural slant:
The information provided makes a key difference to assessing the fit of the applicant to the role and provides the opportunity to explore the person’s awareness of their fit through focused questioning.
In this example, the person taking on a customer-focused engineering role scores well in the important areas of:
- Customer-service orientation
- Technical support skills
- Work effectiveness
- Problem solving
All the kind of things you want to see and to provide a good basis for supporting the remainder of the recruitment process.
What’s the candidate experience?
Candidates are sent a link by email to the online assessment. They are presented with a series of statements and must respond to the degree each statement represents their typical work behaviour (the Devine Inventory is a binary forced-choice type of assessment unlike the Likert, Free Choice, styles types). The resulting outputs produce a full view of the prospective employee’s competence and potential.
But, who wins with this approach? The candidates have the chance to demonstrate their competencies using an industry-leading tool. The employer has empirical information to support normally subjective areas of competence. Better questions can be asked of candidates that focus on their behaviours and not acquired knowledge from an institution or interview technique. The kind of things that you might not find out until you have had the person in the business for six months!
The investment in the assessment reduces the risk of a bad hire considerably not only financially (which is significant), but also disruption to the business, diversion of management time and potential reputational damage.
With such instruments readily available, using scientifically research-based assurance, recruitment processes and outcomes can only get better.