Did you see Simon Swans article in the latest edition of Management Today*? Simon talks about the importance of interviewing and quotes Harvard University research that says that new hire failure costs can amount to five times salary. I thought the costs understated and suspect that Simon’s probably taken a fixed cost of salary and direct expenses but not included the lost opportunity costs that result from a new hire failure.

At this point you probably might discount my own research as being inflated, if I included it here, so let me point to Brad Smart’s book “Topgrading” ,as evidence, where he wrote that his research into new hire failure could amount to 24 times the salary. Much of these come from lost opportunities which, depending upon position, include lost sales, projects not met and so on

I thought it interesting that Simon’s solutions to the problem was to ensure that the Resume (CV) was accurate and that the interview process robust. All good stuff. However, a crucial part of the process is the six months that a company spends integrating the individual into the new job. 

* 5th August 2011

I’ve recently heard suggestions that the
more interviews and hoops candidates are expected to jump through…the
better the final quality of hire. Then a similar question was asked on LinkedIn and I thought I would repeat the answer in my blog.

The proposition is WRONG 

Very sorry, but it’s wrong. Let me clarify: I have spent the last ten years talking to CEO’s about
hiring and integrating people into their firm faster and more
profitably. Asking a candidate to do more and more tests and interviews simply clouds the process. Two interviews, one assessment and a follow up meeting to negotiate terms is enough. In my experience having a new hire failure or poor hires has more to do
with the lack of interview experience by the interviewer, an inability of interviewer to assess candidates correctly and
poor integration by the business.

Interviewers training
Directors that interview people for a job do so about two or three times
a year. Hardly enough time to gain great expertise or to maintain that
ability. This may be a reason why businesses rely on more and more interviews and tests. However, again in
my experience, tests are only as good as the ability to understand the
results. (Too many people will fix on one statistic from a test and base their
choice on that as opposed to a rounded assessment).

One solution is to encourage interviewers to undergo some training
before undertaking important interviews. Then to have some experts on
the interview panel that can provide focussed views.

Cost of failed hire can be shedloads of money off the bottom line
Interestingly the COSTS of NEW HIRE FAILURE can be huge and my research
confirms Brad Smart’s research that the cost of failure can range from
10 – 24 times salary.

So if you’re hiring at a salary of $45,000, choose a multiple and see how much a new hire failure could cost your business!

Links:

• 
  http://www.youtube.com/user/stephenharvarddavis?feature=mhee

The film on Sales and Marketing questions broke the 2000 views barrier this weekend.
The series on asking and answering interviewing questions has been a great success and in particular those on sales.

In total my YouTube channel has has over 9000 views and you can access all the films HERE
So for those that missed “Sales and Marketing Interview Questions” here’s another chance and more films are being planned
 

Sales and Marketing interview questions
www.stephenharvarddavis.com

There’s nothing more energising than success and nothing more tiring when things aren’t going well.

Last week I was speaking to one of my favourite friends… John Donnelly.
Now for those that don’t know John he’s one of the sharpest tools in any business toolbox. He lives in Spain where high level business people fly in to ask his advice and fly out again after a few glasses of sangria. We speak on SKYPE, as do many of his clients, and his wicked sense of humour has me regularly injuring myself when falling helplessly off my office chair.

John was reviewing one of my latest video-blog films and made some great suggestions on improving the final result. Everything he said was correct but it meant doing the film again! No problem, the result will be better and I’m energised to re-film it and send him the final (Director’s) cut.

In six months time…
On the other hand I feel sorry for another friend that’s going through a difficult time. Her new team is having great success and is delivering a first class product. As a result, however, is continually being pressured by others to produce more and more. They do this by focussing on the small areas that could be done better and just offer criticism whilst ignoring the excellent work of the project as a whole.

The result is that my friend has decided to leave and within six months will probably be giving in her notice. Having come to this decision she is finding that her tiredness has disappeared, she has a more relaxed attitude to problems at work and is becoming increasingly disengaged. In the meantime her boss keeps telling her “I don’t know what we’d do without you!”

He’s about to find out and at a most inconvenient time, I should guess. 

I’m often asked how to restructure a sales team to make them more profitable faster and how to identify and avoid recruiting order takers that eat up valuable management time.
So here’s a video I’ve uploaded on the topic and hope you find it useful

Hiring salespeople, avoiding ordertakers

I was at a meeting today at the IOD (Institute of Directors) and the discussion included a reference to the “Evil Twin Syndrome” which is the fact that one sees the best in a person at the interview. As my old boss used to say “They will always be at their smartest at the interview”

During the probationary period they will be perfect. Work hard and even do overtime. Then the day after a satisfactory probationary period there arrives “The Evil Twin”. The individual who is argumentative, difficult to manage and screams “unfair” at every opportunity.

However, having identified that most managers have suffered from the syndrome it’s also  true to say that at some time in one’s career one has probably also been “the evil twin” and caused some manager to go prematurely grey!

A number of friends are having a debate over the different emphasis that employers should place on qualifications and experience when looking for top talent employees.

Some place greater emphasis on a paper qualification such as an MBA and Degree and suggest that they prove capability and a level of knowledge to do a job. This group acknowledges the importance of experience but would automatically disqualify a job applicant without a qualification.

Those that support experience suggest that paper qualifications, whilst necessary, don’t demonstrate essential entrepreneurial skills such as imagination and drive. These can only be demonstrated by “past success in previous positions” and “related experience”. In addition, they point out, a twenty-year old degree is of little value in the current workplace!

The questions I have are these:

• When would it be appropriate or sensible to hire a person without a qualification?
• At what point do qualifications become less relevant than experience?

I read with facination Anne Fisher’s article in Fortune magazine  The Most Ridiculous Job Interview Questions asked by some leading companies to job candidates. She does defend them on the basis that the interviewers weren’t looking for correct answers but how the candidate responded to the question. So I asked some of my network how they might answer the questions.

Interview questions mentioned in Fortune include,

“Using a scale of 1 to 10, rate yourself on how weird you are.” — Capital One (COF)

“How many bricks are there in Shanghai? Consider only residential buildings.” –Deloitte Consulting

“You have three boxes. One contains only apples, one contains only oranges, and one contains both apples and oranges. The boxes have been incorrectly labeled so that no label accurately identifies the contents of any of the boxes. Opening just one box, and without looking inside, you take out one piece of fruit. By looking at the fruit, how can you immediately label all of the boxes correctly?” — Apple (AAPL)

Lack of expertise to anaylse answer

Most people thought the questions silly and was another “fad” that would probably not last. The reason being is that one has to be quite expert to analyse people’s reactions to situations to deterime “norm of behaviour” and most interviewers will not have that expertise.

Candidate’s rections

I’ve asked some friends of mine what their reactions would be to being asked such questions and here are some of the answers.

a) I would assume that the interviewer was “barking” and probably be impossible to work with.

b) To the bricks question from Deloitte I’d answer “Three” and then add “Red, Grey and Brown”
but my favourite answer was:

C) Answering the “weird” question I’d say “How weird do I have to be to get the job?”

A couple of people have asked me recently if it’s acceptable to search the internet for information on potential job candidates.

Information on the public platform
I think that it’s inevitable that potential recruiters will search the internet for details of their candidates. The information is in the public platform and often uploaded by the individual themselves. As such I think that it’s a good indication of personality, behaviour and the lifestyle of a potential candidate.

It would also give an indication of the candidate’s ability to use IT and to utilise correct grammar and good design. The hiring company then have another source of informationand on the candidate.

Reader’s Prejudices
The main problem, I think, is potentially the “prejudices” of the person reading the material. Pictures of the candidate drinking at parties or on holiday and might be mininterpreted. I have heard of candidates that have lost out on jobs as a result and this must be an extension of the “Horns & Halo effect” we are all used to in the interview process.

Andrew Lloyd Webber
What is interesting is those sites that are professionally managed for people. Let’s give an example. Andrew Lloyd Webber admits to not answering email, nor having a mobile phone nor, it seems, has the ability to open up a computer (See Piers Morgan’s interview on ITV) yet he has a superb website with updates on him, his work and his music. Obviously managed by others and very well it is too.

The question I have here is:
If a bad site produced by the job holder could be destructive in gaining a job, would paying someone to manage your profile on-line give someone an “unfair advantage” in the job selection stakes even if they were IT illiterate?

This is an answer I made to a question on Linkedin today about the failure of leaders to sack under- performing people. I thought it worthwhile also posting my answer onto my blog so that more of my network could read it.

I believer that business is going through a revolution.

In past credit squeezes firms and Governments would shed talent to reduce costs (the UK Government is about to do this again by reducing civil service personnel by up to 25%). The result was that essential knowledge and skills were lost and recovery took longer as a result.
So, this time round, firms have attempted to retain their talent, even those less productive, as leaders hope for a quick upturn. The problem is that the upturn is slow in the west.

Further problems are that with coming food inflation and possible grain shortages, extended insecurity as the credit crunch continues and Government policy that increases tax whilst reduces spending businesses are now being forced to start to look to their staff costs. This means that some of the “good” people will be shed as well as the “bad” and that the trend is to hire part-time employees.

I suspect that the result is that the “business revolution” will generate a significant percentage of the working population having a number of part-time jobs as opposed to a single full time position. (including professional firms such as lawyers, accountants and financiers)

There is security in this position for employees who may be “shed or fired” in that income is not reliant on one employer and totally and immediately lost on redundancy whilst the employer has a capability of expanding and contracting a workforce more easily.

So, in my opinion, it’s not “under-performers being hired or fired” it’s that we may be witnessing a change in the way employment may work in the future.