Hiring someone new to work in your business is one of the most critical decisions a business owner makes, although it is not always given the justice it deserves.
When additional resources are needed, hiring decisions can be driven by the pressure to get someone in quickly, rather than waiting for the best person to fill the job. Recruiting without a proper, systematic process is another common and costly approach.
The direct and indirect costs of the hiring process are many, and have been estimated to fall between 40 and 75% of the person’s salary – even higher for more senior roles.
Some of these costs include:
- Advertising costs and agency fees
- Cost of time – for everyone involved in the interview process
- Cost of having the job unfilled if the process is lengthy
- Cost of lost productivity – “the show must go on!” Co-workers are picking up extra workload and completing unfinished projects. The reduced productivity of managers who lose key staff can be a big issue
- Cost of training – on average it takes 20 weeks for new employees to become fully productive. Consider also the costs of orientation, learning materials and lost productivity of the manager overseeing the new employee.
- Costs of person filling in – this may be a current employee, in which case their own job suffers, or a temporary person.
Further costs are incurred when the process is inefficient and time-consuming, and when the process does not result in the best person for the job being hired.
So there is a great incentive to hire the right people and keep them for as long as possible.
Recruitment is not only about finding the best person for the job; it’s also about minimising the risks of making a wrong call.
As a minimum, you should get across these four components of hiring successfully:
1. Job Definition
You need to have a clear understanding of what the job involves in terms of its main activities, responsibilities and priorities. There is a plethora of Job Definition templates out there to use if you need help with this aspect.
Once the nature of the job has been clearly defined, specify the attributes (education, skills, experience, and attitude) of a person who is likely to do the job successfully. While relevant experience is always nice to have, bear in mind that a person’s attitude is one of the biggest predictors of job success. You can always train a person to learn a new skill, but it is much harder to try and get someone to adopt a new attitude.
2. Attracting and Assessing the Right Applicants
There are numerous sources for finding applicants for a job. These include traditional newspaper advertising, approaching people directly, use of agencies, job groups, unemployment agencies and so on. The one you use will vary depending on the job and industry. When it comes to assessing applicants, most people make the same mistake – we all believe we are good judges of character and trust our instincts when it comes to making hiring decisions. Sometimes this will work, but often it will not. A sound recruitment process works to take as much of the subjectivity out of the process as possible.
To achieve this you need to be organised in your approach to hiring. There are all sorts of assessments and “psychological” testing available now to make more objective hiring decisions. This is not practical for many business owners, so at the very minimum you should include the following steps in your process:
- Have a written definition of what the job involves
- Decide what skills are essential for the position – this can include technical skills and qualitative skills such as communication, negotiation etc.
- Develop a list of questions to get an understanding of each applicant’s experience in each essential skill.
- If possible try to interview with another person present to ensure you are not being biased in a particular direction ?Ask every applicant exactly the same questions, and note down their answers so you can compare them afterwards.
- Make your selection based on each applicant’s fit to the essential criteria – only use the responses they gave you during the interview, don’t let your “instinct” take over.
3. Use Behavioural Interviewing Techniques
This sounds like a mouthful, but in truth it’s a simple concept: the best predictor of future performance is past behaviour.
So, if they’ve behaved a certain way in the past, there’s a good chance they’ll behave that way in the future. The key for the interviewer is to find out what they’ve done in the past. Anyone can tell you what they will do if they come to work for you, but they’re probably just saying it to get the job. You need to know specifically what they actually have done.
Here’s an example of a poorly designed question which allows the interviewee to say anything they like:
Tell me how you would handle a complaining customer.
Here’s the same question designed to get the interviewed to describe a past behaviour:
Tell me about a time when you had a customer complaint. What exactly did you do to resolve the issue on that occasion?
So you are asking your questions in a way that forces them to give you a real life example. If they can’t come up with an example, then you know they probably haven’t been in that situation before.
Behavioural interviewing allows you to collect much more valuable information about the candidate’s actual experience so you can make the best hiring decision.
4. Interview Structure
A good basic structure for an interview is:
Greet, chitchat, make them feel at ease, build rapport.
Tell them how the interview will be structured, and that they’ll have time to ask questions at the end.
Tell them you’ll be asking for specific examples, not generalities, and that you’ll give them some time to think if they need it.
Begin with questions based on the CV – work history, experience etc
Ask behavioural questions to get information on the technical and interpersonal skills you are looking for
Give brief details about the hours, salary other working conditions
Ask them if they have any questions
Advise what the next steps are
The hiring decision is an important one with many consequences. A good choice results in an effective employee who will help your business meet its goals and objectives. A poor decision will lead to reduced productivity and increased costs. Having sound recruitment processes provides your strongest chance of hiring the right people, with the right attitude, for the right jobs.
