WEDNESDAY 02/10/10
YOU’RE DOING IT WRONG
PART 1
If your child needs an operation, I’m sure you’re going to take her to a surgeon. If you had to appear in court, I’ll bet you would hire a lawyer. However, if you need to hire someone, you’ll just go ahead and do that yourself, right?
The reason you go to a doctor or lawyer is that they have training, skills, experience and a track record of success in a specialized area and you don’t. That’s okay, since you aren’t a doctor or a lawyer and presumably you are good at whatever it is that you do for a living. For those same reasons, it’s also a good idea to use a professional resource when it comes to recruiting and hiring employees. Why? First, most likely, you’re doing it wrong (Mr. Mom, 1983 – rent it, it’s still funny). Also, when you make a hiring mistake, it’s really expensive. At the very minimum, a bad hire will cost $10,000 and common estimates range from 1 to 5 times annual salary. See ADP’s Bad Hire Cost Calculator for what they say it costs. Whatever fee you’d pay to a competent recruiter who does quality work will pale in comparison.
First, some disclosure…I am in the professional recruiting and placement business, so I believe that there is tremendous value in the service I provide. However, for 5 years, I was a client of staffing firms and there are many out there who are just flat out terrible. There are bad doctors and lawyers, too. Whatever your business is, I trust that you do a great job for your clients and provide a great workplace for your employees. I’m also certain that there are others in your industry who don’t.
Anyway, back to why you’re doing it wrong. Does any of the following sound familiar? You’ve decided that you need to hire someone, so you make a list of the skills you want a person to have, which is now your “job description.” You post that on LinkedIn and CareerBuilder and wait for people to apply. Or maybe you’ll email it out to a few recruiters and ask to see some resumes. Then you’ll look at the resumes you get, pick a few that you like the look of and interview those candidates. You’ll ask them questions about what you see on the resume and decide if you like the person you’re talking to. Maybe you’ll have a few other people talk with the candidate, essentially repeating what you’ve done. Then you’ll pick the candidate that “feels” like the best fit, or the one everybody agrees feels like the best fit.
So what’s wrong with that approach? Mainly, it’s basically just a waste of time and money. In an extensive study, researchers at The University of Michigan analyzed how useful the traditional interview process is in accurately predicting a candidate will be a success on the job. Here’s what’s shocking: “the typical interview increases the likelihood of choosing the best candidate by less than 2%.” To put that in perspective, you could look at the resume and flip a coin to determine if hiring the candidate is the best decision and be correct 50% of the time or add an interview and get it right a whopping 52% of the time!
For those of you out there saying that’s not the case with you and/or your organization, click here and then here. But for those of you who can handle the truth, think about it logically for a minute. Most people who are interviewing at your company have no formal interviewing or recruiting training, have very little experience, as they typically have a job that they do that has nothing to do with interviewing. Of course anyone can usually spot a superstar or a total zero, but what about the other 90% of candidates? How do you put the odds in your favor that the candidate you hire has the best chance of success in the job?
The easiest and most economical way to do it is to hire a good recruiter or recruiting firm. Will it cost money to do this? Yes, but if you’ve got the right recruiter, the cost is a tiny fraction of what it costs you to do it yourself (if you’ve got a lousy recruiter, it’s a waste of money). But wait, you say, it doesn’t cost us anything to do this on our own if we use our own people. You can’t get something for nothing, unless you’re dealing with quantum mechanics, but that’s not what we’re talking about here.
There are obvious costs in the hiring process…cost to post a job on LinkedIn (about $200) or CareerBuilder (about$400), the cost to run a background check ($50-$150), etc. However, these are just the tip of the iceberg. There is a tremendous amount of time, effort and energy expended by every employee involved in the hiring process. Those employees who are looking at resumes, calling candidates, conducting interviews presumably have work they should be doing for your organization. So productivity is reduced and as was discussed previously, success rates only go up 2%!
Now think about what a good recruiter does in an average week. He will look at 500-1,000 candidates in the form of resumes, LinkedIn profiles, Facebook profiles, etc. She’ll make about 250 calls and talk to at least 100 people. He’ll interview at least 10 people in-person for an hour each and present 4 or 5 candidates to clients, which entails negotiating compensation, checking references, verifying degrees, testing job skills and dozens of other activities. Would you have time to this and do your job? If that’s a yes (liar!), then be sure to add all of the outside networking, referral networking, social media work and other activities needed to generate those 500-1,000 potential candidates. Also, be sure to read up on what’s happening in the industries you concentrate on, keep up with any legal or regulatory changes in hiring, listen to audio training programs, read training materials, etc., etc., etc. Sounds like a full time job? It is!
If you’d like to learn a little more about some common mistakes people make in how they hire and some ideas on how to avoid those mistakes, check out Part 2.
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