When a new hire does not work out, the repercussions for your business include lost dollars, lost time and an emotional drain on coworkers, leadership and customers.
A small water treatment company recently hired a sales manager who appeared to have the qualities needed to succeed. The candidate was charismatic and convinced the owners that he could help them grow their business. For six months, he received a hefty salary and made not one retail sale. His departure left the business owners concerned about ever hiring another sales manager.
Yet not hiring a needed employee means those owners cannot expand their business because they have to do so much themselves. Ultimately, without the right people in place, a business will not be able to take advantage of growth opportunities.
How can you predict performance and lessen the risk of hiring someone who seems competent but turns out to be unable to meet performance expectations? Here are three steps you can take to minimize risk when making an important hiring decision for your company:
Develop the right job profile
The profile is not a job description. It is a document that is used for marketing the job opportunity to qualified candidates and identifying the ideal candidate. It serves as a blueprint for success that describes performance expectations with measurable results. Usually the profile has a section describing the organization, the position and the ideal candidate.
- The organization: Give the candidate a brief history of your company that details the vision of the founders, the working environment and any recent awards. If you are a small company that does not have a national brand, it is even more critical to take the time to describe who you are.
A more sophisticated candidate will usually be cautious about moving to a smaller organization that is not well known nationally. What matters is that the right candidate is attracted to your specific organization for the right reasons. For instance, a candidate from a large company may want to move to a more entrepreneurial environment that provides him or her the opportunity to be involved in a wider range of experiences.
- The position. Start by identifying the results necessary for success in the position to be filled. The key is to think about what the ideal outcomes look like and make them part of the profile. The best job profiles are stories that describe the ideal outcomes as expectations. Using the sales manager example, one of the outcomes might read, “The sales manager will increase sales by 15 percent for our company.”
Another expectation might be that in two years the new sales manager will expand his or her team with two junior sales staff who collectively will grow the business by another 50 percent. Each accomplishment is made up of a measurable outcome with a time element attached.
The ideal approach is to observe a great performer on the job. Identify someone who is currently doing that particular job extremely well and interview that individual. Ask to see his/her performance review because this enables you to see what they accomplished in the past year in measurable results. Not everyone is comfortable sharing a performance review, of course, but when you are able to get hold of one, it makes the job profile much easier to develop.
In small organizations, it may not be possible to find someone within your company who already has done the job, especially if the position is newly created. In this case, think back to what you have already accomplished in your company and how you made it happen.
Another option is to speak to a successful sales manager who works for a friendly competitor and learn what measurable results led to his or her success. You might be able to do this while attending an industry conference or local business event. If this is not a viable option, imagine that you already have on board your ideal employee and think about what outcomes would take your business to a new level of performance. When putting the outcomes on paper, make sure that these are achievable goals. If the outcomes are not attainable, very few candidates will be able to meet your expectations. The key is to have outcomes that meet your business needs and are realistic enough to be met by a qualified new hire.
Once you have articulated your ideal outcomes, the next step is to figure out how the new hire will go about making them happen. Every organization is made up of people who have agreed on what behaviors are acceptable. These behaviors are what define your company’s culture. The new hire must be able to accomplish your objectives while honoring behaviors acceptable to your organization.
Taking a step back and noting what behaviors work for your environment is critical to ensure that a new hire will fit into your culture. A successful profile will describe the outcomes and the behaviors that will lead to success. For instance, integrity is a behavior that an ethical organization is looking for in each of its hires. This may be manifested in various ways, such as recommending products that make sense for each client instead of pushing unnecessary products just to make a sale. If your client base is diverse, you’ll want the sales manager to be comfortable working with a diverse group of people. Taking the example of growing sales by 15 percent, the profile might say:
“The sales manager will grow our business by 15 percent within one year. He/she is effective in building strong ties with culturally diverse groups and builds relationships with key referral sources within our community.”
- The ideal candidate. The profile should also have a section that describes the experience the candidate must bring to the table to be considered for the position. This will include whatever is required to ensure success on the job. It is always best to require that the candidate have experience related to your specific business. If you are looking to fill a key role within your organization, such as a sales manager for your water treatment business, it is desirable to require a track record in sales growth for a similar organization servicing customers in your industry.
Some profiles list years of experience. I find that describing specific past experience in terms of results is more effective because it is more descriptive. In addition, there are candidates who have the required number of years of experience but are repeating the same year over and over. Requiring a certain number of years of experience may exclude an exceptional individual who accomplished more in a short period of time than what would be typically expected. This is the type of individual you want to include rather than exclude from your candidate pool. An example of how to describe a requirement without using years of experience might read, “Track record in leading sales growth by 10 percent yearly in the retail water purification business.”
If you are looking for someone who can lead and bring on board additional sales professionals, you might describe the requirement this way: “Has grown sales teams from scratch, including recruiting additional staff, coaching and ensuring successful team performance.”
When developing this section, I usually list two categories, one for the minimum qualifications and one for the desired qualifications. The minimum qualifications will determine who will be considered for the opportunity. In general, the best approach is to keep the minimum qualifications as generic as possible without compromising the quality of candidates. This will increase the candidate pool for consideration.
In the case of the sales manager for the water treatment business, it is better to narrow the experience criteria to your specific industry because of the technical nature of the sales function in this profession. On the other hand, if you are looking for an accountant, the requirement that the candidate come from the water treatment industry would more likely be placed under the preferred (not mandatory) qualifications. The accounting role is more functional in nature and in most cases accountants can effectively move across industries without a long learning curve.
Deciding what to include in the required versus preferred qualifications is a balancing act. Sometimes a risk is taken and exceptions are made. Some of my best placements have not met all the minimum qualifications but were highly motivated candidates who were a great culture fit for my clients. A lot depends on whether your business can afford to take a risk. In certain cases, a calculated risk can pay off in the long run.
Conduct a structured interview
The most effective interview approach in predicting performance is to conduct a structured interview. This involves preparing a list of job-related questions that are usually open-ended or behavior-based and focus on gathering specific past examples that demonstrate the candidate’s ability to perform the job. The principle behind this method is that past behavior predicts future performance.
The first step is to prepare a list of questions based on the expectations described in the job profile. Asking a candidate to describe similar situations from his/her past experience allows you to gather relevant information in order to assess whether the candidate is truly qualified to do the job. If the expectation is growing sales by 15 percent, an appropriate series of questions might be:
- Describe a time when you grew sales by at least 15 percent from water treatment residential clients.
- What was the situation?
- How did you go about finding new customers and closing sales with them?
- What approach worked best?
These questions will keep your candidate focused on providing you with examples of past experiences that can be utilized to assess their capabilities. In the case of the water treatment company with the wrong hire we discussed earlier, the owners made that hiring decision based on the candidate’s promise that he would help build the business. They should have asked him to provide specific examples from his past experience to demonstrate whether he could actually do this.
Provide a realistic preview
The realistic preview is one of the most effective ways to ensure that a new hire remains enthusiastic and engaged once they join your company. For instance, if you are hiring a candidate from a company larger than yours with more specialized resources, it is important to emphasize that the candidate will be expected to roll up his/her sleeves and wear many hats.
If you are up front about your work environment, the candidate can decide whether the challenge is energizing or to be avoided. Unfortunately, in most interview situations, the hiring manager is anxious to fill the job and spends most of his or her time selling the perceived positives about the opportunity and the company. But just because someone seems capable is no guarantee that they are willing to take on the challenges at hand.
Developing a job profile, conducting a structured interview and providing a realistic preview are three steps you can take to minimize the risk of making a bad hire. Hiring employees who will make a positive impact on your business and stay long enough to provide value is essential to your success.
About the author
Marguerite Granat, the founder of Executive Discovery, an executive search firm, matches her clients with talented individuals who stay longer, are motivated and perform. Contact her at Executive Discovery, 1084 W. Camino Al Cielo, Suite 104, Pueblo West, Colorado 81007, telephone 719/547-7992 or via email [email protected]. Visit the company’s website: www.executivediscovery.com