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How To Avoid The 3 Biggest Problems In Your Hiring Process - And Save Millions

by Dr. Brad Smart

11 minute read

    We all know that in business, if something is important it has to be measured.

     

    But most companies do not measure one of the most important things that can be measured in any business.

     

    And that’s hiring successthe quality of people coming into the business.

     

    Now, the quality of your hiring process may not be a priority for your team right now. And that's understandable during a downturn. After all, you're worried about keeping your marketing engine running, securing the cash flow you need to pay employees, and refining the strategy that's going to allow you to thrive during this mess. 

     

    But this is the time when you really want to double-down on your hiring practices. Because you'll be taking on new talent sooner than you think as the realities of turnover, competition prying your talent away, and your organization challenges set int. 

     

    So what would you find out if hiring success was something you were already measuring? 

     

    Finding Out Your Hiring Success Rate

    Let’s start with a little bit of math. We’re going to calculate just how much mis-hires are costing your company in dollars and hours. Just so we're on the same page, I'll clarify what a mis-hire is. If you hire someone on, but you don't feel you got the talent and performance you expected, and don't feel you got your money's worth, that's what we would categorize as a mis-hire.

     

    These numbers are based on an interview I had with a CEO and they are conservative. Now, replace the numbers to reflect those of your own company, and note down the answer that you get. 

     

    how much mis-hires are costing your company

    Let's take a closer look at what these numbers mean. When we do the math, this breaks down to:


    750 mis-hires annually X $100k cost = $75 million in cost
    750 mis-hires annually X 100 wasted hours = 75,000 wasted hours

     

    Because their hiring success was low at just 25%, this company lost out on $75 million from not having the right people on the bus and an estimated 75,000 hours from lost productivity time! All this wasted investment comes about because the company did not have an effective process for weeding out serviceable "B" Players and "C" Players, to ensure that they bring "A" Players on board. 

     

    Intuitively, you know that you want A-Players. They “carry” the company, while C-Players suck the creative, positive energy out of the company. Because they are such high-performers that consistently deliver exceptional results, "A" Players are able to use their numerous capabilities to give your company the competitive edge that allows you to scale.

     

    Most companies only successfully hire A-Players about 25% of the time, wasting millions of dollars or hours, both scarce resources that can definitely be put to better use. You want to be at at least 90% success rate for these type of employees

     

    You may think this might not be possible with the current hiring processes in the market today.



    And this is where Topgrading comes into play.


    “The ability to make good decisions regarding people represents one of the last reliable sources of competitive advantage, since very few organizations are very good at it.”
    — Peter Drucker

     

     

    The Way We Normally Hire Only Works 25% Of The Time

    Too often our candidate interview process gives an illusion of thoroughness. But it lacks a method that allows the interviewer to separate the high performers from the low. Sadly, what passes for “best practices” often includes these steps:

     

    • A cursory job analysis is created.
    • That analysis usually leads to a vague job description, which perhaps only identifies six competencies out of dozens that are crucial for success.
    • These meager competencies are then investigated through a few (easily faked) round-robin competency (behavioral) interviews, each 50-minutes or less in duration.
    • Conclusions are “verified” through cursory reference checks that are only marginally useful because most companies don’t allow managers to take reference calls and besides, reference sources are provided by candidates who “salt the mines” with buddies.


    You might be thinking that this sounds reasonable enough. Surely, this process will yield some top level candidates? Through years of experience I know that sadly, this isn’t true. At best you might luck out with 25% of A-Player hires.

     

    the 3 definitions of an a player

     

    There are 3 reasons why this happens. 

     

    Mis-Hires Occur Because Of 3 Common Mistakes

    What the process above lacks is a way to eliminate the three biggest problems in hiring, which are:

     

    1. Rampant dishonesty by low-performing candidates who can easily fake their resumes and their interviews
    2. Insufficient information, because most companies use superficial, 45-minute competency (“behavioral”) interviews to screen candidates. Read up on “Acing that job interview” online, and you’ll find tips on how one can control such interviews and easily hide weaker points!
    3. Lack of verifiability, as most reference checks are practically useless. They are either just fact checks with Human Resources departments, not done at all, or are conducted with the candidates’ buddies as references. Based on this, even the weakest of candidates can get away with problem #1, rampant dishonesty.

     

    Yes, Resume Lies Are A Big Problem

    A survey by CareerBuilder.com reports that out of 2,000 people, 58% of the candidates lied on their resume. The study showed that prior to the recession only 33% of interviewers took more than 2 minutes to read resumes, and because of rampant lying the figure rose to 42%.

    I’m going to reiterate, it is easy for C-Players to write a resume that looks like that of an A-Player. There are dozens of online articles that help with doing just that. Most C-Players know they can get away with faking it because reference checks are superficial.

    I’m going to show you how Topgrading eliminates these lies and allows you to consistently hire more A-Players than any other method out there.

     

    Eliminate The 3 Mistakes With The Topgrading Hiring Methodology

    Topgrading is the result of decades of research I conducted with my team to refine the recruiting, hiring, and onboarding process for companies all over the world.

     

    The most effective part of this methodology is the "Truth Serum", which has worked to weed out the undesirable candidates for decades. It's a simple step that has worked over and over again because of one detail that has led to major changes in results:

     

    All company application forms must inform candidates that the final step in hiring - the reference calls with former bosses and others - is for THEM (not you) to arrange.



    Aside from that, we also ask for salary history and boss ratings. Because candidates know that they have to arrange reference calls, we find that the information they provide for both turn out to be amazingly accurate.

     

    Let’s explore how this process works a little more:

     

    Step 1. Start with the “Truth Serum”

    For more than three decades, the "Truth Serum" has motivated all candidates, even the C-Players, to tell you the whole truth in interviews. As I’ve mentioned above, at every step in the hiring process, just remind candidates that a final step before receiving a job offer is for THEM to arrange reference calls with former bosses and others.

    There are a dozen “Yes, but Brad that won’t work because…” concerns about this approach and we will address them in the future. However, you’ll have to trust me that when injected with the “Truth Serum,” most C-Players will drop out (because they likely faked their resumes) and A-Players will happily arrange those reference calls.


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    Step 2. Use the Topgrading Career History Form

    About half of all resumes contain deliberate falsehoods. You can't tell an "A" Player from a "C" Player from a resume! And that makes the hiring process really frustrating and time-consuming.

     

    The Career History Form is a pre-screening document that produces the Topgrading Snapshot. Candidates fill out a Career History Form that has the truth serum embedded in it. The form asks for full compensation history, honest boss ratings, and much more. On every page of this form, candidates are repeatedly told that, as a final step before getting the job offer, they will be expected to arrange the reference calls with former bosses themselves.

     

    As a result, this form produces an authentic overview snapshot of each candidate. With this, you’ll immediately be able to screen out weaker candidates, saving you not only time, but more importantly, ensuring you’ll only interview sharp, well-qualified candidates.


    Step 3. Screen your candidates

    Now that we've narrowed down our list of candidates that we want to talk to from the previous step, we are ready to conduct interviews. So what's the problem we face? Well, if we invite all the candidates for in-person (or virtual) interviews then we'll spend hours and hours with them. And we'll discover a few candidates who really could have been screened out earlier if we had done a brief telephone interview with everyone beforehand.

     

    In this step, we screen candidates with a phone interview, and then move forward with the competency and Topgrading interview with our best candidates

     

    To save time, it's best to screen candidates on the phone, so we can later invite the best candidates in for face-to-face (or screen-to-screen) interviews. Take notes during these phone interviews. Here you can describe the company and role to the candidate. The - using the info you learned from the Career History Form - ask your candidate about their 2 most recent jobs (successes, failures, how their supervisor appraises their strengths, and why they left the role). You can also ask up to 6 competency questions if there is time.

     

    Once we've taken care of that, we can conduct the more in-depth competency interviews. The trouble with traditional competency interviews - also known as behavioral interviews - is that they fail to accurately reveal competencies or behaviors! These interviews tend to ask for an example and then the candidate gets to choose whichever example he or she wants to talk about.

     

    To ensure better answers, conduct the competency interviewer with an in-depth competency checklist to refer to when you interview candidates. By doing these two interviews right, we have set ourselves up for success when we conduct the Topgrading interview. 

     

    Step 4. Now it's time to conduct the Topgrading Interview

    The Topgrading interview reveals many, many examples of every competency identified for your role. It enables you to see how the candidate has evolved throughout the entire career. Every question gives you insights to what the candidate is like today. 

     

    You conduct the Topgrading interview by referring back to what you have learned from the candidates career history form and previous interviews. It is structured so that you are able to ask questions that focus on: 

     

    • Their early ecucation years 
    • Their work history 
    • Their self-appraisal of their strengths and weaknesses 
    • Their plans for the future

     

    The Topgrading interview can possibly double your hiring success from 25% to 50%.


    Step 5. Recruit a Tandem Interviewer

    You'll want to recruit someone to do these interviews with you, because two heads (and minds) are a lot better than one. You can learn a lot by watching a candidate while your counter interviewer asks questions. Conduct the Tandem Topgrading Interview with a trained tandem interviewer.


    Step 6. Finally, conduct reference calls with former bosses

    Follow through on #1 — ask the candidate to arrange the calls and you and your tandem interviewer talk with those former bosses.

     

    This process more than triples successful hiring because it solves the biggest problems that account for 75% mis-hires.

     

     

    What Benco Dental Did When They Discovered The Real Cost Of Their Mis-Hires

    Benco Dental is the largest privately held dental supply/equipment company in the United States. In 2006, their Managing Director, Chuck Cohen and Vice-President of Culture & People (HR) George Rable initiated Topgrading.

     

    benco dental initiated topgradingPrior to rolling out the Topgrading methodology, George Rable received some pushback from managers who complained of not having 3 hours to conduct an interview. After asking managers for the estimated cost of a mis-hire, George was able to show that in the previous year, mis-hires cost the company ⅓ of its profits!

    “Topgrading has become a key component of Benco Dental’s culture. Managers have bought into the need to conduct thorough screening, Topgrading tandem interviews and background checking. We believe our biggest success to date has been our hiring in management. This has a direct impact on the quality of associate hiring as excellent managers hire the best associates,” explains George Rable.

    For managers, hiring improved from 27% to a projected 60% of A-Players, as rated by the CEO and two top HR managers. Since beginning Topgrading, their success hiring and promoting has improved by 33% (2007), 39% (2008), 43% (2009), and 47% (2010).

    They initially conducted beta tests in the sales area, and after a successful testing period, they rolled out Topgrading throughout the company.

    You can find more, relevant case studies from companies with similar goals HERE.

     

     

    Topgrading Helps You Better Find A-Players

    The simple fact is that this method helps you develop and retain top talent.

     

    You will dramatically change your organizational culture and raise the performance bar for everyone, attracting more top players to your team.


    A-Players like to surround themselves with other A-Players. The result, as George Rable states above, is improved organizational performance. Not to mention the long-term benefits of saving time and money in your organization.


    On a more individual level, having employees that you can rely on means you will be able to delegate tasks with peace of mind.


    So, before I end this piece, I’d like to ask you to go back to the beginning of the article and calculate how much your mis-hires are costing your company.

     

    Would you like to see this figure change? 

    Resource Guide

     

    Triple Your Success At Hiring High Performers In Just 8 Weeks!

    Your organization is only as strong as its people. That's why even a few critical mis-hires can cost you millions in wasted money and thousands of wasted hours! 

     

    We've teamed up with Dr. Brad Smart to give you Topgrading methodology — regarded as the most effective hiring method on the planet — in the form of the Topgrading Master Business Course!


    This program is designed to help you make the best decisions in your search for the best people at key roles in your business.

     

    You'll accomplish greater hiring success rates and more in just 8 weeks of in-depth coaching and instruction!

     

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    Learn how the Topgrading Master Business Course can walk you through the best methods to pack your team with A Players, today! 

    Dr. Brad Smart

    Dr. Brad Smart

    Brad completed his doctorate in Industrial Psychology at Purdue University, entered consulting, and since the 1970s has been in private practice as President and CEO of his own company, now called Topgrading, Inc., based in the Chicago area. Brad is frequently acknowledged to be the world’s foremost expert on hiring. The company consults with many leading companies and hundreds of small and growth companies. Brad has conducted in-depth interviews with over 6,500 executives. He is author of seven books and videos, including Topgrading 3rd Edition: The Proven Hiring And Promoting Method That Turbocharges Company Performance; The Smart Interviewer: Tools and Techniques for Hiring the Best; and the training series Topgrading Toolkit, featuring the 12 Topgrading hiring steps and demos of all the interviews. In addition, he has co-authored the following books: Topgrading for Sales: World-Class Methods to Interview, Hire, and Coach Top Sales Representatives, with Greg Alexander; and Smart Parenting: How to Raise Happy, Can-Do Kids, with Dr. Kate Mursau.

    Brad completó su doctorado en Psicología Industrial en la Universidad de Purdue, ingresó como consultor y, desde la década de 1970, ha ejercido en el sector privado como Presidente y CEO de su propia compañía llamada Topgrading Inc., con sede en Chicago. Con frecuencia, se le reconoce a Brad como el principal experto en contratación del mundo. Brad ha realizado entrevistas en profundidad con más de 6,500 ejecutivos. Es autor de 7 libros y videos, incluida la tercera edición de Topgrading: El método de contratación y promoción que acelera el desempeño de la empresa; The Smart Interviewer: herramientas y técnicas para contratar a los mejores; y la serie de capacitación Topgrading Toolkit, que presenta los 12 pasos de contratación de Topgrading. Es coautor de Topgrading for Sales: Métodos de clase mundial para entrevistar, contratar y asesorar a los principales representantes de ventas, con Greg Alexander; y Smart Parenting: Cómo criar niños felices y capaces de hacerlo, con la Dra. Kate Mursau.

     
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