Delivering the Systems and Expertise You Need to Confidently Make Great Hiring Decisions
One of my very favorite songs is called Down Together by the Refreshments. The refrain includes the lyrics, “Cars break down and people break down and other things break down too so let’s go…down together”.
I had the chance to have dinner with Chris Mursau last Tuesday night in Chicago and we were discussing the single, most important reason why companies continue to experience a 50% failure rate when it comes to hiring. His assessment: Communication Breakdown.
How does this manifest itself thousands of times a day in the US alone?
- Hiring Managers understand what their priorities are in their role and they (rarely) include hiring talent to earn their bonus. As a result they email someone in HR that says “write me a job description“
- HR, not quite sure what to put in the job description, references similar jobs the company has filled in the past and creates it to get it off of their To Do list.
- The job is posted on the Internet somewhere and the resumes that come in get screened by the HR associate who wasn’t sure about the role in the first place.
- The resumes that pass the initial muster of the HR associate are forwarded to the Hiring Manager who looks at a few and decides to interview some people (though they’re not even sure what the HR team posted on the web)
- The first candidate comes in and the Hiring Manager asks a couple of associates to interview the person too (though these associates don’t have a clue what they’re even supposed to be interviewing for).
- The Hiring Manager narrows the pool down to 2 and then calls HR to ask them to decide who the best one is (again, without providing the HR team the definition of “best”).
If this sounds remotely similar, you’re not alone!
As you’ve likely read on this blog before, I believe there are 3 reasons why a new hire doesn’t work out:
- You failed to clearly define what you needed someone to do
- You failed to clearly articulate to the new hire what you needed them to do to be successful
- You failed to gain the agreement of the new hire on what it will take to be considered successful
I completely understand if you brush off my counsel but choosing to ignore this when even Chris agrees that it’s true is a true sign of foolishness.
A couple of months back I interviewed Patrick Thean about the success he’s experienced in building scorecards for new hires. He provided some great suggestions of the metrics he’s used along with the real-life example of presenting a scorecard to a prospective hire to help her “opt out” of the interviewing process because she determined she wasn’t capable of the job.
- You failed (as the Hiring Manager) to clearly articulate what you needed someone to do
- You failed (as the Hiring Manager) to tell the new hire what you needed them to do
Having a scorecard is a HUGE first step in making sure that you’ve put in the time to define what will determine success for someone who’s just joined your team.
Last month (January ’11) I had the opportunity to meet Pepe Charles from MAP. He’s an expert in helping organizations develop what they call “VITAL FACTORS”. You won’t be surprised to learn that these vital factors are another name for…wait for it…scorecards.
I asked if they’d be willing to share their proprietary vital factors with you as readers of this blog. They graciously said yes and so you can find a very robust list of things that you can measure across departments and skill sets here.
The day that I heard Pepe speak about these vital factors he brought something up that really stunned me (and I was also a bit embarrassed for not having thought of it myself earlier). There’s a very high likelihood that you’ve heard of the acronym SMART for goals. It commonly accepted that the acronym stands for:
- S: Specific
- M: Measurable
- A: Attainable
- R: Realistic
- T: Timely
What Pepe suggested was that the A (typically referred to as attainable) should actually stand for AGREED TO. What a revelation!
In summary, I now have 3 reasons why someone you’ve just hired won’t work out:
- You failed (as the Hiring Manager) to clearly articulate what you needed someone to do
- You failed to tell the new hire what you needed them to do
- You failed to come to an agreement with the new hire on what they needed to do
Those who have heard me speak publicly or have been clients of HireBetter are very familiar with my insistence that Job Descriptions are largely worthless when written by starting at the beginning. What I encourage people to do instead is to consider the Outcomes first.
The exercise goes a bit like this: at this time next year, what will this person have accomplished that will make you consider them “successful“. To drive the point home further I like to use this example:
You’re going to take this new employee out to dinner at either (a) the nicest restaurant in town or (b) Applebee’s. How will you decide the right destination when looking back on their performance?
The running joke that I’ve always chuckled about in my head is, “Does Applebee’s even exist any more?” As it turns out, it does. I found myself in Wal-Mart earlier this week with my kids redeeming gift cards from Grandma and I snapped this picture while checking out.
Food for thought:
- How would a superstar feel about you giving them an Applebee’s/Outback Gift Card as a Holiday Bonus?
- Would a bureaucrat and time-waster feel the same way or would they be thrilled at the gesture because it meant you knew their name?
P.S. If you’re remotely interested, here’s a link to download Applebee’s Nutritional Information – ouch!
David Sandler once said, “You can’t teach a kid how to ride a bike at a seminar”.
With that in mind, I personally don’t believe that you can teach someone how to be a great interviewer through a blog post. My hope is, however, that by using a few of these simple tips in advance of your next interview, you can do a much better job than you previously have.
Here are my TOP 4 WAYS TO BE A GREAT INTERVIEWER
1. Setting Up the Interview Properly:
Through my volunteer efforts with EO I was responsible for managing our Event Calendar for 18 months. During that time I learned that every great event that you’ve likely ever been to had great planning at the beginning. Some companies base their entire reputation on it (i.e. Disney). When everything is planned properly it says a lot not only about your company but also significantly increases your chances for success:
- Does the candidate have a copy of the Job Description and our Company Website?
- Have they been called, confirmed and sent directions to our office?
- Do they know how long they will be there and what the schedule is during their time?
- If we don’t share the schedule or expectations, what does that say about us?
- Who will greet them when they arrive?
- What’s the 1st Impression someone will have of our company?
2. When Your Team Plans the Fight, they Won’t Fight the Plan
Be sure that the Job Description, Competencies, and Accountabilities are distributed to all of those who are interviewing the candidate and everyone on the Interviewing Schedule has gotten the chance to review and ask questions. Here’s the Checklist:
- Does everyone have the itinerary for the interviews?
- Have you been selective in choosing WHO will interview people?
- Where will they be interviewed in our office?
- Has everyone received a copy of the Candidate Packet (Resume, Description of the Role, Prior Interview Notes)?
- Does everyone involved know what role the candidate is interviewing for and how/why they are being asked to evaluate the candidate?
3. Have a GAME PLAN with your Interviewing Team:
- Add or delete questions based upon what previous information (resume, Comprehensive Interview Notes, preliminary interview notes) has revealed about the candidate.
- Assign areas of focus for your Interviewing Team so that questions aren’t redundant and everyone is maximizing their time away from their day to day responsibilities.
- Encourage everyone to establish their estimated time to spend on each section of questioning.
- Refresh your memory regarding the sequence and wording of questions to ensure a smoother interview.
- Remind everyone to never, ever write on a resume.
4. Setting the Stage for an Effective Interview once you’re Face to Face:
After a couple of minutes building rapport, let the candidate know about the expected time frame and then sell the person on being open and honest. Topgrading® suggests that you state your purpose and plan in the following way:
- Review your background, interests, and goals to see if there is a good match with the position and opportunities here
- Determine some ways to assure your smooth assimilation into your new position, should you join us
- Get some ideas regarding what you and we can do to maximize your long-range fulfillment and contributions
- Tell you more about the career opportunities we have to offer and answer any questions you have
- Understand your career history, which will be thoroughly verified in reference checks we’ll ask you to arrange with your previous managers
I had the good fortune of hearing Cameron Herold today while I am in Boston for EO’s Entrepreneurial Masters’ Program. His topic was “Leadership at 100 MPH” and a lot of the focus was on hiring with predictability and not making mistakes that really could really hurt your company.
For 2010 we’re proud to sponsor Cameron because we agree with what he teaches to Entrepreneurs and Business Leaders around the world. While I’ve heard him speak a number of times I always get a few new things each time I hear him. Here’s some quick thoughts from today that hopefully you can benefit from:
- Culture’s hard to build and easy to destroy. One of the fastest ways to destroy it is to not fire people who clearly can’t do the job they’re in. Not only that, you’re doing that “problem” employee a disservice by asking them to live on pins and needles while you’re “too chicken” to let them go.
- When you’re hiring someone new onto a team, don’t ever let your team’s “average performance” drop. More pointedly: if you’ve got 6 people on your marketing team and you’re about to hire a 7th, make sure that the person you’re hiring is at least more qualified and better than 3 or more of the existing team members to keep raising the bar.
- Ensure that you’re very clear on what your needs are when hiring and then make sure you can “smell the right person from a mile away”. Cameron used the example of going duck hunting with his grandfather as a child. Early in the morning, as the sun was coming up, small V’s of ducks would appear on the horizon and even as they were just specs a mile away Cameron’s grandfather would be able to tell whether or not they were the right ducks for them. “Nope, put your gun down” he’d say. When pressed to explain why he would clearly describe wingspan, formation of the flock and altitude. The business application isn’t a hard jump to make: it’s easy to get excited when you’re in the thrill of the hunt but you have to be very clear about what you’re hunting.
- Staying with the aforementioned parable, when Cameron was out duck hunting they’d always bring decoys to go by their blind. To an amateur, a decoy is a decoy. However, to the experienced sportsman, the use of decoys will make or break your time on the water. Choose the right decoys with the proper placement and you’ll have plenty of opportunities but choose the wrong one and you won’t attract a single target to shoot at. Business application: if you walk outside your office and look at the front door and you’re not impressed with the look, what’s an A-Player going to think? If your reception area is unattractive and your office sounds like a funeral home, how’s that 28 year-old superstar going to feel when they show up to learn more about your company culture? The morale of the story: if you’re not using the right bait, you’re going to end up eating really nasty fish or not eating at all.
- Are all of your Hiring Managers fully aware of the background that you’re looking for in team members 2 years from now? If you’re hiring for the people that your company needs TODAY, and with the scorecards of the performance targets they need to hit this month, you’re likely not attracting the A-Players who will move your company forward. Instead, they’ll be the people who will keep your company stable. Are your Hiring Managers guardians of your culture? Are they clearly aware of your company goals?
- Tread carefully during negotiations with top performers and try to avoid including profit sharing as part of their compensation plans. When you’re growing like crazy, profit-sharing can be a great bonus for people for their work but if your key players rely on profit-sharing bonuses to pay their bills and maintain their lifestyle they’ll bail as soon as the company hits any rough spots – and that’s when you’re going to need them the most. Build compensation packages that key team members feel is fair for the work that they’re doing and then have any profit-sharing programs be the cherry on top.
And lastly, Cameron shared the matrix of Jack Welch at GE used when evaluating his teams. Nicknamed “Neutron Jack” for his often rash and emotionally-devoid decisions, he was also widely regarded as one of their very best evaluators and developers of talent. In fact, Jack was the first CEO to implement executive-level Topgrading. This simple 4square was his way of slotting and categorizing talent that he already had on his team. I found it both really easy to understand/remember while also profound.
Here’s the image:
- F = FIRE THEM. NOW.
- C = COACH THEM – THERE’S STILL A CHANCE.
- H = HANDCUFF THEM. MAKE SURE THEY”RE LOCKED UP FOR THE NEXT 5 YEARS.
Tags: A-Player, A-Players, Brad Smart, hire better, hiring, hiring manager, Interview, jack welch, job description, recruit don't absorb, Retention, Scorecard, talent acquisition, Topgrading, topgrading methodology
Earlier this year, Dave shared his opinions on the 5 Steps To Motivation. We Tweeted just this past week about ensuring that you’re worrying less about Motivation as a Leader and more about De-Motivating your employees.
Below are some of Dave’s thoughts. Of note: he suggests that various people react to these in different ways. I found that doing a Communication Builder with my Sr. Team and Executive Assistant was really valuable (thanks to the suggestion of my Mentor Lois Melbourne). Knowing how each of them wants to receive information and how they want to be Praised/Critiqued was really valuable but I still have found that the #1 item on his list is the most valuable. I’ll only (personally) use #2-5 as the situation gets more dire.
“I believe that motivation is very misunderstood. You can’t motivate by being a cheerleader, nor can you motivate by reciting somebody else’s inspirational quotes. Motivation comes from within and you must find out what your people’s internal motivators are. Why are they doing this thing called selling?
The other thing that’s important to know is that everyone reacts differently to motivation and motivation takes many forms. For instance, perhaps you have some people who respond to one of these methods when trying to get them to perform:”
- Challenge them (I have a challenge for you…do you think you’re up to it?)
- Feign that you’ve lost faith in them (Tell them that you don’t think they can do it)
- Encourage them (I just know you can do this!)
- Demand that they perform (You are required to do this)
- Ultimatums (If you don’t do this you’ll be out of a job)
Tags: A-Player, A-Players, Baseline Selling, challenge, Dave Kurlan, demand, encourage, Fortune, hire better, job description, lois melbourne, lose faith, motivate, motivation, Scorecard, Twitter, ultimatum
Hanging out with Early Stage Entrepreneurs is about my favorite thing in the world to do. For the past 18 months I’ve been actively involved in EO‘s Accelerator Program which is dedicated to helping companies between $250k-$1mm grow faster and more efficiently through peer to peer learning, introductions to advisors and facilitated learning opportunities.
This morning I got the chance to share some of our best practices with the Portfolio Companies of Austin’s newest Incubator: Capital Factory. (If you’re interested, you can follow them on Twitter: @capitalfactory). I find it exhilarating to spend time with new companies and brilliant minds and I’m proud to have American Workforce be a supporter of this organization. This morning we focused on how each and every one of their companies has a chance to do things right – right from the start. None of them have started to hire employees yet but each of them has the plan to in the very near future. We talked about a number of strategies and the ways that they can make their companies attractive to top talent without having to spend a lot of money. But what I really challenged each of them to do was to analyze their Virtual Bench, build a repeatable screening process that gets to the point of what they need to find out about someone before hiring them, and thinking about the candidates’ perspectives when they are considering joining these new companies.
There were FOUR main questions that I asked them to really think about as we were wrapping up. If you’re a Business Owner, aspiring Entrepreneur or Manager, you should be thinking about these questions too:
- What is the first impression we provide to prospective A-Players when they come on-site to meet us?
- If we’re interviewing an A-Player and everyone knows it, are we willing to make our decision on the spot? If not, what else needed to happen during screening to make us comfortable and confident?
- Have we acknowledged the spouse or significant other and included them during the recruiting process? How could we?
- Are we ready to have new A-Players on our team? Can our management style challenge them so that they’ll stay and thrive in our company?
And the BONUS Question: Are we comfortable hiring people that have the potential to take our position?
Sure, Topgrading is tough to implement. But in the 2 years that I’ve been involved with it, I’ve found that it’s the questions above that impair companies and limit the effectiveness of the process more than conducting 4 hour interviews or executing on TORC. What are you doing in your company to Hire Better?
Tags: @capitalfactory, @joshuabaer, A-Player, A-Players, aspiring entrepreneur, Austin, capital factory, chris mursau, emerging entrepreneur, EO, EO Accelerator, Fame, Family, Fortune, Fun, hire better, hiring, Interview, job description, josh baer, recruit don't absorb, Recruiting, Scorecard, talent acquisition, Topgrading, topgrading methodology, TORC, Twitter, virtual bench, who the book
Just about every company’s website has a careers page where you can glean an awful lot of information about the kinds of people that a company is hiring and how much commitment they’ve put into wanting to attract (and land) the best talent. I’d like to encourage you to spend a little time today on each of the websites that I’ll list below to understand the amount of time that they’ve dedicated, the message they’re trying to portray and the people that they are hoping will be interested in their company. Each of these companies has done an exceptional job and they continue to update their content and portray their culture through this page on their site to their advantage. Enjoy!
OtherInbox: focused on giving the very best developers all the information that they need to realize how badly they want to go work there.
PricewaterhouseCoopers: the understanding that a Campus candidate is VERY different from an experienced candidate.
Boeing: catering to professionals who might otherwise be intimidated by the complexity of sorting through all of the geographic locations.
And a listing of some of the companies that, at one time, were the VERY BEST at recruiting but who have clearly shown that they don’t care about it much any more:
Trilogy: there was a time when they were able to hire anyone they wanted from the very best universities in America
GM: they’re in the news every day and even if they declare bankruptcy they won’t disappear but their Careers Page doesn’t reflect that.
Tags: A-Players, attract the best talent, Boeing, careers page, Fame, Family, Fortune, Fun, GM, hire better, hiring, job description, OtherInbox, PWC, recruit don't absorb, Recruiting, talent acquisition, Trilogy
For the past 2 years I’ve been fortunate to be involved with something called the Accelerator Program. Established by the Entrepreneurs Organization, the Accelerator Program was built around educational content focused on four key issues faced by first-stage entrepreneurs: strategic planning, sales & marketing, people and finance. Unlike Business Schools or Government Programs, the Accelerator Participants learn from actual Entrepreneurs who are running their organizations day to day and have businesses that are over $1mm in Revenue (less than 4% of companies in the US ever attain this level).
In July, my role as the CHAMPION for Central Texas (essential the Chairman of the Program here in Austin) expires. My Champion-Elect, Jeffrey Stukuls, will take over. I’ve been working hard on a transition plan and wanted to be sure that I had:
- Chosen the right person for the position
- Assessed them on the skill sets and competencies needed to be successful
- Clearly set expectations so that they knew both (a) what success meant and (b) what was expected of them
As I was going through all of this I had one of those light bulb moments of clarity. I thought, “Why not create a Top Accountabilities document like we do for our clients here at Hire Better?” In case your not familiar, the Top Accountabilities idea was established by Dr. Brad Smart in his book Topgrading.
It’s funny that this kind of idea never struck me as being a solution before but when you really think about it, when have you ever gotten something as simple as a Job Description for a Volunteer role that you had?
Because this blog post wouldn’t have that much meaning unless I showed it to you, I asked Jeffrey if he would mind if I published the document. Hope you enjoy it! Click HERE and it will open in a new window.
Tags: A-Player, A-Players, Accelerator Program, Austin, Board, Brad Smart, business school, central texas, Champion, Champion-Elect, chris mursau, competency, competency library, comptencies, Entrepreneurs, Entrepreneurs Organization, EO, first-stage entrepreneurs, Interview, Jeffrey Stukuls, job description, non-profit, revenue, Scorecard, Top Accountabilities, top accountabilities document, Topgrading, topgrading methodology, volunteer, what success means, YEO
I’ve watched a dialogue occur over the last couple of weeks between Brad Smart, the Author of Topgrading, and Bob Corlett who owns a recruiting firm in Washington DC and refers to himself as The Staffing Advisor for his Blog.
I’m genuinely concerned that by responding to the initial post of Mr. Corlett’s called, “What Exactly is a Top Performer?” Dr. Smart provided some credibility to what was written and provided an opportunity for this blog post to get some notoriety that it didn’t deserve. After reading Mr. Corlett’s rebuttal I simply can’t stay quiet.
Disclaimer: Topgrading is not a novel. Topgrading is not an easy read. Topgrading is not a page-turner. Honestly, Topgrading is about as dry as a piece of burnt toast without butter. With that being said, it’s still one of the best business books ever written.
Before I begin, I’m going to take a small tangent. The book Freakonomics sold more than 3 million copies when it was released 4 years ago. Buried within those pages was a chapter about the imperfection of the commission model for Realtors. It closely assessed the value of a Realtor’s contribution to the home selling process and found, in short, “the commission you pay your Realtor is in essence a big fat tip”.
I’ll complete my thoughts on why I’ve included this random snippet from Steven Levitt in my conclusion but I wanted to make sure I got that in on the front end to get you thinking.
On to the Open Letter…
I’d like to point out that I’m going to be jumping back and forth between both of Mr. Corlett’s posts on Topgrading (the second being his rebuttal) and his website. I’ll lead in with a direct quote as a precursor to that section to make it easy to follow.
“I freely admit that I gave up and only made it halfway through [Topgrading] (worst beach read ever).”
“I found nothing that would help my clients make better hires, short of implementing a massive, formal, top heavy initiative to learn how to conduct a Topgrading interview. And that is simply not practical when you are hiring only one or two of each kind of person.”
I’ve grouped these quotes together to try to point out a very significant element of my counter to Mr. Corlett. If you’re [Bob Corlett] positioning yourself as an expert in the world of “Results Based Hiring” and you’re choosing to bash your “competition” in a very public forum, might it make sense to actually read the entire book before making blanket judgments and heavy-handed criticisms of a process and methodology that is proven to be wildly successful when implemented properly? You’ve lambasted every CEO who shares with you that they want to hire A-Players through Topgrading after admitting that you personally have an inability to finish the foremost book on the topic. Is this at all indicative of how you screen candidates whom you are considering presenting to your clients – that is, seeing a resume that is more than a page long, making a judgment after reading their address and then choosing to wholeheartedly endorse or count an applicant out?
Here’s the thing: if you can’t find a single item in this book to help your clients make better hires I truly doubt that you even read half of it. My guess is, you got to page 63, read the section about Search Firms and Brad’s suggestions on due diligence, and stopped.
Here are some examples of things that we have implemented and have helped our clients implement as well that we learned from inside the pages of Topgrading:
1. Take the time to build Scorecards. When we know what we’re looking for and then we can show the new hire what we screened them on and what we expect of them, the likelihood of their success (in our experience) improves exponentially. Interestingly enough, Mr. Corlett, you even mention this exact idea later in your blog when you said, “Here is a strategy that will dramatically improve both your results and the quality of your life: set performance goals [and] manage your people against the results.”* My guess is that you weren’t able to get far enough into the book to read that part.
2. TORC (threat of reference checks). We always check references but not the ones that our candidates are interested in giving us. We require and only talk to previous managers and we don’t let candidates advance in the process until that is finished. Geoff Smart, Brad’s son, suggests that about 25% of the information you learn about a candidate is obtained during reference checks. I think he’s right on.
3. Create a Virtual Bench. Jack Daly, an esteemed Public Speaker and former CEO is famous for saying, “It’s called RECRUITING, not ABSORBING”. We’ve got a list of people that we’re always recruiting and talking to in the event we need to hire them due to growth or turnover at HireBetter. Our clients do too!
“In a job description you need to nail down exactly what you are looking for.”
“There is no universal set of attributes. It depends on the job.” “Most companies need a diverse mix of skills and work styles, but all with a common shared set of values.”
“Small organizations need to think hard, move fast, and make the best decisions possible with imperfect information.”
Really, I love Jack Daly. I bring him up again because I got to hear him recently and so much of it rang true. One of his favorite stories is about VISION and PLANNING. The story goes something like this:
Jack walked out of his house the other day and saw his neighbor filling his car with luggage. He was really cramming it in; filled up the trunk and then the back seat too.
Jack called out to him, “Hey, where you headed?”
“East!” his neighbor replied.
“How long you think it’s going to take you?” Jack countered.
“Quite a while, not sure really.” his neighbor shouted back.
“How much money you gonna need to get there?”
“Beats me, just hope I don’t run out!” said the neighbor.
I shared this story because I think that the next-door neighbor is a lot more like most small businesses than you could possibly imagine. Simply asking a hiring manager to write a job description when they have no experience doing it and hoping that they can “nail down exactly what they are looking for” is a lot tougher than it appears on the surface. Believing that your clients need to think hard and move fast while making decisions based on imperfect information as it relates to their hiring decisions is very, very dangerous. Not only does it adversely affect your ability to screen for the right kinds of people, it leaves your clients open to hiring based on “gut feel” and emotion instead of reality and strategy.
No, Topgrading is NOT easy. Neither is being an A-Player.
“We’ll continue…developing faster, less expensive, less cumbersome ways to help our clients consistently hire people who will drive business results”.
There was a time when we thought about touting our speed to hire or cost per hire at HireBetter. Before we learned about Topgrading we were proud of our speed. Today, the focus isn’t on speed or cost at all. Rather, we focus on helping organizations change their methodology and expectations around hiring. We know that Topgrading has been effective when (1) our clients can hire the first or second person they interview – no matter what the role because the hiring managers know what they are looking for and (2) the employees perform as expected.
When Business Owners or Hiring Managers share with me that Topgrading is or was too hard it is almost always indicative of them being ill-prepared by not knowing what they actually want to hire or too reactionary in their hiring process (e.g. only thinking about new hires when someone leaves). As previously mentioned, these companies are simply absorbing new people, not recruiting them.
“As someone who runs a search firm, I am also cognizant of the candidate perspective, which is generally not favorable toward Topgrading.”
The most significant of these challenges is something that he calls a “Need for Approval”. He describes it as, “Salespeople who have a high need for approval will avoid saying or doing the things which, in their mind, would change how the prospect feels about them. This includes asking tough questions, legitimate confrontation and the potential inability to handle rejection.”
At American Workforce we’ve actually had to screen out the Need for Approval from the people on our team who conduct interviews. Why? Our interviewers need to be able to interview with the clear understanding that it’s not their responsibility to make the candidates like them. Candidates don’t hire us – companies do. If the candidates can’t handle a company doing its due diligence and lose their temper or get easily frustrated, what does that say about how they will react under pressure in front of a client six months from now as an employee? Conducting Topgrading interviews takes focus and guts. Focus to stick with the plan and the guts to be able to ask the tough questions and not back off when someone gives a weak answer to a question because they either have something to hide or they’re too lazy to go into greater detail.
As promised, I want to finish my thought on why I included a whole paragraph about the commission structure of Realtors in the beginning of this Letter. When he really dug into it, Levitt found that Realtors aren’t really acting in the best interest of their clients. You can pretty easily figure out why when you consider the following:
-When they are selling a house their only incentive is speed, not getting the best price. They’re going to receive 3% of the sale price. To encourage a homeowner to reduce the cost of their home from $200,000 to $180,000 results in a net loss of only $600 to the realtor but they pick up a check for $5,400. The homeowner loses 10% of their value. If they [the Realtor] turn down a lowball offer and really stand up for the seller of the house, they risk not getting paid at all.
-When they are helping to buy a house, every dollar that they negotiate in savings for a buyer results in them making LESS money.
Here’s why I think this is so applicable to why nearly every recruiting company in America is denunciatory of Topgrading:
-If a company is paying a recruiter a percentage of the first year’s salary (akin to a Realtor receiving a percentage of the sale price), the ONLY incentive that recruiter has is to get someone hired quickly so they can avoid expending more than the minimum amount of effort. They are NOT incentivized to:
- ask tough questions
- conduct reference checks with past managers
- point out red flags on a resume or a career history form
-If a company is paying a recruiter to help negotiate compensation with a prospective candidate, every dollar they help the company save is costing them part of their commission.
Your recruiters should be partners with your company. Because they are truly incentivized against doing so, why should we expect any traditional recruiting firm, and especially ones like Staffing Advisors, to ever embrace the tenets of Topgrading?
Finally, Topgrading isn’t the ONLY way of recruiting and it can’t be implemented as an initiative from HR. It must be adopted wholeheartedly and with the full endorsement of every Executive inside a company. When this happens and it is implemented properly and executed on with precision, its results are staggering – no matter the size of the company.
Tags: @bobcorlett, A-Player, A-Players, ABdynamics, birthing of giants, bob corlett, bob costello, Brad Smart, build scorecards, career history form, chris mursau, conduct reference checks with past managers, Dave Kurlan, doug wick, EO Accelerator, geoff smart, high need for approval, hire A-Players through Topgrading, hire better, hiring, hiring manager, Interview, it's called recruiting not absorbing, jack daly, job description, jonathan davis, make better hires, MIT, Objective Management Group, randy street, recruit don't absorb, Recruiting, results based hiring, Scorecard, search firms, smarttopgrading, smarttopgrading blog, staffing advisor, talent acquisition, threat of reference checks, Topgrading, topgrading interview, topgrading is easy, topgrading is hard, topgrading is not easy, topgrading methodology, topgrading TORC, TORC, virtual bench, what exactly is a top performer, who, who the book