Delivering the Systems and Expertise You Need to Confidently Make Great Hiring Decisions
I’m always hunting for ways hiring managers to more accurately determine who to hire that DON’T involve the requirement of being a better interviewer. In the past I’ve suggested that you should look at obvious traits like obesity and smoking addictions. I recommended that you look at the credit history of someone to determine if they know how to stay true to their word.
With that in mind, I found the most interesting article the other day about the Ivy League Advantage. It was the summary of work completed by a young Sociologist from Northwestern’s Kellogg School of Management. She concluded, “Plus ça change, plus c’est la même chose”. Here are some of the highlights:
- “Elite professional service employers” rely more on academic pedigree than any other factor. For recruiters, it’s prestige that counts, rather than “content” like grades, courses, internships, or other actual performance. That’s because if you got into a “super-elite” school — which essentially means Harvard, Yale, Princeton, Wharton (University of Pennsylvania), and Stanford — you must be smart.
- Why spend effort looking for “that one needle in the haystack” at a “safety school” like the University of Michigan or, heavens forfend, Bowling Green, when the run-of-the-mill Yalie’s still a prince. Even “second-tier” Ivies like Brown, according to Rivera, are suspect for the top firms.
- While going to a super-elite gets your penny loafer in the door, that isn’t enough. Rivera says it’s leisure pursuits that seal the deal. Employers use these as “valid markers” or “proxies” of a candidate’s “social and moral worth,” all the more so for time-intensive sports that “resonate with white, upper-middle-class culture.” Think lacrosse, squash, crew, and field hockey. Skip football, basketball, and soccer. And no sport at all suggests “nerd,” which correlates to future “corporate drone.”
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.
Conor Neill, a close friend of mine and a prominent Entrepreneur in Spain, wrote this short story below for the Entrepreneurs’ Organization’s blog. It’s a great reminder of just how important attitude is in hiring.
Two men, Bill and Frank, begin working at a hotel the same day. They are intelligent, educated and ambitious. The manager of the hotel greets them and hands them both doorman uniforms. They are to begin opening and closing the doors, helping with bags, flagging taxis, etc.
Bill thinks “Doorman? I am worth more than this! I could manage this hotel better than the current guy.” But he doesn’t have an alternative offer and he needs the money, so he does the job anyway. He maintains a pained grimace on his face and deals with customers and other staff in a negative way because he is “better than this.”
Frank, in contrast, thinks “Okay, doorman. It’s not what I had in mind, but hey, I get to spend some time outside, get to meet the customers, and I’ll learn about how this hotel works.” He sets to work with a smile on his face and finds that he quite enjoys the small challenges he faces as a doorman at such a prestigious hotel.
After six weeks, a position at the front desk opens up, and the hotel manager immediately thinks of Frank. Frank is promoted and immediately brings his positive attitude to the front desk of the hotel. Several years later, Frank is the hotel manager. He leaves late one evening and there, opening the door with a hard-wired grimace, is Bill.
Is it luck, or is it fate? Bill will spend forever in a job that he hates and Frank will love every job that he is given. This story is such an inspiration, because it encourages me to always stay positive about my responsibilities and to find the reward in every remedial task. When hiring staff I spend more time exploring attitude and self-motivation than I do exploring capabilities. I also spend time looking to direct my employees toward challenges that are motivating for them.
When it comes to running a business, I’ve learned it’s not just about the results, but the work you put in. That’s where successful people thrive.
The story told of Icarus was his attempt to escape from Crete by means of wings that his father constructed from feathers and wax. He ignored instructions not to fly too close to the sun, and the melting wax caused him to fall to his death.
What in the world does this have to do with making better hiring decisions?
Simple: in order for Icarus’s wings to melt there had to be a sun. And in hiring, the sun means a lot more than you can possibly imagine.
I grew up in the Northeast (AuSable Chasm to be specific). Summers were exceptional! We had long days where the weather hovered around 80 degrees and the sun wouldn’t set until about 9pm. My sisters and I would play for hours in the river behind our house. I’d compete in baseball games that would start at 6 and end at 8:30 but there was never any need for the fields to be lit because the sun hadn’t set yet. The way I’m describing it you’re probably thinking to yourself, “that sounds like paradise.” For those couple of months a year, it was.
But with every ray of light there’s usually a dark tunnel.
For us, that was winter. It was dark when we woke up, dark when we got on the school bus and then dark again when we got out of school around 5pm. We’d literally never see the sun except through some windows as we walked from classroom to classroom. Add to that it was often so cold and overcast that you couldn’t go outside anyway. This kind of environment became oppressive to a lot of people (my Dad, for one). It wasn’t until just 25 years ago that people started recognizing what was happening. Wikipedia has this to say:
Seasonal affective disorder (SAD), also known as winter depression, winter blues, summer depression or summer blues, is a mood disorder in which people who have normal mental health throughout most of the year experience depressive symptoms in the winter or summer, spring or autumn, repeatedly, year after year.
Once regarded skeptically by the experts, seasonal affective disorder is now well established. Epidemiological studies estimate that its prevalence in the adult population of the US ranges from 1.4 percent (Florida) to 9.7 percent (New Hampshire).
The US National Library of Medicine notes that “some people experience a serious mood change when the seasons change. They may sleep too much, have little energy, and may also feel depressed. Though symptoms can be severe, they usually clear up.” The condition in the summer is often referred to as reverse seasonal affective disorder, and can also include heightened anxiety.
How can this knowledge help you as a Leader and Hiring Manager? Simple: Behavioral-based interviewing, when conducted properly, means you should avoid questions that allow someone to answer with their opinions. Whether or not someone has lived and thrived in “the North” or “the South” before should absolutely be part of your interviewing process. Just because someone says they’ve “Always dreamed of living in Seattle because they’ve heard great things” doesn’t mean they’ll be able to survive the lack of sun. The same goes for Austin – the summers are brutal and we don’t go outside much at all from late June until early September.
SAD is real. Accept that and use the knowledge to your advantage when making a critical hiring decision that will involve moving someone from one latitude to another.
On February 9th, 2011 I began this series on Discrimination with some thoughts on the reduced productivity of smokers.
I also started the conversation with this:
What I’m hearing from Business Leaders all over the United States is, “I want to hire US workers but their costs are too high for me if I end up hiring people who aren’t productive enough.”
During the course of this series on Discrimination I’m going to say some things you won’t agree with, may take offense with and that will border on legality. However, until employers ARE allowed to “discriminate” based on these things, the value of the US Worker will continue to decline (on average) and the fiduciary pressure to hire off-shore talent will be greater.
If I haven’t scared you away yet, here’s the next installment:
About a month ago the Comptroller of the State of Texas tallied the business costs of obesity. This is what they said, “Obesity is expensive for Texas employers, costing them $9.5 billion a year in worker health costs, absences, disability and reduced productivity.”
That number is nearly 3 times what the same office calculated it to be in 2007.
The report, Gaining Costs, Losing Time, estimates that Texas employers paid $4 billion in direct health insurance costs in 2009. Indirect costs included $1.6 billion for obesity-related work absences, $3.5 billion for reduced productivity of obese workers, and $328.1 million for disabilities linked to obesity.
$3.5 BILLION for reduced productivity in Texas alone.
In 2006, Leade Health published a report entitled The Business Case for Weight/Obesity Management Using Health Coaching Interventions.
They called Obesity “The Number One Factor in Productivity Loss”. The paper goes on to cite the following statistics:
- Medical costs for obese employees are 77 percent higher than for healthy weight employees; obesity-related disabilities cost employers up to $8,720 per claimant.
- Obese workers have the highest prevalence of work limitations, with 6.9 percent experiencing such limitations compared to three percent among normal weight workers.
- Obesity is estimated to account for 43% of all health care spending by U.S. businesses on coronary heart disease, type 2 diabetes, hypertension, hypercholesterolemia, stroke, gallbladder disease, osteoarthritis of the knee, and endometrial cancer combined.
Lastly, in August 2010 the Brookings Institute released a report that went even further than most people have ever been willing to go. It’s called Economic Impact of Obesity in US and it includes results like:
- There is a positive and statistically significant correlation between obesity and measures of absenteeism. Specifically, at a North American division of Shell Oil Company, 3.73 additional days of work were lost per year for each obese employee relative to their normal-weight co-workers.
- A similar report referenced in this same white paper was able to prove that employees considered at risk for obesity were 1.23 times more likely to be in the ‘high-absenteeism’ group than those who were not. That author (Durden) showed that obese workers were 194% more likely to use paid time off than their counterparts.
- In conclusion, the report found that the productivity losses to Shell Oil Company alone due to absenteeism effects of obesity were worth $11.2 million per year. This amount includes only the direct productivity costs of absenteeism (that the employee is paid while not at work); it does not account for any secondary effects on training, morale, or other network effects.
In closing and in defense of discrimination (especially based on the above facts): it is my opinion that obese workers should absolutely be considered inferior to their non-obese counterpart if the skill sets are on an equal level.
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
[Author's Note: at no time during this series centering on Discrimination will I ever suggest or condone discrimination of anyone based on race, gender, nationality, religion, etc, etc.]
On February 7th, 2011, President Obama spoke to the Chamber of Commerce. One of the statements that he made in that speech was
“I understand the challenges you face. I understand that you’re under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders. I get it. But as we work with you to make America a better place to do business, ask yourselves what you can do for America. Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation. That’s what I want to talk about today – the responsibilities we all have to secure the future we all share.”
What I’m hearing from Business Leaders all over the United States is, “I want to hire US workers but their costs are too high for me if I end up hiring people who aren’t productive enough.”
During the course of this series on Discrimination I’m going to say some things you won’t agree with, may take offense with and that will border on legality. However, until employers ARE allowed to “discriminate” based on these things, the value of the US Worker will continue to decline (on average) and the fiduciary pressure to hire off-shore talent will be greater. I’ve chosen to focus my efforts on the characteristics of American Workers that reduce PRODUCTIVITY.
Part 1: SMOKING
Maryland-based Scotts Miracle-Gro, in March 2006, issued a new policy stating that they will not hire people who smoke on or off the job, and will seek to eliminate smoking in its existing work force.
Shortly after that they were sued for wrongful termination after a recently hired worker (Rodrigues) tested positive for nicotine. He had been on the job for 2 weeks. In December 2009 Scotts won the legal battle (in Massachusetts, no less).
Rodrigues’s lawyer, Harvey A. Schwartz of Boston, said he is appealing the ruling to the US Court of Appeals for the First Circuit. He characterized the firing as an extraordinary example of a company meddling in an employee’s private life in an attempt to promote healthy habits and drive down an employer’s healthcare costs.
Scotts was on the very bleeding edge of a new movement by employers to “discriminate” in the application process by making smoking an automatic disqualifier.
What justification did Scotts have for putting a ban like this in place?
- In Germany they were able to prove that healthcare costs for smokers was nearly 4x that of non-smokers and that costs due to work-loss days for smokers was over $16.4 billion DEM
- Tobacco Control, an international peer review journal that studies the impact of smoking determined that, “Current smokers had significantly greater absenteeism than did never smokers, with former smokers having intermediate values; among former smok-ers, absenteeism showed a significant decline with years following cessation. Former smokers showed an increase in seven of 10 objective productivity measures as compared to current smokers, with a mean increase of 4.5%. While objective productivity measures for former smokers decreased compared to measures for current smokers during the first year following cessation, values for former smokers were greater than those for current smokers by 1–4 years following cessation. Subjective assessments of “productivity evaluation by others” and “personal life satisfaction” showed significant trends with highest values for never smokers, lowest for current smokers, and intermediate for former smokers.
- LiveStrong’s studies have shown that smoking lowers the health of your body, which can lead to being sick more often — in fact, according to the Americans for Nonsmokers’ Rights, smokers miss an average of 6.16 days of work each year due to sickness. Nonsmokers, by comparison, miss an average of 3.86 days. In addition, 1.24 percent of smokers were admitted to hospitals due to their sicknesses, compared to 0.76 percent of nonsmokers, and the average length of stay for smokers was 1.44 days longer than nonsmokers, which contributes to time away from work.
- According to the U.S. Centers for Disease Control and Prevention, smoking and secondhand smoke cost an estimated $92 billion dollars annually to businesses in the United States. This works out to an estimated $3,391 dollars lost in productivity to each smoking worker, which is divided up into amounts of $1,760 lost in direct workplace productivity and $1,623 lost in costs related to medical expenditures. What’s more, nonsmokers can be affected by secondhand smoke — their costs can reach $490 per affecting smoker each year.
In closing and in defense of discrimination (especially based on the above facts): it is my opinion that smokers should absolutely be considered inferior to non-smokers if the skill sets are on an equal level. If America is going to become competitive again in the global marketplace, employers shouldn’t be scared of discriminating based on this vice of prospective employees.
In case you haven’t noticed, the hiring freeze that seemed to overtake the our nation over the last 14 months is thawing, just in time for Spring.
Here are a few of the articles that I’ve noticed in the past few days that suggest it’s time for you to pay attention and get your act together because it’s going to be time for you to start RECRUITING instead of ABSORBING…soon.
- Upstaged by Younger Rivals, Google aims to Get Hip again [LINK]
- Demand for Programmers has returned and Start-Ups are out of luck [LINK]
- Microsoft is spending 10x that of Apple to Recruit and still struggles [LINK]
- There are more than 1,000 Job Postings with the word “Java” in them on Monster [LINK]
- The same keyword results in >8,000 on CareerBuilder [LINK]
The next BLS survey isn’t due until February 4, 2011 but the statistics will continue to hold true, while there is a nationwide unemployment rate of between 9-10%, the unemployment rate for college graduates is around 5% and about 2% for married college graduates.
It’s time to get your game faces on or you’re going to be forced into hiring people in the very bottom of the barrel.
And if you haven’t checked it out GlassDoor yet, you should. Your current and former employees are talking.
You’ve been warned.
Last week Major League Baseball was rocked by an incredible story that screamed “Blog About Me!”. Cliff Lee, an 8 year veteran pitcher who’s had the chance to play in Cleveland, Philadelphia, Seattle and Texas, was the most sought after free agent of the off-season. The Rangers, who had his services for a mere 15 starts (plus the post-season) were so enamored with him that they attempted to “break the bank” to keep him in Texas. The Yankees, who have more money than any other team and like to throw that money around, offered him the second most lucrative contract for any pitcher in the history of the league (second only to their other starter, C.C. Sabathia). Lots of other teams had visions of sugarplums as well thinking that they had a chance.
In the end, Cliff Lee shocked everyone and returned to Philadelphia. A “dark horse” that didn’t even show up on the radars of any of the sports writers, Lee accepted LESS money ($50mm less to be exact, from the Yankees) to come back and play with the teammates that he really liked.
“You can definitely sense the fact that these guys step up and are up for a challenge and rise to the occasion and come up big when they need to,” Lee said before the 2009 World Series. “It’s not just one or two guys, it’s everybody. It’s a special team. To win the World Series (in 2008) and be back just proves that fact. There’s a lot of confidence here. Everyone expects to be successful.”
His former (and now current) teammate Raul Ibanez did a nice job of reinforcing what Lee was saying:
“We have a bunch of guys who are not concerned with getting attention,” Ibanez said. “They just want to win and they don’t care if they get the credit for it. It’s amazing what you can accomplish when you have that mind-set, and that’s not by accident.
No one doubts that Cliff Lee is a special, special talent. What else can you deduce when a single guy shows up and changes a team’s entire track record? Some examples:
- In 2008 Cliff arrives in Philadelphia and they win their first Championship since 1983. They returned to the World Series in 2009.
- In 2010, after a mid-season trade, he arrives in Arlington and helps the Rangers reach their first World Series in Team History.
What can you learn from Cliff Lee, Philadelphia, Baseball and the Yankees? Culture really does make a difference. Below, I’ve included a video (one of many) that were created by people who LOVE this guy and are so excited to have him back in Philly – quite a different story from a place like NYC where the money’s great but the egos are huge, the spotlight is brighter and the pressure is exponentially stronger.
One other thought: Jack Daly shared with me that people who make a Career Change typically regret their decision twice in the first 30 days of being in the new role. If you had someone great who left your organization recently for more money or for more spotlight, you might consider calling them and taking them to lunch just to catch up. You just might be surprised how many times the grass wasn’t greener for them on the other side of the fence and, with just a bit of urging, they’d happily come back.
Author’s Note: The song that accompanies this video is explicit – and I’m not going to apologize.
Derek Jeter is one of the most well-known and well-respected players in all of Major League Baseball. This year, at the age of 36, his contract is up for renewal. As the Captain of the Yankees, many fans expected the Front Office to give him whatever he wanted so that he could finish out his Hall of Fame career in pinstripes.
But there’s a fly in the ointment: the Front Office does want to keep Jeter but Derek’s Agent is suggesting that he be paid $23-25mm per year for the next 5 years. His agent has said that Jeter can’t be valued the same way as other shortstops because of his leadership qualities. Why is that a problem?
- A Player is “in their prime” between the ages of 29-32. They’ve got more maturity, they understand how to keep their bodies healthy through 162+ games and they have enough youth still in them to match up against the strength of a 25 year old.
- There are only a handful of players making over $20mm per year – the list gets even smaller when you add the filter of being 36 years old or older. Oh, and the stats of Derek don’t come close to matching those of the players who are at this altitude.
- The 2nd highest paid shortstop in the Major Leagues is Hanley Ramirez who is 10 years younger, hit 30 points higher and hit 21 home runs to Jeter’s 10.
How does this situation possibly impact you?
More and more I’m seeing Business Leaders who are making what I believe to be a major mistake: they’re hiring people who are currently unemployed and offering them significantly less than what they were previously making. They Leaders are feeling quite proud of themselves because people are accepting the positions. Karl Scheible is a close friend of mine and a Sales Guru. For years he’s pounded into my head that people make decisions for 2 reasons:
- To run TOWARDS pleasure
- To run AWAY from pain
The pain of unemployment is more prevalent than the pleasure of waiting for the perfect role for many people today. Here my words of caution to the people hiring the unemployed at drastically reduced rates from 12, 18 or 24 months ago: THEY WON’T STICK. Why? Because people place a perceived value on themselves that is based on both reality (their top pay throughout their career) and their distorted sense of what they think the market should pay them. As an employer, if you’re not within 10% of what they have previously earned, I don’t think they’re going to hang around because we live in a hedonic society that encourages us to live beyond our means. If that new employee is accepting a 20% pay cut, it’s unlikely they’re going to be able to reduce their lifestyle costs by that same amount. They’ll live in pain and will want to run away from it the second they believe the economy has turned around or someone calls them and offers them even $1,000 more per year to change jobs. Don’t believe me? Check out this survey that was conducted 14 months ago (and the trend is going up). It suggests that 67% of people will look for a new position as soon as they think the market shows interest in their skills.
Bottom Line: While you may think that someone is only worth $X, if that person has earned $Y before and takes your job, expect them to be gone within 18 months or less.