Hiring the right people will eventually contribute
to the overall success of a business. On the other hand, a bad employee has the
potential to cost you thousands of dollars.
"The single most important
driver of organizational performance and individual managerial success is human
capital, or talent," says Bradford Smart, author of the book, "Topgrading: The Proven Hiring And Promoting Method That
Turbocharges Company Performance" and president of Smart &
Associates.
His recruiting firm, Smart & Associates,
Inc., utilizes a method of hiring called "Topgrading."
In his book, Smart says
that only 25 percent of hires are considered top performers, but business
owners can increase that number to 90 percent by following his Topgrading
methods, which have been mentioned in the Wall Street Journal, CNBC,
Fortune magazine, and more.
Here a few of his tips on hiring:
Calculate your successful hires and
cost of mis-hires. Smart advises business owners to
be as meticulous and calculating with new hires as they are with equipment and
technology. “For a piece of equipment costing $500,000, we’re disciplined in
calculating ROIs, doing comparative shopping and planning installation,"
he says. Companies should proceed to hire with the same caution.
To aid business owners in measuring
the success and mis-hires rate of employees, Smart devised four online calculators: the hiring success
calculator (calculates percentage of high performers hired and promoted); the
talent projection calculator (calculates the number of people you'll have to
hire and fire in order to achieve a 90 percent success rate); the mis-hires
calculator (calculates your typical cost of mis-hires, and your typical number
of hours sweeping up after mis-hire); and the organizational cost of mis-hires
(calculates how much it will cost you to replace underperformers with your
current methods versus Topgrading methods).
Create a vivid job description. The job description in an ad determines the type of people
it attracts. Hiring managers should put in the extra time to make the
description as vivid as possible.
"Job descriptions are so vague
that hiring managers and others who will be affected aren't really clear about
what they are hiring someone to do and candidates are equally confused, hoping
to figure it out once they're on the job. Avoidable, costly mis-hires are the
result."
According to Smart, the staff at
Smart & Associates often get job descriptions from hiring managers that are
so vague, they have to call the client to clarify the duties associated with
the job.
Recruit from your networks and have
connectors. "The advantage of recruiting
from your networks is that it is faster (pick up the phone, email, use your
social media), better (because you know the people to be high performers), and
cheaper than running ads or using recruiters (no fees)," says Smart.
Aside from having a network of A
players you've worked with, Smart recommends having a separate network of
people called connectors. "Connectors are people who know A players they
can refer. We recommend that every manager build and maintain a list of 20+ A
players and 10+ connectors — people who are not suitable for your business, but
who know a lot of high-performers you might hire. This connector group can
include retirees who stay in touch with lots of talented people, vendors with
an eye for talent, professional associates, and former peers who know lots of
As."
Avoid generic competency questions. Smart considers the face-to-face interview to be the
weakest step in the hiring process. "Competency interviews fail because a
typical competency question is, 'Pat, can you give me an example of when you
had a lot of passion for your work?' Of course anyone can come up with an
example and anyone can claim more passion than exists."
Smart once met a senior manager at a
recruiting firm who coached candidates on how to successfully oversell
themselves and lie during the interview process.
For this reason, he believes the key
during the competency interview is to not allow the candidate to "put [one's]
best foot forward." Smart suggests asking questions that show initiative.
For example, "What actions would you take in the first few weeks, should
you join our organization?"
Have the candidate set up a
reference call. This method is done using what
Smart refers to as the TORC (threat of reference), which involves arranging for
the candidate to set up the reference call between the hiring manager and the
previous employer or referral.
"This 'threat of reference
check' scares C players away," says Smart. "C players can't get their
former bosses to talk to you and C players wouldn't want their former bosses to
talk to you anyway. Decades of experience confirm that high performers do
get their bosses to talk and are happy to make the arrangement." Smart
advises recruiters to remind candidates throughout every step of the hiring
process that they will be the ones to set up the reference call between the two
parties.