By Rob Andrews
Let’s start with some terrifying 2023 factoids from six different sources:
- 46% of all new hires fail within 18 months. Source: Leadership IQ
- 50% of all hourly employees quit or are fired within their first 6 months. Source: Humetrics
- 40-60% of new hires in management fail within 18 months. Source: Harvard Business Review
- 82% of companies miss the mark on high-potential managerial talent. Source: Gallup
- Nearly 50% of new executive hires fail within 18 months. Source: Corporate Leadership Council
- Nearly 40% of CEOs outright fail in their first 18 months. Source: Ctr. for Creative Leadership
- Only 19% of new hires can be declared unequivocal successes. Source: Ctr. for Creative Leadership
Now, consider Allen Austin’s stick rate at the two-year mark, which currently sits at 98%. It’s easy for us to track our stick rate, as we have a two-year replacement guarantee on all placements with total annual compensation above $250,000. I am not presenting our trademarked ForesightTM search process as the last word on wisdom. I am saying that continuing to do the same thing and expecting different results in return is literally the definition of insanity. Large corporations have thousands of business processes, but I doubt you’ve ever seen or heard about one with a 50% failure rate.
I have been in and around retained search for over four decades and observed many positive business trends. So many functions have improved so dramatically, that we can’t imagine the way we used to operate. Technology, for one, has dramatically improved our decision-making and enhanced the quality of our lives. Our remaining challenge is that people still come first, and we’re losing ground on the hiring front. ISM, a firm that positions itself as a thought leader in customer strategy says in its collateral that a successful transformation requires:
- People – You must have the right people in the right positions with the right playbook, aligned around purpose, mission, vision, and values to have a chance of any meaningful positive change.
- Process – The process component can be tricky, particularly if technological solutions have been preselected. As the next step, the team should build processes to facilitate the desired change.
- Technology –The technology component should be last. The order of these three components in the transformation effort is profoundly important, lest the tail begin to wag the dog.
I agree with ISM’s approach, and I believe it applies to business efficacy overall. If you don’t get the people component right, how can you expect anything else to work? Here are a few things that may be precluding you from hiring the best people for your company in 2023:
- Matching Job Descriptions and Resumes – A very bad idea is to use as a starting point poorly written job descriptions and the use of key words to find candidates with those key words embedded in their resumes. First, most job descriptions are woefully inadequate collections of attributes based on background, experience, and credentials. There is little to no mention of:
- The Opportunity – A powerful, truthful statement that explains why a top performer from your main competitor (who is head-down and happy!) would want to join your team.
- Your Culture – Almost 50% of the over 5,000 failed executive placements I have examined over the last 29 years occurred because of cultural misalignment.
- Performance Expectations – The other 50% of failures consist roughly of hires in which the candidate could not, or would not, do the job.
- Ineffective Identification – Using the “box checking” method to assemble a short list of candidates who appear to possess all the background, experience, and credential items on most job descriptions effectively eliminates many ideal candidates who:
- Align with your purpose, mission, vision, and values.
- Integrate seamlessly into your culture and add value.
- Work well within your specific environment and systems.
- Can and will deliver on your performance expectations.
- Want to join your firm and do the job for all the right reasons.
- Make a significant contribution and help you build your business.
- Inadequate Screening – Using the “business as usual” screening and interviewing process has proven to be ineffective. Consider the following thoughts to dramatically improve your hiring:
- As a starting point, look for candidates who align with your culture and performance expectations. Forget about the 75 things you think you need.
- Be flexible about where your candidates come from and allow for imperfections. Ram Charan, the world-renowned board advisor and CEO selector, says that there are four things successful boards do when selecting CEOs that unsuccessful boards don’t: consider the culture fit, examine the performance expectations, permit flexibility, and allow for imperfections. Sound familiar?
- Get crystal clear about the performance expectations. Define success up front. What will have happened in one year to have you declare your hire an unequivocal success?
- Be deliberate about your due diligence and inform your candidates. As you begin to engage candidates, advise them that you will perform complete reference checks with two superiors, two peers, and two subordinates before offers are made. In addition, advise them that the rest of your process will be rigorous and include background checks. Top performers like rigorous processes.
- Sell the opportunity, not the candidate. The power of a superbly written position description lies in the ability to stay out of the role of salesperson and in the role of facilitator. Remember that the best candidates are also interviewing you.
- Be aware of the horrible advice given to job seekers! Here are a few pieces of resoundingly bad advice given to job seekers in a recent Harvard Business Review article:
- When answering the question around your greatest strengths and weaknesses, make sure you align your answers with what is written in the job description.
- Tailor your resume to the job description and to what the hiring company says on their website about their culture and mission.
- There’s no need to guess what superstar qualities they’re looking for — it’s all there in black and white. Look for the attributes listed under the “preferred qualifications” or “required skills” section of the job description and respond to interview questions appropriately.
- The key to sharing your greatest weaknesses in an interview is not to sabotage yourself. An interviewer may remember your weakness and hold it against you — even subconsciously — so you need to limit and mitigate any potentially harmful impressions.
- Here are some additional things we do that might help you attract, engage, evaluate, and hire the right team members:
- We coach a lot of executives, many of whom are in or considering a transition. We share with these executives the hard realities of poor stick rates, poor decision making, and poor hiring practices. We encourage these executives to get crystal clear about who they are, what they stand for, and what is important to them. Once an executive in transition becomes clear on these questions, they can then seek an employer with whom their purpose and values are aligned. They can also look for opportunities that will benefit from their individual strengths and performance abilities.
- We evaluate candidates in transition based on an in-depth self-assessment that enables them to get clear about the afore mentioned items. We use a similar assessment in the ForesightTM
- We evaluate candidates in transition with an array of assessments, our favorites of which include Clifton StrengthsFinder and BluePrint Toolset. These two instruments reveal the executive’s natural strengths, which change very little over time, and their mindset, including limiting and enabling beliefs, which can and often do change over time.
- Our entire ForesightTM process is engineered to facilitate matches that work and last. Please feel free to borrow, as we have from best practices over 29 years, as many principles as you would like.
I sincerely hope this material has been helpful, and I will leave you with a final thought. We work with clients on their human capital practices, beginning with their employment brand. A powerful and highly differentiated employment brand emanates from a firm’s purpose, mission, vision, and values. Firms with powerful brands have options. They have a constant stream of candidates lined up at the door wanting to work for them. Give us a call, and let’s discuss your hiring practices.