And yet, by and large, executives make poor promotion and hiring decisions.
At the most one-third of such decisions turn out right; one-third are minimally effective, and one-third are outright failures. Peter Drucker made this observation in July 1985 edition of Harvard Business Review. He goes on to add “Executives who do not make the effort to get their people decisions right do more than risk poor performance. They risk losing their organization’s respect”. His timeless words of wisdom still resonate and are relevant.
I wonder if hiring decisions have got any better now. It is said that with all the technological advancement, scientific research and learning in the past three decades our new hire success rate is 50%. This means every second hire is a wrong hire and the rate of mis-hire can be higher for roles which have no clear measurement. This begs another question. Technology advancement and the resultant plethora of tools have enhanced our ability to hire right or brought in more complexity?
Attracting and retaining the right talent is a topmost priority for CEOs today. The stakes are high and talent is truly a company’s competitive edge which makes a difference between winning and losing. When hiring is so critical for the success of an organization, shouldn’t there be a tried and tested science behind successful hiring? Unfortunately, there is no magic bullet to solve the hiring conundrum. Talent Search, Identification, Attraction, Pre-hire Assessment and On-boarding are part of the recruitment life cycle. However, they are fragmented and each step requires its own set of specific competencies to be effective. Hence It is difficult to ask a Recruiter to excel in all aspects of the process.
Let us ask again why do companies struggle to find high potential talent?
The primary reason could be the unstructured interviews as a primary source for identifying talent. Interview outcomes are usually gut feel driven. Moreover, interviews are a show of confidence, social signalling, rather than actual on the job competence. Skills that help a candidate get hired is not the same as the behaviours that keep them in the job. At best, decisions are guesses with an element of spray and pray, hoping someone clicks. Don’t forget, after all, hiring is an outcome of probability. When you don’t believe in looking for potential and just look for past track record you let go of potential talent.
How can we make better hiring decisions? if we have to find success in hiring we need to move away from playing it by the ear, move away from unstructured interviews. We should move towards using data, scientifically-backed practices which eliminate bias, identify competence and eliminate intuition in decision making. Let us explore what I think as art and science in hiring.
Science in Recruitment
Skill-based hiring is easy to measure. Now that emphasis is high on re-skilling on Learning Quotient(LQ) is an important tool to asses. Job aspirants to complete specific tasks that a job requires, for example, coding challenges for Software engineers, tool tests for CAE Engineers, business case and presentation for management jobs. These steps are considered as relatively scientific while hiring.
Structured interviews are considered as great tools to identify potential recruits. These interviews might not be pleasant but have a high success rate of 60% compared to 30% for unstructured interviews. After a thorough job analysis, well-trained interviewers ask a set of planned, rigorous, behavioural, situational, objective job relevant interview questions. They have a scoring guide to make sure their interview ratings are benchmarked in a scientific way.
Over 70% of employers use some form of pre-hire assessment. Psychometric tests aren’t new & the science behind it dates over 100 years. It gained popularity and were used in the 1940s and now are online which can be completed in less than an hour which is reasonably reliable and valid. These tests are administered to measure a combination of cognitive ability, emotional functioning, personality, interests and behaviours. They could be specifically designed for a specific type of industry, job or skill. This could be a tool used to overcome our biases and blind spots. Gamification has gained popularity and these results could be used for the development of talent. For Leadership roles, there are Assessment Centers which assess leadership skills, presentation, drive, personal impact, which are highly effective.
As creepy as it may sound, Video interviews are using AI to identify personality from verbal and non-verbal behaviours. Trained interviewers can accurately identify as well but the difference is that AI can scale and can be automated. Companies are already using this to assess candidates on a large scale. Soon AI could be an essential tool in assisting in hiring decisions.
According to research, candidates who perform well in a structured interview coupled with cognitive ability tests have 82% chance to do well on the job.
Lost and Found
“It is a joy to be hidden but disaster not to be found.” – Dr.Donald Winnicott
This quote by Dr.Winnicott, who was a child psychologist aptly describes the sophisticated game of hide-and-seek. Top talent today really hides and still wants to be found. They need to be wooed, engaged, persuaded and a subtle influencing that gets talent to the discussion table. It takes skill and tact to play the role of an advisor and negotiator to run the race together and see it through the hiring finish line.
Next time when someone asks me, “Is Hiring an art or science”, I would say, “it is not an exact science. Hiring is a sophisticated art. I would add that it is a science of probability and decision making which we get better with practice.