photo by dbking
Hiring is a headache.
Dr. John Sullivan’s latest post at ERE pulls together a ton of shocking numbers that should convince you we need to find a better way.
50% new executive turnover — nearly half of new executive hires quit or are fired within the first 18 months at a new employer (Source: Corporate Leadership Council).
50% of the processes users (both managers and new hires) later regret their “buying” decision (Source: The Recruiting Roundtable). In addition, 25% of new hires later regret taking their new job within one year (Source: Challenger, Gray)
66% regret hiring decisions — Nearly two-thirds of hiring managers come to regret their interview-based hiring decisions (Source: DDI)
Hiring and retaining below or even average performers have real opportunity costs because top performers can increase productivity, revenue, and profit by between 40% and 67% over average performers (Source: McKinsey & Co.)
Only a 19% success rate — only one out of five of the process output can be classified as unequivocal successes (Source: Leadership IQ).
Basically, we’re not good at hiring, we regret most of the decisions we make, there’s a big difference in contribution between average and good people and the people we hire are often unhappy we choose them. That’s pretty damning.
A good hire requires finding someone with the skills to do the job AND the right person who can thrive in your company’s work environment. Our guts don’t adequately assess the latter because inevitably we revert to deciding whether the candidate is one we can imagine having a beer with after work.
Again, why we created RoundPegg. RoundPegg will objectively and rigorously identify which candidates will function best with your company’s culture, with the work team and the hiring manager. We just released the first version of the application. If you’d like to learn more please drop us a line at employers [at] roundpegg [dot] com.
photo by antkriz
Dueling philosophies on hiring and employee retention at the latest Web2.0 conference (via WSJ Blog).
Mark Zuckerberg touted the Facebook culture of hiring entrepreneurially inclined people who burn brilliantly and then fade away (presumably of their own volition). Tony Hsieh of Zappos provided the counter philosophy of finding the folks who fit the culture and aspire to stick with the company for 10 years or more.
Who is right?
Both. The key that makes both of them right is that everyone is aware of the culture. Each CEO knows exactly what they’re looking for and how to identify it. Success is achieved by aligning the culture/working philosophy and getting everyone pulling in the same direction.
Corporate success comes from recognizing what you want to achieve and defining the culture accordingly.
Facebook is about changing our relationship with each other and the Internet. Thus, they need people who can conceptualize a radically different world and execute to get everyone there.
Meanwhile, Zappos is about customer service. So it makes sense that Zappos creates a very cultivative company. How employees are treated is how they’ll in turn treat customers.
There aren’t necessarily good or bad cultures. But there are good or bad cultures for you.
The ability to explicitly describe what each company is looking for enables people to opt-in or out of the application process. And that same explicitness enables everyone hiring at the company to hold all applicants up to the same light and identify the ones who will be successful by honoring the company’s philosophy.
Unfortunately, most companies can’t state their cultural philosophy as passionately or clearly as Zuckerberg and Hsieh. And, it’s not much of a surprise there aren’t many companies doing as well as these two either.
photo by photomish dan
A sobering article from the Economist illustrates how unhappy people currently are with their jobs. When the economy turns expect to see a massive surge in voluntary turnover. The article included some alarming numbers from the US-based Center for Work-Life Policy:
Between June 2007 and December 2008 the proportion of employees who professed loyalty to their employers slumped from 95% to 39%; the number voicing trust in them fell from 79% to 22%.
Employers have the upper hand these days, but what good is that if nobody is willing to bring their best? Quality work doesn’t flow from mistrust.
The employment process is a two-way street. Employers need to get quality ideas and execution. The employees, however, are trickier. They all need something different. Each is motivated differently, has different goals and needs to be communicated with in a certain manner.
There is no magic bullet to engaging people except by taking the time to know what makes them tick. Clearly, these economic times are tough. And companies are taking the opportunity to pare back and let loose the dead wood.
This requires doubling down on the efforts to learn about the others in order to make sure they don’t all check out as well.
Better yet, build this into your process. Don’t wait for dire economic times to trim the workforce. Frankly, people who aren’t engaged and aren’t fitting in with the culture are a drag on your time and bring others down with them.
Start with who you hire and remember it.
Times are dire. Not just for the unemployed, but for the employers as well.
The job market is far more fluid these days and once companies start hiring again we’re guaranteed to see that fluidity in action. Protect your most valuable assets and get the most out of them as you can.
photo by phineas h
Interviewing is hard enough.
But, last week I had a great meeting with a forward-thinking, culturally aware Corporate Development officer. He was touting the benefits of re-interviewing.
Put simply, it’s the company taking an active interest in the employee’s career development.
It’s something he does every 4-6 months. And its purpose is to probe into whether people are getting what they need out of their job. Whether they are heading in the right direction. Whether there is anything that is preventing them from fully engaging in their job.
The cynic will say that it’s the company trying to extract more blood from the turnip. And there is some of that. But ultimately, the employment relationship is just that…a relationship. You have to give in order to get.
By inserting himself into the individual’s career management process, he learns what they want out of the job and can help deliver upon that. How else does the company know what buttons to push in order to properly motivate? (Hint: money isn’t usually it.)
To illustrate he told me the story of someone in the Corporate Development realm (aka HR) who really wanted to be an accountant. She had been taking classes at night and had recently completed her certification. While there wasn’t a position open, he was able to get her involved in projects with the AP/AR groups.
She was still expected to fulfill her duties in the HR space, but she eagerly took on the additional work because it was what she really wanted to do and because the company (and one individual in particular) was willing to take the time to understand what she needed to get.
A role may not open up and she may have to leave in six-months in order to find full-time accounting work. But the alternative was losing her outright now and getting less out of her while she ’secretly’ sought a new job.
It was an important arrow in his quiver to be able to better understand his team. And a practice that motivates and engages his team. If people are a good fit with your company’s values then moving them to a different seat on the bus is a no-brainer. It builds goodwill and the sense of reciprocity fiercely kicks in. These people become far more likely to go the extra mile that will make a difference to your business.
He made a few additional points that are worth sharing:
Do you do something similar? What works/doesn’t?
photo by AMagill
Neil Davidson at Red Gate Software had a great post the other day on their new approach to compensating salespeople. In sum, they’ve stopped assuming salespeople are only motivated by money and have begun compensating them like everyone else.
Not only has this cut down on the time it takes to manage the process, but it has eliminated unintended, but perverse, incentives and helped to align their sales team with the rest of organization.
As Neil’s post mentions, fear is not a good motivator. And as I noted a few weeks ago, neither are extrinsic rewards.
Sales people aren’t all that different from everyone else in your organization in that they have values which motivate them and they have professional goals they want to achieve.
In many cases, the exorbitant rewards that come with the ‘eat what you kill’ mentality are a stand-in for something else. Recognition. Though they work outside of the company’s walls more than others they want to be a part of a team and be recognized for doing a great job.
With apologies to Adam Smith, that is human nature.
We’ve boiled recognition down to money because it’s the easiest thing to do. Rarely is it not valued. But it’s typically not what is most valued.
When rewards (for anyone) come in the form of legal tender then you’re bound to lose them to a higher bidder when one inevitably comes along. You wind up attracting mercenaries when you really want people who are dedicated, engaged and work well with others.
So let’s stop taking shortcuts to motivate our employees. Money is nice, but most people just want to know that they are being fairly compensated and that when they do a good job that they will be recognized in a way that is meaningful to them.
It’s a lot cheaper and a lot more effective to try to identify people’s goals and then align the rewards to help meet them.
While I don’t know if Red Gate’s approach will work, I’d like to believe it will. It just feels right. I would love to read a follow up post on how this works out in another several months once the existing sales pipeline has been turned over.
What are you thoughts? Will it work?
Copyright ©2008-2009 RoundPegg Inc.