Due Diligence in Hiring: The Ultimate Timing
HOW DO YOU REALLY KNOW IF SOMEONE IS WHO YOU THINK THEY ARE?
Hiring at the executive level is about as accurate as a coin flip, and the average hiring mistake, that typically lasts anywhere from 12-18 months, ends up costing approximately 15x the base salary in hard costs, disruption, and lost opportunity?
Waiting until AFTER a decision to hire to elicit feedback about culture fit, past performance history, and personality traits, from the most relevant individuals, who have worked closest with the prospective hire and know them best, is flirting with disaster. At this point, hiring professionals are already psychologically invested in the candidate and the decision is a done deal in their minds.
A common scenario is one in which recruiters and hiring managers are so relieved to have identified someone, they often choose to turn a blind eye on diligence that can potentially reveal that an individual of choice is not the most ideal fit, especially when months have been invested in the process. If you are in this mindset, you will only hear what you want to hear.
Due diligence is often minimized or dismissed because the idea of starting the process all over again is so daunting, it’s easier to hedge on instincts so everyone can be done and move on. The sense of urgency to fill the seat trumps the diligence. This scenario can be avoided simply by taking a proactive approach to due diligence before your top tier candidate(s) come back for the final interview.
AVOIDING INSTINCTS AND INVESTING IN DILIGENCE EARLY IN THE GAME WILL OPTIMIZE HIRING MORE OF THE FULLY ENGAGED “A” PLAYERS AND MINIMIZE RISK.
I never minimize the value of good instincts, however, when it comes to hiring, diligence and timing are a critically important factor that can save all parties involved months of wasted time should the feedback from credible professionals, who know your target hire best, not exceed expectations.
When you consider the cost of hiring mistakes, which have way more of a significant ripple effect in the case of more senior hires, versus the investment of time to perform a solid due diligence check, the time invested is negligible yet this process is most often treated as a mere check-the-box.
It is my conviction that past performance is the best predictor of what someone will do in the future. When due diligence is managed properly, and this includes assigning this project to someone who has the appropriate skill to drive this process, you will obtain a clear picture of your prospective hire, learn all about their performance history, values, and further assess whether they are a good fit for your culture. Unfortunately, most hiring organizations underestimate the amount of information that can be obtained when this process is managed well, hence the diligence slips through the cracks the size of the Grand Canyon.
WHEN IS THE MOST OPTIMAL TIME TO BEGIN DUE DILIGENCE?
Once you have your eye on the top tier candidate(s) and ready to schedule them for the final round, this is the most opportune time to roll up your sleeves and drill down. This approach can prevent potential months of wasted time and energy invested interviewing an individual who’s due diligence may reveal they are disengaged or even toxic.
This approach will leave you with much more control and ease over the process, eliminating the need to settle at the end. Above all, it ensures that the person you select is more of the fully engaged “A” Player that will help drive success and profitability for your company. It has been proven that companies who achieve a mass of fully engaged employees (60-65% or higher) are 5x more successful than their disengaged competitors over a five year period.
Managing this process before the decision to hire has been made allows you the opportunity to hone in on specifics, as well as areas of potential concern hiring professionals may be sensing but are not sure. It also creates the opportunity to obtain insights that allow you to distinguish one candidate from the next, and almost always the determining factor in deciding between final candidates.
When the prospective hire is interviewing confidentially, do not allow this to stop you from lining up relevant and credible professionals from previous jobs, including direct reports, managers, and high level constituents. Individuals from the current employer can be contacted on a contingency basis should you decide to move forward with a formal offer (see previous post on “Obtaining Credible References”).
When working with an external recruiting firm, it is always wise to eliminate the element of conflict and manage this due diligence on your own or through a neutral party who has no skin in the game.
CLOSING THE LOOP
Performing this due diligence is an art that requires big vision, collaboration, well thought out interview questions around all variable for a successful hire, and plenty of emotional intelligence to elicit detailed insights from the people who know the prospective hire best. Identifying the appropriate individual to manage the process is ground zero for a successful result.
The doubled edged sword here is while companies are well aware of the ripple effect involved with costly and disruptive hiring mistakes, they don’t always have the capacity, or possibly expertise, to invest in a thoroughly strategic and proactive approach.
With a healthy and proactive due diligence process, you will increase profitability by hiring employees who are better aligned with your culture, more engaged, and more productive.