Top Leaders Share Brilliant Strategy for Smart Hiring
According to a 2015 Conference Board CEO Study, raising employee engagement has become one of the highest priorities for organizations all around the globe. Seven out of ten people in the American workforce today are not engaged in their work.
The numbers are truly staggering. However, it is more staggering that, in spite of this data, corporate leaders are not jumping through hoops to try to fully understand not only what it takes to drive and sustain employee engagement but also to improve success.
It’s All About The People
A successful company knows how to attract, secure and engage the right people. After all, it is the employees who are responsible for a company’s success and the employees who make it great…or not so great.
Create a Culture that Shows People You Care
It is the role and responsibility of a true leader to institute a culture that shows people they are valued, respected, appreciated, and, most importantly, cared for. This is the greatest motivator of people and establishing this type of culture, on an intentional basis, is more of a driver of employee engagement than compensation or other perks.
This type of leadership will not only provide a competitive advantage on the talent acquisition front, it will also ensure sustainable success for the organization.
SAS and Quicken Loans are two perfect examples of a culture that exemplify full-blown employee engagement, and Jim Goodnight and Dan Gilbert, respectively, are two of the finest leaders in business today. They have intentionally invested in the well-being of their employees, and the love has been reciprocated fantastically. In fact, Fortune magazine has ranked SAS and Quicken Loans among the Top 30 Best Places to Work in America for 11 consecutive years.
Selecting the Right Managers and Hiring with Purpose is a Winning Combination for Driving Employee Engagement
The best managers understand that their success and that of the organization relies on employees’ achievements. Great managers care about their team’s success. They seek to understand each person’s strengths, ideas and opinions and empower each employee to use them at work. It takes talent to be a great manager and selecting people who have this talent is essential to creating a successful business.
When you recruit and hire individual contributors for jobs that not only align with their strengths, but those they enjoy doing, it goes hand-in-hand with the larger purpose and greater good of the organization. It is important to keep these two factors in mind when selecting talent to achieve the maximum result. People feel satisfied and fulfilled in their work when they’re passionate about what they’re doing, have a sense of purpose, and know that you care about them. When this is accomplished, the reward is abundant for all involved, and engagement flows naturally.
It is extremely difficult to engage individuals who are fundamentally unhappy in their work. Sometimes leaders and hiring managers feel desperate to get someone in the seat, and they don’t always consider whether the candidate is a good fit for the culture, has a real passion for the job, and whether they’ll be able to put their heart into their work. This scenario is one of the top contributing factors of hiring mistakes.
Past performance is the best predictor of future performance. Therefore, this is the time where the investment of due diligence will be the best preventative measure in scrutinizing and validating hiring decisions. This will minimize costly mistakes and optimize success.
Quantifying the True Cost of Hiring Mistakes
The Chairman of Yahoo!, Maynard Webb, recently published an article titled “Managers Typically Only Make a Few Hires a Year. Here’s How to Make Them Count.” In this article, Maynard made reference to the cost of an average hiring blunder, using an example of an employee earning $100k annually. Maynard said the average hiring mistake costs roughly 15x an employee’s base salary in hard costs and productivity loss. In this scenario, that’s a $1.5M price tag on one hiring mistake. Imagine how several of those per year would impact your business.
Think of hiring mistakes as the “silent killers” of your balance sheet. They run wide and deep and can be extremely difficult to measure. Whether the true cost is 3x, 5x, 10x, or 15x the base salary, hiring mistakes are highly damaging to both the balance sheet and morale, and extremely frustrating and counterproductive for all involved.
3 Leadership Gurus’ Brilliant Strategy for Smart Hiring: Reference Checking
Allow me to preface by stating the process of “reference checking,” as most know, it is perceived as a waste of time. Unfortunately, the process, as most know it, is in fact a waste of time. There is an exception to the rule when it comes to this process and applying a methodology that actually works, and the executives outlined below know what a healthy due diligence process involves and know how to get it right.
1. Reed Hastings, CEO, Netflix, believes “reference checking is the most important step in hiring” and an element of the hiring process that he finds “shockingly underutilized.”
Hastings was interviewed by John Doerr at an investment conference for CEO’s earlier this month. Business Insider published an article last week outlining Hastings views on reference checking, including the video of his interview.
Hastings said, “every manager should realize that there are plenty of people who can make themselves sound much more impressive than they really are and buffalo you if you spend enough time with them in an interview setting.”
“I’m amazed when I know of people who hire someone and didn’t even try to make a call. I think that the reference checking thing is not as thorough as you would think.”
2. Joel Peterson, CEO, Jet Blue posted an article about Lazy Reference Checking and believes it is among the top 10 hiring mistakes.
Peterson believes that “reference checking is a critical step to take before the offer has been made” and recommends “talking with people who’ve actually worked with the candidate.” He feels “cutting corners when it comes to checking references is flirting with disaster” yet, Peterson says, “you’d be surprised how many executives treat reference checking lightly, or skip it altogether.”
Peterson says “what a person has done in the past, and the type of character and heart they have, are the best predictors of what they’ll do in the future – and the people that have worked with them can give you the clearest picture of these qualities, if you ask the right questions.”
Reference calls are not a “check the box” hiring chore to get quickly off your list. Both Peterson and Hastings believe in going beyond the list of references the candidate gives you. Peterson feels “if you let them know in advance you’ll be doing so, that will allow them the opportunity to tell you which people or places they prefer you not contact, and why.” If someone refuses to let Peterson speak with anyone but a couple of “pre-wired references”, he wonders “whether there’s something deep going on. If the person drops out of the running rather than consent to talking to a few more colleagues, they’re likely not a great fit in the first place.”
3. Kevin Ryan, Chairman and Founder of Gilt Groupe, and Chairman and Co-Founder of Business Insider, believes Reference Checks Are The Key to Hiring Extraordinary People and if given the option to reference check or interview, Ryan chooses the reference check. Every time.
Ryan says “references are an invaluable resource for any hiring manager and help to paint a picture of what, exactly, the candidate was like in former work roles. The right reference knows this person and knows everything about them,” Ryan says.
Despite the many upsides reference checks offer, Ryan notes that “surprisingly few people give them the time they deserve. What’s more, references help guard against a hiring manager making a potentially risky gut instinct decision.” Ryan admits that, in the past, he has fallen victim to hiring a person based on an initial “gut feel” and conducting only “perfunctory” reference checks. “And so when I find out a year later that this person didn’t work well with other people, and that actually happened at their last company as well, that’s 100% my fault,” Ryan adds.
Ryan says “It’s best to have a wide range of references. That way you’re not just interviewing the friends your candidate listed and also ensuring you don’t accidentally talk only to the one person who has a huge grudge against your applicant.”
“I know people who will interview 30 people to find someone, spend 30 hours,” he says. “Would you spend even five hours doing reference checks? I doubt it.”
Placing Value on Your Talent Acquisition Team
Leaders who believe people are their greatest asset, and know the company they are leading can only be successful because of their people, place the utmost value on the individuals managing their talent acquisition initiatives