Wednesday, January 16, 2008

The 10 Most Serious Hiring Mistakes and How to Fix Them

by Brad Smart, Author of Topgrading: How Leading Companies Win by Hiring, Coaching, and Keeping the Best People

I don’t know about you, but early in my career I was very disappointed with my hiring track record. Assessing selection candidates was my job, too! Thirty years ago I began studying why almost EVERYONE’S hiring record was so bad.
“Almost everyone?” Yes, so if you’re not satisfied with your hiring success, join the club! I met with the top HR managers of the largest 100 companies in the world, and even they said that 75% of their hires turn out to be disappointments…
… except for the Topgraders in the room. Topgraders use the same hiring methods everyone else does, but add one more critical, crucial, all-important step, in order to improve to 75%, 80%, and even 90% high performers hired: it’s quite simply a thorough chronological interview.
In my early quest to identify hiring mistakes and fixes, I found the chronological interview to be unbeatable. It doesn’t matter if you are a manager with one employee, an entrepreneur with 30 employees, or General Electric with hundreds of thousands! You can avoid the 10 most serious mistakes in hiring and you can at least double your hiring success, by using a thorough chronological interview.
“Prove it,” you say. OK, in Topgrading books there are case studies of companies that are named, so you can call someone to verify the improvement in hiring. Let me assure you, those results are for real! The CEOs and heads of HR at General Electric, Honeywell, Lincoln Financial, American Heart Association, and dozens of entrepreneurs have personally vouched for improvements to 80% and even 90% hiring success.
If you make some of the 10 common mistakes, you can read this article and immediately start hiring better. To achieve 90% high performers hired, however, you’ll need to learn more. Hey, first things first! I’ve identified the 10 mistakes from having studied hundreds of companies’ hiring methods and asked thousands of managers about their hiring mistakes and successes. The mistakes (and fixes) are presented in order, from the beginning of a job search to the end. It’s like a hiring chain, and there are 100 links. The “10 mistakes” (and fixes) are only the most rusty or non-existent links in that hiring chain.

Not Acknowledging When to Replace a Low Performer
Having asked 6,500 executives 15 questions (plus follow ups) about all of 10 jobs each, I’ve done 65,000 mini “case studies.” One of the questions is about talent – what talent the manager inherited in that job, talent at the end of the job, what people were replaced, what methods were used, etc. More than half of those managers said, “I should have replaced more low performers.” Hey, stop “carrying” low performers!
Practical Fix: Replace low performers. How? Start with an annual talent review.
At least once per year rank order your most valuable to least valuable team members. Then really scrutinize the bottom of the list. Replace chronic underperformers after they’ve been given a fair chance to meet performance goals.

Incomplete Job Description
Job Descriptions tend to be “boiler plate,” with generalities about responsibilities and competencies. I’m sure of this because my job is interviewing candidates for executive jobs, and I’ve interviewed thousands of candidates. (Whew!) Typically I read a long job description and notice there are unclear accountabilities. When those are clarified, it flushes out significantly different views of what the job really is. If the five managers who have the most at stake in this job all think the person should be measured on different things, any hiree is doomed!
Practical Fix: Write a Job Scorecard, Approved by Key Stakeholders.
Instead of job description we call it a job “scorecard” because first-year performance goals are spelled out. Be sure all the people with a real stake in the hiree agree on these accountabilities. And of course be sure the candidate is confident of achieving them!

Underestimating the Costs of Mis-Hires
In workshops we ask managers to complete a Cost of Mis-Hire form (it’s a free download when you sign up for the free newsletter, Topgrading Tips, at It only takes a few minutes to calculate the costs of a mis-hire, but you’ll slap your forehead, shocked at the high costs. Do this exercise with underperformers identified in your annual talent review. Our research in over 50 companies shows the average cost of a mis-hire of a manager earning $100,000 is $1.5 million, and its $560,000 for a mis-hired sales rep earning $100,000. Estimate the costs you’ve incurred and you’ll be more motivated to hire a replacement!
Practical Fix: Use the Cost of Mis-Hires form to accurately gauge the huge economic burden of not using Topgrading hiring methods.

Running Ads
Every study I’ve read on the best recruitment methods concludes the best approach is getting internal referrals.
Practical Fix: Develop Your Virtual Bench
Specifically, seek out and keep track of at least 20 likely high performers you might hire and 20 “connectors” who can refer high performers to you. Keep your PDA, Rolodex, and Address Book updated, noting who is highly talented. Pay “bounties” to incent your high performers to refer high performers they know.
Hiring from your Virtual Bench is quicker, cheaper, and better than running ads on – quicker because you already know Jennifer, who worked for you in a previous job, cheaper because there are no recruiter fees, and better because you know she can be a high performer.

Wasting Time on Unnecessary Phone Screens
Suppose your Virtual Bench didn’t produce anyone to hire, so you resort to running ads. 150 resumes are emailed to you. Ugh. It takes all Sunday afternoon to cut the 150 down to 20… 20 people to screen on the phone. But phone screens take 10-20 hours and two weeks of telephone tag. Double ugh!
Practical Fix: Use a Career History Form to Get Crucial Information Before the Phone Screen
Ask your AA to email the 20 people with the best resumes, thanking them for applying, and asking them to complete a form that requests:
-full compensation history,
-months (not just years) in each job (so short-term jobs can’t be omitted),
-likes and dislikes in each job,
-name of every boss (and permission to contact at mutually agreed upon time),
- and, a legally binding signature that says that falsehoods in the career history form are grounds for termination.
Now we’re talking! In one hour you can look through completed career history forms and identify the three or four candidates you’ll phone screen. You just saved 15-20 hours by avoiding more than a dozen phone screen interviews.

Relying Too Much on Round-Robin Competency (Behavioral) Interviews
Most Fortune 1000 companies do a job analysis that produces a job description, including several competencies. Candidates are phone screened and come in for a series of 50-minute interviews in which the interviewer asks 10 questions about just one competency. Trouble is, any candidate can easily fake answers to those questions:
“What’s an example in which you were a very good team player?”
“What was a time when you were not such a good team player?”
Worse yet, these methods result in only 25% high performers hired.
Surprise! After zapping the round-robin interviews I suggest keeping them. Candidates want to interview with several people and competency interviews are better than “tell me about yourself.” But you need to include a far more revealing, powerful hiring tool, so…
Practical Fix: Add a Chronological Interview
100% of managers and companies achieving 90% hiring success ask a lot of questions about every full time job, starting with the first one and coming forward chronologically. The chronological interview is by far the most important best practice, for it’s the only practice that has achieved 90% hiring success for thousands of managers. The Topgrading Interview Guide is 30 pages long, a “road map” with the questions and spaces for answers. A highly abbreviated guide would be:
- What were your successes (and how did you achieve them)?
-What were your mistakes and failures?
-What talent did you inherit and end up with, and what happened (replacing, coaching, etc…) in between?
-What would your boss say were your strengths, weak points, and overall performance?

Solo Interviews
If the chronological interview was hiring breakthrough #1 and the Topgrading Interview Guide was breakthrough #2 (enabling managers to improve hiring success to 50%), breakthrough #3 is the tandem method, the use of two interviewers.
Years ago Jack Welch, then CEO of GE, said he was happy the interview guide was helping GE pick people better, but he wanted 90% success and asked me for a suggestion. I said, “Use the tandem interview,” and he approved it in one second. Every manager achieving 90% success we know of uses the tandem chronological interview… for mid to upper management jobs.
Practical Fix: Use the tandem Topgrading Interview for all mid to upper level management jobs.
What, you say? It’s too time consuming for two interviewers to take three hours for a chronological interview? Let’s run some numbers. Suppose a mis-hire costs $400,000 and you mis-hire three sales reps, and fire all three, before hiring a good one. After all, your hiring success is average – one success in four. You waste $1.2 million plus hundreds of non productive hours with three mis-hires. Six hours for a tandem interview with 90% success is not only a money saver; it’s a super time saver!

Arranging Reference Calls with Non Bosses
Most companies prohibit managers from taking reference calls, fearing a law suit if a former employee claims unfairness in negative statements. So interviewers hype positives and they provide references who are their buddies, not fearing being caught.
Practical Fix: Ask Candidates to Arrange Reference Calls with Bosses in the Last 10 Years

It works 90% of the time! I wish I’d thought of it, but 20 years ago an A player told me he did this, so I started recommending this approach to clients. High performers easily get former bosses to talk, because those bosses will be saying positive things, and they (correctly) figure there is no risk of a law suit.
Better yet, tell all candidates this is a requirement, and they will be more truthful in answering interview questions.
And even better yet, when this process is widely known, low performers will not apply.

Violating the Law
You read about it every week – a law suit claiming discrimination because interviewers asked forbidden questions. I hope they enjoy their vacation in a minimum security prison (just kidding).
Practical Fix: Stick with the Interview Guide
The Topgrading Interview Guide has the wording for all basic questions. And when you compose follow up questions, do not ask about race, religion, pregnancy, or the many other forbidden areas.

Not Measuring Hiring Success
It’s amazing – hiring success is one of the very few stats not often kept. A survey of Global 100 companies showed only 10% measure hiring success. But Topgraders all do it. (Perhaps the measurement does not take place in most companies because hiring results are so awful!)
Practical Fix: Measure Hiring Succeess
Recently the head of HR of a mega company told me, “We measure, and get 97.5% success.” I probed, and learned that measurement was lame – the hiring manager is asked after 30 days, “Does the new hire have the skills to do the job?” Then I asked what percent hires turn out to be high performers after one year and he said, “Oh, only 20%!”
Practical Fix: Measure Costs of Mis-Hires
Complete a Cost of Mis-Hire form for all your mis-hires (It’s a free download at And, when a person has been on the job one year, assemble a team to judge whether the person has turned out to be a high performer or not. The team should consist of the hiring manager, HR, and two managers who work closely with the new hire.
Also measure percent high performers hired. As the chronological interview is used, percent high performers hired shoots up, and costs of mis-hires plummet. This will create positive peer pressure, with the Topgraders telling the laggards, “Hey, you have to use Topgrading hiring methods because your mis-hires are hurting your performance and the whole team’s!”

Avoid these 10 common hiring mistakes and you are certain to hire better, your higher performing team(s) will make your career soar, and your shareholders will be very pleased.

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