Friday, June 5, 2009

Six Hiring Mistakes GOOD Leaders Make

When Abraham Lincoln was asked why he filled his top three Cabinet posts with his opponents from the 1860 Republican presidential nomination, he responded simply "I had looked the party over and concluded these were the very strongest men." (1)

Lincoln understood that his performance was greatly dependent on the team he put together. He also knew that there was a huge cost if he did not hire the “strongest” people for the job.

A survey conducted by Watson Wyatt estimated the total costs of turnover for a typical employee to be between 48 percent and 61 percent. (2.) They point out that hiring costs have three components:

1. Hard dollar costs (e.g., recruiting)

2. Lost productivity (e.g., before leaving, during recruitment, and throughout the on-boarding of the new hire)

3. Other losses (e.g., lower manager and team morale, changing priorities to handle other employees’ work)

For a firm with 10,000 employees, a 15 percent turnover rate (1,500 annually), and an average salary of $50,000 per year (including benefits), the total turnover costs would be $36 million (48%) to $45.75 million (61%) annually. What are your costs?

Another way to look at the financial implications of hiring decisions is to multiply the average number of years employees stay in your organization times their salary. For example, if you're hiring a mid-level manager with a salary of $100,000 per year and your managers stay for an average of ten years, every mid-level manager hiring decision you make is a $1 million decision. It pays to interview and hire well.

How good are leaders at interviewing and hiring the best? Not very. This was demonstrated when the University of Texas Medical School interviewed and scored 800 applicants in an effort to admit only the best, according to Fast Company. (3) The ratings played an important role in the selection of the students, along with grades and the quality of their undergraduate schools. Only those students who ranked high were admitted to the school.

In an unexpected twist however, the Texas legislature required the medical school to admit another 50 students. Because all the other top candidates had been chosen by other schools, University of Texas Medical School was forced to admit 50 poorly ranked medical students.

The good news was that no one at the school knew that there was a high ranking and low ranking group (except a few researchers). The startling news was that after four years there was no performance difference between these two groups. Graduation rates, received honors, and grades were all the same. Both groups also performed equally well during the first year of residency. So much for the interviewing strategies of top medical schools… and most organizations!

Researchers George Hollenbeck and Robert Eichinger of the Lominger group remind us that many leaders commit major mistakes during the interviewing process. (4) The six most common include:

1. Lack of preparation. It is almost impossible to hit a target you do not aim for. That's exactly what some leaders do when they conduct an interview without clearly understanding the nature of the responsibilities and competencies needed to fulfill a specific job.

2. First impression bias. Research shows that many leaders reached their hiring decision within the first three minutes of the interview. They then spend the rest of the interview confirming their initial positive impression.

3. Limited note taking. The failure to take notes during the interview makes it difficult to discuss the candidates with colleagues after everyone has been interviewed.

4. Focusing on relevant behaviors. Spending too much time discussing intriguing, yet irrelevant behaviors decreases the amount of time one can spend on specific behaviors required to perform essential job functions.

5. Leading questions. This often occurs when interviewers spend too much time providing information or asking a question.

6. Unstructured evaluation process. Not having clear evaluation criteria to compare candidates hurts decision-making.

Which of these six mistakes do you commit? What are your strategies for avoiding them? The XLM, seen below, can help you frame the interviewing process. We’ll explain each step in subsequent blogs.


Keep eXpanding,


1. Doris Kearns Goodwin, Team of Rivals - The Political Genius of Abraham Lincoln, Simon & Schuster paperbacks, New York, New York, 2005, page 319.

2. Patrick J Kiger; When people practices damage market value, Workforce Management, June 3, 2006.

3. Dan Heath and Chip Heath; Hold the Interview, Fast Company, June 2009, 51 -- 52.

4. George Hollenbeck and Robert Eichinger; Interviewing Right -- How Science Can Sharpen Your Interviewing Accuracy, Lominger international, Minneapolis, Minnesota, 2006.

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