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Hiring for a Competitive Advantage
Successful hiring is one of the key factors in operational success for large and small businesses alike.
Executives should approach the hiring process as a means to both improve their existing workforce and
to secure candidates who will add long-term value to the organization. If approached merely as a step
toward replacing a lost asset, the hiring process will squander considerable resources and forfeit
significant opportunity value from a potential personnel improvement. The mission is obvious, yet,
according to business owners, finding the right employees can be an elusive aspiration in a drawn-out
process.

The results of the hiring search can be crucial for the future of small businesses and a poor decision can
easily cost any organization well into the six figures. Every new hiring opportunity has the potential to
improve a business or set it back significantly, and should be approached using the same level of data,
knowledge, and preparation required for any critical business decision.

The “people decision making” process, however, is littered with intangibles. Nationwide unemployment
continues to hover at or around 9 percent but we have yet to experience the expected talent surplus
from this prolonged recession. Instead, talent managers continue to struggle to fill leadership roles and
key positions with the people who are right for their organizations, according to Deloitte’s 2010 series
“Talent Edge 2020.” Avoiding this quandary is paramount to every business's success. To do that,
organizations     must    adopt       hiring    methods     that     increase     the      chances     of
securing productive and profitable hires.

Sift Through the Facts

Identifying the right candidates should go beyond resume strength, interview performance, personal
references or “gut reaction.” While the traditional big three—resume, interview, and references—can
help drive an application, these factors alone cannot generate a comprehensive enough portrait of the
candidate to justify the company’s investment of time and money.

The resume frequently serves as the sole initial source for determining candidate strength, and includes
information about education, experience, and special skills. This document is, however, an imperfect
guide to a candidate's true strengths. According to the 2009 Harvard Business Review article, “The
Definitive Guide to Recruiting in Good Times and Bad,” various surveys and research find that between
39 percent and 50 percent of resumes contain erroneous information, so they must be taken with a
grain of salt until fully verified.

Despite the prevalence of inaccurate data, executives can still get some information from the resume.
The reported candidate's career arc can provide information about career path; what the candidate
reports having accomplished at each previous job; how much time spent in areas that a company
requires; and predicted level of loyalty the candidate may have to the company.
Weigh Strengths

Hiring managers should not give too much weight to years of experience and technical skills alone. A
resume does not report how successful the candidate was; it only explains the positions held.
Experience and technical skills are far less likely to predict high performance than factors such as
motivational fit, organizational culture match, and interpersonal skills. So, in looking at a candidate’s
resume, it is important to conceptualize how an applicant's prior organizations may have functioned;
how the individual's qualities impacted performance and demanded work; and how the individual
connected with that organization’s unique company culture. Deloitte’s 2009 study indicated that since
over one-third of senior executives cited retention as a pressing talent concern, it may be important at
this stage in the process to check for other such candidate traits as well.

Executives rarely give these important factors enough consideration in hiring new candidates. In the
Harvard Business Review’s 2009 study, while 43 percent of executives gave priority to relevant
experience and technical skills, only 24 percent gave similar weight to an individual's ability to
collaborate in teams, and 11 percent considered the candidate's readiness or ability to learn new things
— though the last two attributes are more related to success than skills.

This same pool of executives reported that their hiring practices relied heavily on subjective personal
preferences, and their views about hiring differed varied widely. They disagreed on whether to hire
insiders or outsiders; who should be involved in the hiring process; how to assess candidates; and the
keys to successful hiring and retention.

Verify Abilities

The interview process is an experience that is hard to duplicate. It allows executives to check the more
sensory-oriented aspects of candidates, such as their ability to communicate and their interpersonal
skills. It represents the human side of hiring. An interview can help make predictions about a person’s
suitability for a given job and how well they may "fit" the organization’s culture. As selection expert Dr.
Charles Handler puts it, “Years of research into the interview process suggest that the accepted validity
coefficient (i.e., the accuracy) of the traditional (unstructured) employment interview ranges from .10 to
.20. In 'non-geek speak' this means that, across the board, interviews predict an applicant's actual ability
to do the job with only one percent to four percent accuracy, suggesting that between 96 percent and
99 percent of what it takes to effectively perform a job is not being measured by your employment
interview.”

To verify what you think you learned about a candidate in an interview, a thorough background check
will make sure the candidate isn’t putting up an appealing facade. The reference check is designed to
help guarantee that the individual can perform as promised, has a positive work ethic, and can be relied
upon. All negative impressions from previous employees should be taken into serious consideration, and
a determination made of the potential downside should the relationship not work.
Gain a Statistical Advantage

Hiring is a demanding process and is largely subjective. The overall subjectivity with which executives
approach the hiring process and the informal processes most often used will almost always come down
to a final decision made by “gut instinct.” After all of the careful scrutiny, analysis, and questioning that
goes into the process, executives say that it almost always comes down to an intuitive decision.

The difficulty in hiring is that there are simply too many variables in play to make a decision that will
likely result in a highly productive employee. Some say that three good hires can't make up for the
problems caused by one bad hire. To reduce unintentional bias and mistakes inherent in the traditional
hiring process, executives should incorporate more science-based data to get a more accurate picture of
the applicant and likely future performance.

Today, the hiring process can easily be augmented with comprehensive personality tests and cognitive
analyses. While most applicants can manage their image for an hour in an interview or spin their resume
to appeal to the targeted audience, personality and reasoning tests are much more difficult to
manipulate. These simple virtual tests measure cognitive ability, personality, potential performance, and
their strengths and weaknesses. From these tests, it's actually possible to tell within a high degree of
confidence whether they'll be happy with their job and their position within the company culture.

Cognitive reasoning is a simple enough measure to gather for each candidate. Quick questioning within
a few separate fields helps rank candidates by their ability to solve problems, conduct verbal reasoning,
communicate, and deal with quantitative information. While certain qualities may be unimportant in
particular scenarios, it's clearly wise to hunt for candidates with a strong learning index and the
appropriate level of verbal skills. When candidates’ abilities match those required by the job, they'll be
much more successful and confident.

These assessments can also measure behavioral traits, such as sociability, assertiveness, attitude,
decisiveness and independence. Responses can help the hiring team learn quickly how a potential
employee would fit in the existing job culture and with management's current practices. If you find a
highly dependent employee in a small, relatively self-managed organization, for instance, then you will
need someone to direct this individual to make sure he or she stays on track.

Measuring behavioral traits is an effective way for hiring managers to staff leadership positions or even
round out teams by providing balance within divisions. Research demonstrates that teams made up of
diverse personalities are often more productive than homogeneous teams, so work to actively fill out
your staff with compatible yet differing personalities.

As always, however, executives should measure the candidate's strengths against the position’s
requirements. When hiring a software designer, the individual will rarely require the same leadership
skills that you would look for in a project manager. Understand the position, decide what qualities are
needed for this position, and tailor the interview to test these strengths and weaknesses.
A strong leader can grow and inspire current employees, while new personalities in existing teams can
round out group dynamics to increase productivity and efficiency. Finding an employee who will work
well within the company and provide profitable longevity is therefore crucial to the success.

Personality and aptitude pre-hire assessments are accurate and can help predict future success on the
job. They provide a significant statistical improvement over the traditional “gut instinct” hiring
mentality. And, if you have ever made a hiring mistake, assessments give new meaning to “what you see
is not always what you get.”

The Holistic Approach to Hiring

In the future, it may be wise for organizations to take these practices into consideration to improve their
chances of hiring viable and successful candidates. A holistic hiring approach requires managers to
analyze candidates on both the personal level and from the scope of the greater organization. Before
analyzing each candidate, executives should first answer the following questions:

Where will the individual be placed within the organization?

How will the individual be interacting with colleagues?

What will the candidate be doing?

What is the company's/team's culture?

Making hiring decisions based on skill or personality alone can take a business only so far. By blending
the two, your organization will gain a competitive advantage great enough to tip the scales in your favor.
Invest in the future of your company through an educated hiring process, avoid brash decisions, and
strengthen your organization.

For further information kindly visit:
http://businessedge.michcpa.org/issue/article.aspx?i=v8n12&a=542&s=MI

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Hiring for a competitive advantage

  • 1. Hiring for a Competitive Advantage Successful hiring is one of the key factors in operational success for large and small businesses alike. Executives should approach the hiring process as a means to both improve their existing workforce and to secure candidates who will add long-term value to the organization. If approached merely as a step toward replacing a lost asset, the hiring process will squander considerable resources and forfeit significant opportunity value from a potential personnel improvement. The mission is obvious, yet, according to business owners, finding the right employees can be an elusive aspiration in a drawn-out process. The results of the hiring search can be crucial for the future of small businesses and a poor decision can easily cost any organization well into the six figures. Every new hiring opportunity has the potential to improve a business or set it back significantly, and should be approached using the same level of data, knowledge, and preparation required for any critical business decision. The “people decision making” process, however, is littered with intangibles. Nationwide unemployment continues to hover at or around 9 percent but we have yet to experience the expected talent surplus from this prolonged recession. Instead, talent managers continue to struggle to fill leadership roles and key positions with the people who are right for their organizations, according to Deloitte’s 2010 series “Talent Edge 2020.” Avoiding this quandary is paramount to every business's success. To do that, organizations must adopt hiring methods that increase the chances of securing productive and profitable hires. Sift Through the Facts Identifying the right candidates should go beyond resume strength, interview performance, personal references or “gut reaction.” While the traditional big three—resume, interview, and references—can help drive an application, these factors alone cannot generate a comprehensive enough portrait of the candidate to justify the company’s investment of time and money. The resume frequently serves as the sole initial source for determining candidate strength, and includes information about education, experience, and special skills. This document is, however, an imperfect guide to a candidate's true strengths. According to the 2009 Harvard Business Review article, “The Definitive Guide to Recruiting in Good Times and Bad,” various surveys and research find that between 39 percent and 50 percent of resumes contain erroneous information, so they must be taken with a grain of salt until fully verified. Despite the prevalence of inaccurate data, executives can still get some information from the resume. The reported candidate's career arc can provide information about career path; what the candidate reports having accomplished at each previous job; how much time spent in areas that a company requires; and predicted level of loyalty the candidate may have to the company.
  • 2. Weigh Strengths Hiring managers should not give too much weight to years of experience and technical skills alone. A resume does not report how successful the candidate was; it only explains the positions held. Experience and technical skills are far less likely to predict high performance than factors such as motivational fit, organizational culture match, and interpersonal skills. So, in looking at a candidate’s resume, it is important to conceptualize how an applicant's prior organizations may have functioned; how the individual's qualities impacted performance and demanded work; and how the individual connected with that organization’s unique company culture. Deloitte’s 2009 study indicated that since over one-third of senior executives cited retention as a pressing talent concern, it may be important at this stage in the process to check for other such candidate traits as well. Executives rarely give these important factors enough consideration in hiring new candidates. In the Harvard Business Review’s 2009 study, while 43 percent of executives gave priority to relevant experience and technical skills, only 24 percent gave similar weight to an individual's ability to collaborate in teams, and 11 percent considered the candidate's readiness or ability to learn new things — though the last two attributes are more related to success than skills. This same pool of executives reported that their hiring practices relied heavily on subjective personal preferences, and their views about hiring differed varied widely. They disagreed on whether to hire insiders or outsiders; who should be involved in the hiring process; how to assess candidates; and the keys to successful hiring and retention. Verify Abilities The interview process is an experience that is hard to duplicate. It allows executives to check the more sensory-oriented aspects of candidates, such as their ability to communicate and their interpersonal skills. It represents the human side of hiring. An interview can help make predictions about a person’s suitability for a given job and how well they may "fit" the organization’s culture. As selection expert Dr. Charles Handler puts it, “Years of research into the interview process suggest that the accepted validity coefficient (i.e., the accuracy) of the traditional (unstructured) employment interview ranges from .10 to .20. In 'non-geek speak' this means that, across the board, interviews predict an applicant's actual ability to do the job with only one percent to four percent accuracy, suggesting that between 96 percent and 99 percent of what it takes to effectively perform a job is not being measured by your employment interview.” To verify what you think you learned about a candidate in an interview, a thorough background check will make sure the candidate isn’t putting up an appealing facade. The reference check is designed to help guarantee that the individual can perform as promised, has a positive work ethic, and can be relied upon. All negative impressions from previous employees should be taken into serious consideration, and a determination made of the potential downside should the relationship not work.
  • 3. Gain a Statistical Advantage Hiring is a demanding process and is largely subjective. The overall subjectivity with which executives approach the hiring process and the informal processes most often used will almost always come down to a final decision made by “gut instinct.” After all of the careful scrutiny, analysis, and questioning that goes into the process, executives say that it almost always comes down to an intuitive decision. The difficulty in hiring is that there are simply too many variables in play to make a decision that will likely result in a highly productive employee. Some say that three good hires can't make up for the problems caused by one bad hire. To reduce unintentional bias and mistakes inherent in the traditional hiring process, executives should incorporate more science-based data to get a more accurate picture of the applicant and likely future performance. Today, the hiring process can easily be augmented with comprehensive personality tests and cognitive analyses. While most applicants can manage their image for an hour in an interview or spin their resume to appeal to the targeted audience, personality and reasoning tests are much more difficult to manipulate. These simple virtual tests measure cognitive ability, personality, potential performance, and their strengths and weaknesses. From these tests, it's actually possible to tell within a high degree of confidence whether they'll be happy with their job and their position within the company culture. Cognitive reasoning is a simple enough measure to gather for each candidate. Quick questioning within a few separate fields helps rank candidates by their ability to solve problems, conduct verbal reasoning, communicate, and deal with quantitative information. While certain qualities may be unimportant in particular scenarios, it's clearly wise to hunt for candidates with a strong learning index and the appropriate level of verbal skills. When candidates’ abilities match those required by the job, they'll be much more successful and confident. These assessments can also measure behavioral traits, such as sociability, assertiveness, attitude, decisiveness and independence. Responses can help the hiring team learn quickly how a potential employee would fit in the existing job culture and with management's current practices. If you find a highly dependent employee in a small, relatively self-managed organization, for instance, then you will need someone to direct this individual to make sure he or she stays on track. Measuring behavioral traits is an effective way for hiring managers to staff leadership positions or even round out teams by providing balance within divisions. Research demonstrates that teams made up of diverse personalities are often more productive than homogeneous teams, so work to actively fill out your staff with compatible yet differing personalities. As always, however, executives should measure the candidate's strengths against the position’s requirements. When hiring a software designer, the individual will rarely require the same leadership skills that you would look for in a project manager. Understand the position, decide what qualities are needed for this position, and tailor the interview to test these strengths and weaknesses.
  • 4. A strong leader can grow and inspire current employees, while new personalities in existing teams can round out group dynamics to increase productivity and efficiency. Finding an employee who will work well within the company and provide profitable longevity is therefore crucial to the success. Personality and aptitude pre-hire assessments are accurate and can help predict future success on the job. They provide a significant statistical improvement over the traditional “gut instinct” hiring mentality. And, if you have ever made a hiring mistake, assessments give new meaning to “what you see is not always what you get.” The Holistic Approach to Hiring In the future, it may be wise for organizations to take these practices into consideration to improve their chances of hiring viable and successful candidates. A holistic hiring approach requires managers to analyze candidates on both the personal level and from the scope of the greater organization. Before analyzing each candidate, executives should first answer the following questions: Where will the individual be placed within the organization? How will the individual be interacting with colleagues? What will the candidate be doing? What is the company's/team's culture? Making hiring decisions based on skill or personality alone can take a business only so far. By blending the two, your organization will gain a competitive advantage great enough to tip the scales in your favor. Invest in the future of your company through an educated hiring process, avoid brash decisions, and strengthen your organization. For further information kindly visit: http://businessedge.michcpa.org/issue/article.aspx?i=v8n12&a=542&s=MI