Securing Tomorrow’s Talent Finding, Hiring, and Keeping Talent
We have all heard about “The Great Resignation”. Since early 2020, companies have seen their talent pool decimated along with just about everything else. Everything is changing and evolving. As a result, it is certainly time for companies looking to find, hire, and keep highly technical/capable employees to change the status quo. But, to secure tomorrow’s talent, companies must rethink how they approach the whole process.
Don’t Hire Just Like You
According to the Harvard Business Review, 80% of employee turnover is due to bad hiring decisions. And this statistic is not new. So why is it that we don’t seem to be getting any better at successfully hiring, developing, and retaining talent?
Hiring managers need to understand that they need to fight the tendency to “hire those I like” or gravitate to hiring people that “are just like me.” If you are a technical person, and you are hiring a salesperson, hiring someone “just like you” could be the worst thing you could do. If you are introverted, you need to hire an extravert. If you are focused on having “perfect knowledge” before making a decision, you could be making a huge mistake hiring a salesperson that is unwilling to manage sales cycles with less-than-perfect information. Before you start the next interview cycle, take some time to consider the traits you need in a role, not the traits you find most appealing.
I Have a Gut Feeling
The next critical issue that leads to bad hiring decisions is the tendency for hiring managers to “go with their gut”. In a Geoff Ashley & Associates survey of more than 100 Value-Added Reseller (VAR) owners or executives, 99% revealed that they have not spent even one dollar or one hour investing in an education on how to interview and hire. More than 65% acknowledged that they have not had any education related to hiring. They don’t understand the psychology of interviewing and hiring. They don’t understand that there are some very important questions that need to be asked. And they don’t have any idea of what a “good answer” is! Most spend the majority of their time selling their company to the candidate.
Going back to the HBR study, 99% of all hiring decisions (hiring highly technical resources) are made after interviewing a candidate. Yet traditional interviewing techniques have a less than 20% effectiveness rate. After 30-years, I have come up with the following reasons why:
- Interviewers are not trained and the process is not formalized
- Selection decisions are made too quickly . . . or sometimes take too long to make
- Emotional decisions are based on “chemistry” or personal style
- Hiring managers place too much emphasis on education and technical (hard) skills and not enough (if any) on soft skills.
- Interviewers do not take the time BEFORE starting the hiring process to audit the role description, job functions, key requirements, and key indicators of success for this role.
- Interviewers rarely (if ever) spend any time determining what the successful candidate profile is. And even less time (if ever) auditing their opinion by actually validating against people already successful in the role. Now is the time to find out why they are so successful in their role – and find a candidate that is likely to evolve into a top performer.
- Many VAR’s utilize way too many people in the hiring process. I have personally been involved in hiring processes where I have met with fifteen people! This is totally unacceptable and unnecessary. This is simply a waste of time and resources. Additionally, you could take so long to get schedules to work out that the candidate accepts a role with another company because they can’t wait for you!
Losing Your Workforce
More than 70% of executives are let go because they didn’t fit in an organization’s culture – not for performance reasons. According to WorkForce Assessments, 55% of salespeople should not be in sales at all! Of the 45% that are left, 25% are selling the wrong product or service. For those that are doing the math… this is the genesis of the 20% of the sales force doing 80% of the sales. The 80/20 rule is not just a cute saying, it is actually based on fact.
The US Department of Labor statistics shows that 50% of new hires last six months or less. And this data was pre-pandemic. It has gotten much worse as companies have become more desperate to hire, and employees have become less patient with a bad working experience. The idea of staying at one company for your entire career is gone. According to the University of Wisconsin Center for Community Economic Development, employee turnover for all companies is 12% and that a full 75% of all new hires are to replace employees that have left. In other words, we are hiring to replace, not to grow.
On average, 2 out of 3 new hires will disappoint in their first year… But it does not mean they leave! Many non-productive employees remain in the job for long periods of time and these costs (losses) can be enormous.
The cost of replacing an employee is usually between 33% to twice that of the employee’s salary according to a Yahoo.com article. This number is increasing rapidly as the cost of benefits continues to rise each year. And those percentages are even higher for technical and executive roles.
Bad Hiring Practices
One study found that 95 out of 100 applicants lie in an interview and well over 50% of resumes contain exaggerations or outright lies. Like “mirrors in a funhouse”, resumes often offer a distorted image of reality whose main function is to deceive the eye. A VAR study completed in 2007 and again in 2017 suggests that more than one half of the VAR’s that hired that year did so without confirming the information that was presented in the hiring process – including checking references. A 2021 survey by the same author found that these practices still had not changed!
A very interesting study found that employee referral programs did NOT offer any significant additional success rates for retention. In other words, just because someone suggests that they “know” someone that would be perfect for the role, a formalized hiring process is still needed. Employee (or other) referrals tend to suffer from personal bias. Also, many employees will refer someone outside of their specific expertise without sufficient understanding of the real needs and requirements of the position.
One last comment on why we continue to make bad hiring decisions: over the course of my career, one thing that has remained consistent is the reluctance of VAR’s to pay a professional recruiter to help them find and hire the right talent. This is a very expensive way to save money!
We simply cannot afford to keep making hiring mistakes!
Fixing The Hiring Problem
So what can we do? In my opinion, you have two choices:
- You can invest time and money to become better at hiring and developing employees or
- You can invest time and money on an outside professional that has a proven methodology and track record of success in helping VAR’s hire and retain employees.
I have surveyed VAR owners for decades. Hundreds and hundreds of owners and executives have shared with me a very interesting perspective:
“The single, largest impediment to their growth is finding and retaining talent.” In other words, not having the right people in the right role and the inability to keep them for a long time is preventing them from achieving their goals. They are not as profitable as they could be. They can’t scale and grow. It is possible that this is the single most essential and missing capability impacting MOST VAR organizations today.
Securing Tomorrow’s Talent means you have to make hiring a priority. Specifically, hiring the right way. You have to invest in yourself and your hiring managers. Do this first! There is much to learn. If you think you know, you don’t. If you think you are good at this, you aren’t. Spend time to make hiring a priority. Make it a formal process. The results will make all the difference!
Special thanks to Geoff Ashley of Geoff Ashley & Associates for the contribution