Hiring Talent: What Makes a Bad hire?

Hiring successful people on the job is a difficult and complex process.  It involves trying to predict, through some structured process, who matches the requirements of the role and who does not.  To make matters worse, the Harvard Business Review reported that only about one-third of employers are actually monitoring whether their hiring practices are resulting in good hires. 

Let’s Go Fishing

Today, most talent acquisition processes go something like this:

• Put together a job description – and if you are doing it well, it includes a job analysis that identifies the competencies (knowledge, skills, abilities, and personal characteristics) necessary to be successful in the role and is put together by someone skilled in job analysis (i.e., NOT the hiring manager).
• Post your job and wait for active applicants, do a passive candidate search on social media, ask your network for candidate referrals.
• Screen applicants for minimum qualifications, either manually or via applicant tracking software by looking at education and experience.
• Conduct a pre-screen interview to determine who might be a viable candidate and who Is not a good match.
• Conduct additional interview(s) with short-listed candidates to make sure they can answer your questions about the job and its requirements correctly. 
• You might also do a background check, but this is nearly useless these days, with most employers only willing to confirm employment dates and titles.
• Extend your offer and make your hire.
• Wait six months or longer to see your results.

The critical step in this process is each of the screening steps: the screening for minimum qualifications, the pre-screening interview, and the formal interviews.  All of which are meant to narrow the hiring pool based on an attempt to uncover a candidate’s true ability to successfully perform in the role. However, it is so easy for people to show up well on paper and even in an interview, or two, that a 2017 CareerBuilder survey reported 74% of employers reported having made a bad hire.  

What Makes a Bad Hire?

Based on the 75 years of research at PSP Metrics, a bad hire is unsuccessful in their role because they lack:

• The intellectual abilities necessary to do the job
• Listening skills
• Interpersonal skills
• The ability to lead a team
• The ability to adapt to change
• The ability to follow through
• An understanding of how their role fits into the bigger picture

In fact, CareerBuilder’s survey revealed similar reasons for the failure of bad hires, as reported by the employers.  Fifty percent of employers reported the worker did not work well with others, 53% reported the worker possessed a negative attitude, and 54% reported the worker did not produce the proper quality of work.  All of which could have been avoided.

How to Catch What You Are Fishing For

Up until roughly the 1980s, most roles above entry-level were hired from within a company.  This meant that on-the-job performance and personal characteristics had already been observed. Today, only less than 33% of roles are filled by internal promotion or lateral moves.  This means that the need to generate valid insights into a candidate’s intellectual abilities and personal characteristics, which are both known predictors of on-the-job performance, is more critical than ever for employers so they can make hiring decisions backed by science and data, not just recommendations and interview answers.  

A candidate can tell you they are great at leading a team, but you have no real data to support how true this statement might or might not be.  Even a well-structured interview can be gamed by a candidate. A reference check that does come with a recommendation is really just the opinion of someone who the employer knows less well than they know the actual candidate. Plus, let’s be honest, no one gives you the name of a person who is going to tell a potential new employer any of their flaws. 

The idea of assessing skills and personal characteristics is not a new concept. In fact, in the US, it is backed by over 100 years of research that dates back to 1917 and a test to identify soldiers prone to nervous breakdowns.  For much of the post-WWII era, the external hiring process was an extensive one that included much of what we do today, but it also included skills and personality testing.  As the competition for talent is at an all-time high and many are casting their nets only to pull them in empty, employers are seeking to catch the best talent by implementing a quick process.  This has resulted in tossing aside one of the best tools an employer could put in their tackle box – an objective and scientific assessment of the skills and personal characteristics of candidates.

Many might say that this part of the process is just too expensive. Considering that a bad hire impacts things such as productivity, morale, increase in supervision needed, lost clients/ customers, damage to reputation, recruitment costs, training costs, and potentially even legal fees, the cost of a bad hire can be as little as $17,000 and as much as $240,000, according to CareerBuilder and the US Department of Labor. Done well and with a company who uses research-backed employee testing, the cost to incorporate employee skills and personal characteristics testing into the talent acquisition processes clearly is much less expensive than hiring a bad fish. And let’s face it, nothing stinks more than bad fish.

PSP Metrics is a Pittsburgh-based consulting firm that has assisted local, national, and international businesses in improving the quality and productivity of their employees for over 75 years. PSP is a leading provider of pre-employment screening tools for the manufacturing, consumer products, utility, and service industries.  

Inspired by the article Predicting successful people, by the late Dr. Stephen L. Guinn, who served as Managing Partner at PSP Metrics for over 40 years.