Harvard Says: Your Approach to Hiring is All Wrong

If you’re a CEO, HR director or hiring manager at any level, your biggest headache is bad hires. This blog documents how bad hiring is in almost all companies, and I offer proven fixes to the many problems. This is a long blog and vlog, but since it highlights the causes of your biggest headache and offers cures, maybe it’s worth reading or watching it.

Last month I wrote a very critical blog about an author’s interpretation of Harvard Business School research on hiring. The author, a poet, got it all wrong. She said that HBS research led to a conclusion that companies are better off hiring pleasant people who are mediocre performers, rather than hiring very high performers who might be hard to work with. However, the Harvard researchers’ conclusion was: it’s best to hire people who are pleasant to work with AND high performers, because high performers produce 80% of your profits.

This article published by SHRM confirms the extensive research Topgrading, Inc. has performed over 4 decades: for almost all companies, “Your Approach to Hiring is All Wrong.” I add this: Topgraders’ approach to hiring is not at all wrong – it is all right, and case studies prove it.

The HBR article is very long, so I will only hit on the most important conclusions of their research. I’ve shortened their wording and followed with my commentary.

  • Businesses have never done as much hiring as they do today. They’ve never spent as much money doing it. And they’ve never done a worse job of it.
    I don’t know if it’s worse, because since Adam and Eve hiring has been awful. Our research shows only 25% of people hired in SMBs and big companies turn out to be the high performers CEOs want.
  • The big problem with all these new practices is that we don’t know whether they actually produce satisfactory hires. Only about a third of U.S. companies report that they monitor whether their hiring practices lead to good employees; few of them do so carefully, and only a minority even track cost per hire and time to hire.
    Companies do ROI analyses of everything they buy… except the most important thing: Talent.
  • Hiring talent remains the number one concern of CEOs in the most recent Conference Board Annual Survey; it’s also the top concern of the entire executive suite.
    Our research shows the same – the #1 headache of the C suite is bad hires.
  • Employers are missing the forest for the trees. Obsessed with new technologies and driving down costs, they largely ignore the ultimate goal: making the best possible hires.
    Our Cost of Mis-hire Form should be used by all companies. Our research shows even at the mid-management level, a mis-hire costs 5 times salary plus 200 hours “wasted.”
  • Once people are candidates, they may not be completely honest about their skills or interests—because they want to be hired—and employers’ ability to find out the truth is limited.
    Our research shows at least 40% of resumes and interview responses contain lies.
  • Be wary of vendors bearing high-tech gifts. On average, companies get five to seven pitches every day—almost all of them about hiring—from vendors using data science to address HR issues. These vendors have all sorts of cool sounding assessments, such as computer games that can be scored to predict who will be a good hire. We don’t know whether any of these actually lead to better hires, because few of them are validated against actual job performance. That aside, these assessments have spawned a counterwave of vendors who help candidates learn how to score well on them.
    I’ve properly validated personality tests and found that every personality test that requires a minimum score eliminates as many A Players as C Players.
  • Revamp your interviewing process.
    The Topgrading Interview is by far the most thorough, most revealing, and most valid interview method.
  • Recognize the strengths and weaknesses of machine learning models. Culture fit is another area into which new vendors are swarming.
    The Topgrading Interview “nails” culture fit because candidates are asked, for every job, what they liked and disliked about the company and their job and they are asked how every boss would rate them on overall performance, and what their managers would list as their strengths and weaker points.
  • Machine learning models do have the potential to find important but previously unconsidered relationships. Their results gloss over the fact that they often have only a trivial ability to predict who will be a good performer.
    Note: “trivial” ability to predict. TopgradingCaseStudies.com shows the results of dozens of case studies. The average improvement is from 26% to 85% high performers (HIGH, not just okay performers) hired and all the CEOs say the company is more successful, more profitable because of Topgrading.
  • It’s impossible to get better at hiring if you can’t tell whether the candidates you select become good employees. If you don’t know where you’re going, any road will take you there. You must have a way to measure which employees are the best ones. Topgrading starts with creation of a Job Scorecard, the measurable accountabilities the new hire will have to achieve.
  • Organizations that don’t check to see how well their practices predict the quality of their hires are lacking in one of the most consequential aspects of modern business.
    For four decades, Topgrading companies have accurately measured success hiring before Topgrading and since Topgrading. These stats plus the measured costs of mis-hires show huge benefits to the company profits. And hundreds of thousands of managers have enjoyed more successful careers, using Topgrading to create teams of almost all high performers.

Conclusion: Followers of Topgrading must get tired of books and blogs claiming Topgrading is the only hiring method to have achieved such dramatic improvements in hiring. But it’s true, and it’s true because only Topgrading has solved the biggest problems hiring.

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