In Good to Great, business management expert Jim Collins uses a bus metaphor to describe the value of hiring well. Success, he believes, is a matter of getting the right people on the bus, the wrong people off the bus, the right people in the right seats – and only then working out the direction. Sounds simple, doesn’t it? But the answer to anyone who has run a business – or for that matter worked in one – will be a resounding “no”.
According to jobs website Monster, average employee turnover rate is as much as 15% a year, though in some industries it is far higher. Yes, some churn is inevitable in any business – even healthy. But high turnover rates suggest poor hiring decisions. And those have a colossal cost: Deloitte estimates the cost of losing an employee can be up to two times the employee’s annual salary, taking into account hiring, onboarding, training, ramp time to peak productivity, morale-related productivity problems, higher business error rates and general culture impacts.
So what to do? Google “how to hire good employees” and over 200 million results will greet you, many containing advice like: have a clear job description in place, check references, get your team involved… But if this worked, then attracting talent and employee retention wouldn’t be some of the biggest challenges facing businesses.
Five steps that will actually help you hire great employees
This practical five-stage hiring process that we developed over 20 years of working with high-performing leaders reduces failure rates by as much as 80%.
1. Start with why you fire people
Your values are not the adjectives you push around on paper during ‘vision days’. They inform far more of your corporate behaviour than you might think. In fact, excepting instances of gross misconduct, values violations are almost always why you fire people. Think back over your last five fires, and interrogate why you parted company. The difference between these values and those in your brand book might surprise you.
2. Embrace values-based interviewing
Next, feed your (now accurate) values into the interview process as a first, knock-out stage. Say you value autonomy. Ask a question such as “Give me three examples of where you’ve identified and solved a problem under your own steam”. Or if you value direct communication, ask candidates to talk through how they handle conflict. This will help determine if the individual is a good fit, fast.
3. Run competency checks as a second interview stage
Many businesses leave competency checks until the very end of the selection process. This runs the risk of wasting both your time and the candidate’s. The competency check should follow hot on the heels of the value-based interview. Set a challenging but not unanswerable question and ask for a short presentation. This will weed out poor performers early.
4. Get the candidate to interview you
The “Do you have any questions for us?” part of the traditional process is awkward. It also implies hiring isn’t a two-way decision. But agreeing to join a firm is more consequential for the candidate than it is the employer. A bad decision might be regrettable for the company but could be devastating for the individual. A 45-minute reverse interview demonstrates respect, allows the candidate to check fit and might even teach you a thing or two.
5. Finally, go to chemistry
One great thing about buses is that they force people into proximity. This can be a joy when the chemistry fit is great; less so when you can’t stand the sight of each other. An informal lunch or dinner is a great way to check this. Use this final stage to answer one simple question: “If we weren’t at work, would I want to have a drink with this person?” This isn’t about auditioning each other as friends. But it is about checking that you find enough value in each other’s company that there’s a reasonable prospect of playing well together on the team.
Values, competency, reverse interview, and chemistry – in that precise order – is how you fill your bus better and faster than you ever thought possible.