The Cost of a Bad Hire
Poor hiring decisions can stem from a range of issues: employer branding or advertisement problems, poor interviewing or an absence of psychometric test training. But what’s the cost to the business?
€30,000. At least, that’s what the US Department of Labour estimates to be the cost of hiring the wrong person on a €90,000 salary. What’s more, this figure leaves out expenses associated with a loss of team morale, wasted supervision and training, new recruitment and on-boarding fees, damage to company reputation and more. Indeed, some put the true cost of a bad hire at somewhere closer to €200,000.
So, while the importance of hiring the right employee may be clear, just how likely is it that we’ll go wrong? Well, according to research by Glassdoor, an eye-watering 95% of companies they surveyed fessed up to making at least one wrong decision each year.
As psychologists at Kinch Lyons, the science of workplace success is our business. Below, we’ve compiled a guide with our top 3 hiring tips for managers – follow these to ensure that you end up selecting the right candidate for the job.
Challenge your Checklist
You’ve analysed the job, worked out the factors to consider when recruiting employees (the job description) and now it’s time to profile your ideal candidate (the person specification). This process is the foundation stone, the linchpin of victory, the bedrock upon which all later hiring success will firmly balance. And yet, so few HR professionals give it the time it really deserves.
Hard Skills & Knowledge
Qualifications, experience, skills and knowledge; all seem quite straightforward, but are they? Does a candidate really need a Master’s degree in that area or will a Bachelor’s do? What about years of experience? Research has found that once a person has worked in an area for more than 5 years, additional years of service don’t particularly help to predict job performance. What about skill? Is Photoshop really a prerequisite or is it something you could train?
Softer Attributes and Culture Fit
What about personality, values, attitudes, motivators, interests? Do you need to hire someone that’s outgoing, decisive, creative and ambitious or are these just the strengths that their predecessor happened to have? Would your colleagues agree with your assessment of what’s needed? Have you tested that theory?
Getting these parameters right will focus your search correctly and help make sure that you’re not excluding some potentially stellar performers. Really differentiating between essential and desirable requirements and reaching a team-wide consensus about the softer attributes needed will help ensure your later selection efforts yield results.
Ignore your Instincts
You wrote up your job description, posted your ad and the applications came flooding in. You’ve screened and shortlisted and invited a selection of the most promising candidates to interview.
Many of us believe that we instinctively know how to spot a good candidate at interview. And it can be true that our instincts are a powerful source of data …. so ignoring them may be going a little far. What few of us realise however is the extent to which our automatic impulses can lead us astray and the importance of protecting ourselves from ourselves.
Some hiring managers believe that unstructured interviews, with no set format and ad hoc questioning, can allow them to get a “feel” for a candidate. Many people believe they can correctly identify who would be right for the job and who would not, simply by trusting their instincts. And yet, research tells us that these types of interviews tend to be pretty poor predictors of performance. Why?
Our instincts developed to help keep us safe, pick a mate or stay in the group by giving us a crude but instant “sense” of a situation. Stereotypes evolved to help speed up instinctual decision making about others; we subconsciously group people together in some way and then generalise our opinions to all other members of that group. These groups could be gender-based, race-based, “people that remind me of Derek” or any other category, the point is that they make general assumptions about specific traits that individuals possess which may or may not be true. This was “good-enough” for evolution, where the need for speed trumped the need for accuracy. It is not good-enough for employment and nuances that come with job competence.
How to Conduct a Fair Interview
In order to conduct a fair and effective interview we must guard against faulty conclusions brought forward by our instincts. If you like your candidate, ask yourself – am I making an assumption here or do I have some evidence? Also challenge yourself on your preferences; do I like this person because they remind me of myself (similarity attraction bias) or because we both share a love of hurling (affinity bias) or because they’re good-looking (beauty bias) or we share family values (illusory correlation)? OR do I like them because they are demonstrating that they can do this job?
Only by correctly analysing the attributes needed (Tip 1- Challenge your Checklist) and ensuring that your opinions are based upon evidence of potential to display the job-related qualities needed, will you avoid the pitfalls of prejudice.
This is why “structured interviews” are one of the best predictors of job performance.
Trust your Psychometric Tests
If you could only find out one thing about a candidate and had to make a decision based on that single piece of information, what would it be? Honesty? Organisational skills? Qualifications?
General Mental Ability: The Best Predictor of Performance
In fact, research demonstrates time and again that the best single predictor of employee performance is General Mental Ability (GMA). This is in essence, intelligence, or the speed and efficiency with which a person processes information, learns and problem-solves in new environments. In a fast-moving modern workplace, an ability to learn often over-rides what a person has learned. So while experience, skills and academic performance matter, they do not tell us about the likelihood of success in a role nearly as well as assessments of aptitude do.
GMA tests are a type of psychometric tool, and psychometrics are objective and scientifically constructed assessments that also measure psychological attributes such as personality, motivations and values. These tests allow hiring managers to make powerful selection decisions based on objective data and provide insight into candidates that usually cannot be determined through other means. They tell us about a person’s job potential and when tests such as aptitude and personality are combined, they have an unparalleled capacity to predict job performance.
Psychometric Test Training
So why are more people not using psychometric tests? One reason may be that many business leaders are simply not aware of the potential of these tools. Another reason may be certification – a reliable, valid measurement process requires that users undergo psychometric test training to use these assessments fairly and effectively. Kinch Lyons offers this certification via our online training platform. If you are interested in a BPS psychometric testing qualification, click here for more details.
Selection decisions go wrong because as fallible people, we can be crummy judges of what we need and how to identify it. Thankfully however, an entire science exists to help ensure that we can get it right. At Kinch Lyons, structured, objective processes and tools are our business, so if you have a selection or recruitment need, or would like to take part in psychometric test training, simply reach out and let us know.
Want to become a certified psychometric test administrator?
Kinch Lyons, in partnership with Podium, are offering online psychometric test training for HR professionals and business owners. Our certificate in psychometric testing is delivered using Podium’s state-of-the-art online e-learning platform, so you can complete it in your own time.
Currently, we are offering training at the Assistant Test User (ATU) (Podium Access Course Level 1) and Test User Level (TU) (Level 2). Our ATU /PAC course can be completed at any time and our next TU courses will be running from the 20th – 23rd of April 2021. Click here to sign up and be notified about these and other developments and click here to learn more about the different occupational testing levels. Upon completion of our courses in psychometric testing you will can apply for certification with the British Psychological Society and/or the European Federation of Psychologists’ Associations.