The Alexander Group recently hosted a Hiring Workshop featuring David Weller, Ph.D. and Principal of Leadership Alliance. The workshop included our current board member clients, their key managers and invited guests.

For over 25 years, David Weller has been helping business owners attract and retain the right talent using a science-based approach instead of just “going with the gut”. He laid out a compelling case for adding structure to the hiring process as well as boosting employee engagement and retention with a formal feedback process.

Here are some highlights of his presentation that really hit home with us:

Improve The Odds

A Study from Forbes revealed that 46% of new hires stumble or fail within 18 months. Other statistics indicate that when a hiring decision is made “from the gut”, there is about a 50/50 chance of that person becoming a long-term contributor to the organization. In other words, it is about the same odds as flipping a coin. However, when a well-designed hiring process is in place, that number can go from a 50% success rate to over 90%.

The Cost of The Wrong Hiring Decision

Experts estimate that the cost to a company of a really bad hiring decision can be 2-4 times that persons salary. The cost of a bad hire can be more than what’s obvious like retraining, relocation, and reinvesting in their replacement. A bad new employee who becomes a “toxic employee” can affect the rest of the team, lose customers, and create overall mayhem throughout the organization from inferior or incomplete work. And if the employee’s exit from the company involves litigation, the costs just keep climbing.

There is also a hidden cost in the diminished value of the “Employer Brand”. If the disgruntled employee says negative things about the company, particularly in online forums like Google Reviews or Glassdoor, it can make hiring good people to replace them that much more difficult.

Calibrate Your Company Culture First

It’s important to understand your company’s culture and the business owner’s management style before the hiring process begins. Having a good understanding of the behavioral styles of the existing successful employees can also help define the characteristics and behaviors of new people who could become key contributors to the organization in the future.

The calibration process helps to dial in what we are looking for and define the structure of the interviews.

Assessing the Candidates (Interviews)

David shared several real-world examples of mistakes business owners or hiring managers make in the assessment of candidates. For example, too often the interviewer looks at the resume for the first time right before the interview or even after the interview begins. The meeting time is then wasted just rehashing through the resume.

Interviewers can also fall into the trap of “Selling” the company to the candidate instead of the other way around. Interviewers should be talking only 20% of the time and listening the other 80%.  The interviewer also should have a clear idea of what he or she is looking for in the candidate instead of a vague, “I’ll know it when I see it”.