In my former life as a field manager and executive I would find myself working with plant locations that needed help. Maybe they were missing their sales and growth goals. Maybe they were missing their profit and quality objectives. Some were missing everything.
No two situations were exactly the same. But they all had two things in common… poor employee relationships and poor hiring and staffing decisions. When these combined, the locations were always characterized by high employee turnover. I learned very quickly that if we solved the hiring problems and improved employee relations, we nearly always cut employee turnover in half.
Cutting employee turnover has an immediate impact on operating costs. Expensive employee replacement costs are drastically reduced. Costly mistakes made by new employees nearly disappear. Lowering employee turnover allows managers to spend more time working with customers and coaching employees instead of recruiting and interviewing. Quality improves which reduces service costs and makes for very happy customers. What I didn’t know at the time, because of our accounting methods, was the impact that lower employee turnover was having on healthcare benefit costs and other operating problems related to health issues – like presenteeism and absenteeism.
Leaders have the responsibility to develop peak performing, “winning” teams. Whether we are running a small business or a department with a few employees – or a large operation with hundreds – the responsibility of developing people and improving performance is the same. Great leaders make good hiring and staffing decisions. They consistently select the right people for the right job. https://www.froscharff.at/
Who we hire has more to do with the ultimate outcome of performance than anything else we do as leaders. More than anything else, our hiring practices and personal hiring skills impact our team’s success…or failure.
A poor hiring process increases employee turnover, which is death to any initiative to improve productivity. Bad hires don’t last – they leave or are asked to leave. Sometimes they leave when they realize they don’t like the job, the company, or the people. In these cases, the new hire “fires” the company. They’re asked to leave when they can’t learn, won’t learn, commit some violation, or demonstrate some character flaw. Then the company fires them. Under weak management non-performers linger on to become “deadwood”. In any case, they were miscast, and set up for failure from the beginning. Whose fault was that??
In most cases the company. The company may not have developed a hiring process – or the people using the process didn’t do their job. In the final analysis, a recent hire is out of work and going through the trauma and stress of job change, because of your mistake!
ATTRIBUTES OF COMPANIES THAT HIRE WELL
Many years ago I was asked to put together a standard hiring process and a training program to teach our managers how to use it. This was a major project and ultimately contributed to one of the paradigms enabling the corporation’s dramatic growth at the time. We all knew the problems created by poor hiring. If we were going to accomplish our ambitions, hiring well had to become one of our basic corporate competencies. With the help of the C.E.O., I was afforded the opportunity to visit several corporations noted for their excellent management teams to learn about their hiring and development processes.
I returned from each trip with fresh ideas about how to hire effectively and systematically. I learned about hiring processes, hiring tools, carefully honed interviewing skills, and much more. All of this information went into developing a hiring system of our own, which we called “Meticulous Hiring”, that is still in use today.
The systems and processes we developed had an immediate impact on the quality of new hires and early management turnover. The point is that effective systematic hiring has a huge impact on growth, profitability, turnover, and management development
While talking to managers and executives of the companies I visited, and observing their practices, I noticed some similarities in their views and attitudes about the importance of hiring well. These became the five guiding principles of hiring that we taught every manager, and that I still teach clients today. Companies committed to hiring well have certain common attributes….
Hiring is a disciplined process: Every company has certain processes critical to their business that are rigidly enforced. There are consequences for employees not in compliance with those processes. While hiring is arguably one the most important activities performed in a growing business, many companies do not approach it systematically. They have established procedures for processing orders, invoicing customers, handling collections, and even enrolling employees in their healthcare plan. But hiring is not done systematically. The function is – well… kind of ‘helter-skelter’. Every hiring need is handled in a different way with managers espousing their pet theories on how it should be done.
Great companies have effective hiring processes and like other important processes, they are rigidly enforced. There are consequences for managers not in compliance with the system. Great companies recognize the importance of hiring systematically and believe that hiring well is a key component of their strategic plans.
Hiring Standards are aligned to business strategy: Great companies have defined job requirements and hiring standards for every key position. They know what they’re looking for in candidates. They have identified and defined the key human skills and characteristics needed to succeed and help the company accomplish their objectives.
Aligning hiring standards with your business strategy avoids hiring mistakes and misfits. For example, suppose that K-mart is looking for a Vice President of marketing. And, let’s suppose they learn that the Vice President of marketing of Nordstrom might be available. What would happen if they successfully recruited and hired the Nordstrom executive to run their marketing efforts? Do you foresee any problems?
Of course there would be problems. While both companies are in the retail merchandising business, they have totally different business strategies. K-mart has an effective discount self service strategy. Nordstrom markets to customers who demand individual service and high-end products. Here we have two successful companies in basically the same industry, but with totally different cultures and methods of operating. The new K-mart Marketing Vice President would likely have a problem adjusting to their self service strategy and culture.