If you aren't using behavioral analytics in your hiring process, you're risking throwing hundreds of thousands of dollars down the drain.
When you’re scaling up and hiring new people, it’s often an exciting time. It means you’re growing as a company and expanding your capabilities.
But hiring is tricky. And a bad hire is costly. The US Department of Labor estimates that a bad hire can cost you up to 30% of your employee’s first-year earnings, while other HR agencies put the figures as high as $240,000 when you start taking into account onboarding, the hit your teams’ productivity takes, and a host of other issues.
A friend recently asked me what advice I could offer them in the hiring of a new sales manager, a critical role for the company.
I replied with a question: “Are you using any behavioral analytics?”
The answer was no. Their hiring process was predicated on strength of resume and interview.
In the quest to make the right hire, managers and CEO’s spend hours poring over resume after resume, eventually making a hiring decision based on some combination of a sufficiently impressive resume and a good interview.
And that’s the problem. That’s not enough!
Up to 85% of applicants lie or embellish their resumes in some form. And, as pointed out by the Harvard Business Review, while they’re useful for matching skills to roles, “they are poor at predicting how well the applicants will interact with the company’s culture and future colleagues.” Interviews are great, but they don’t tell the whole story either.
“While we are surrounded by a wave of new disruptive technologies and apps, HR still hasn’t improved how it evaluates the prospective workforce. Traditional hiring processes that revolve around CVs are no longer sufficient – they don’t pinpoint the right qualities demanded of leaders today, and their dated criteria obscures many talented individuals from even hitting the radar.” – HBR.org
My friend was looking for someone who could build a team, had a high drive to succeed, strong sense of urgency, and moderate attention to detail. They didn’t need CPA level attention to detail, but still high.
The problem is, salespeople typically interview very well. They tend to be likeable and outgoing and they’re always pitching, even when they’re pitching themselves! But that tells you nothing about their attention to detail, their level of drive, or how well they’ll work with your team.
“Well, that’s bleak, Tony! What can we do to mitigate all that!?”
Here’s my answer: The number one thing you need to do before you bury yourself in a stack of resumes is augment your recruitment processes to include some science-backed technologies that can help you mitigate the risk of making a bad hire.
"What does that even mean?"
At the company I lead, Roma Moulding, before we vet a resume in its entirety, we use a tool to do a behavioral assessment. We put a high value on which behavioral traits a person possesses before they even come in.
There are a lot of great tools in the marketplace for this. We use a company called The Predictive Index and it works really well for us. Their process is built on 65 years of science, and we’ve found it to be an absolute game changer.
"Isn’t that invasive, uncomfortable, and lengthy?"
Most companies that offer these tools offer a suite of predictive analytics that can be tailored to your company’s needs on everything from cognitive ability to learning styles. You can go really deep or keep it surface and adapt the assessments to the traits you consider a high requirement.
At Roma, we’re generally looking for 4-5 key behaviors. Assertiveness, willingness to try new things, probability of working well in a group vs working independently, sense of urgency, and level of attention to detail are all key factors we look at to match a candidate to a role.
We chose PI for a number of reasons, it’s quick, easy, and less invasive than some others. It’s also easily understood by both hiring manager and applicant.
We always make sure the candidate has read their results and we talk about it with them at length.
The first question is always to ask how accurate it was. The average answer is around 92% - I don’t think we’ve ever had someone answer less than 85%.
And it doesn’t stop with hiring. The PI assessments are a wealth of great information on how to work with and manage different types of people.
Because some personality types might thrive under pressure while others crumble. Some live for rules and regulations while others love to push the boundaries and think outside the box. All have their place.
These tools give you insight into a person from the get-go, and it also helps open up the conversation between manager and employee about how they can best work together.
Of course, there’s no magic formula that works every time, but why wouldn’t you put as many tools as possible in your hiring toolbox to mitigate those risks?
If you’d like to hear more from me about how we’ve used these tools with great success, please reach out! I’m always happy to make time to talk about it!