The Seven Biggest Mistakes Employers Make in Hiring

1.  Hiring anyone who walks in the door 

2.  Relying primarily on interviews 

3.  Skipping background checks

4.  Believing in ability to detect falsehoods

5.  Not Using Job Matching

6.  Overemphasizing specialized skills

7.  Ignoring EEO/AA Laws and EEOC Guidelines

 

1.  Hiring anyone who walks in the door 

Due to today's tight labor market and economic growth, many employers feel desperate just to get "live bodies" into vacant positions.  Too often this results in hiring the wrong person for the job. 

Poor or misplaced employees will end up costing you more money in the long-run (and frequently the short-run) through bad service, inferior products, theft, etc.  In terms of productivity alone, studies show that the difference between top and bottom performers is anywhere between 300% and over 1,200%, depending upon complexity of the job!  (For a complete review of this study see, "Realize Your Customers Full Profit Potential," by A. W. H. Grant and L. A. Schlesinger, Harvard Business Review, September-October 1995).

CFCM has developed a tool to let you calculate the cost of a bad hire.  You will likely find that this can range from costly to staggering, and this is if you are "lucky" enough to hire somebody awful enough to terminate right away.  Often much more damaging over the long term is hiring mediocre employees who aren't bad enough to fire, but have only a small fraction of the productivity of  top performers.

2. Relying primarily on interviews  

Most hiring decisions are made within the first four to five minutes of an interview, regardless of the length of the interview.  Managers often use their "gut feelings" to make this vital decision--and then end up regretting it. In fact, over-reliance on standard interviews only results in about a 14% success rate of hiring a star employee!  Combining  interviewing with background checks and job matching can raise the chance for hiring a star employee to 75%.  (See, "Validity and Utility of Alternative Predictors of Job Performance," Psychological Bulletin, 1984, 96, p. 90.)

3.  Skipping background checks.  

Employers are legally liable for the actions of their employees while on the job.  If you hire someone who has been convicted of a specific crime, and they commit that same crime against a customer or another employee while carrying out their duties, you can be made to pay for their actions. As a case in point, a national pizza chain and its parent company had to pay a total of $6.5 million when a convicted rapist in their employ, raped a customer while making a delivery. (See T. Farley, "Hiring rapist to cost firm, jury decides," Daily Oklahoman,  May 3, 1991.) 

4.  Believing in ability to detect falsehoods

Most business owners and managers I talk to think that because of their vast experience they are able to figure out when a prospective employee is lying or telling the truth.  The fact is this is often not the case and employers end up hiring the wrong person.  

Research suggests that the interview is a very poor means of detecting lying.  In fact, a study focused on interviewers who should be experts detecting untruths.  This study included members of the Secret Service, CIA, FBI, National Security Agency, Drug Enforcement Agency, California police detectives, and psychiatrists.  Of these only the Secret Service performed better than chance at detecting lies. (See, "Who Can Catch a Liar?" P. Ekman and M. O'Sullivan, American Psychologist, 1991, 46, pp. 913-920.) 

If trained experts can't detect falsehoods, how likely is it that a typical interviewer can?  Fortunately, there are alternatives.  Background checks, as discussed previously, are crucial.  Employers can also dramatically improve their odds of not only catching falsehoods, but in detecting applicants likely to be unethical, unreliable, or substance abusers by having applicants complete integrity tests.  Good integrity tests are inexpensive, easy to administer, and statistically validated.

5.  Not Using Job Matching

Employers frequently wish they could clone top performers.  Job matching is the closest we are likely to get to this goal.  The best way to do this is to study top performers to learn what cognitive abilities, interests, and personality factors are vital to a job.  From this, we can create a job "benchmark".  Candidates can then be compared to this benchmark.  If there is not a pool of top performers to study, we can create a benchmark by doing a job analysis.

 Job matching is vital to the success of employees, and ultimately their organizations. In a study that reviewed the turnover of more than 20,000 salespeople, several factors including gender, race, education, experience, and job matching were measured.  None of these factors influenced the turnover rate, not even experience or education, except job matching.  The affect of job matching was startling:

For a review of this study see H. M. Greenberg and J. Greenberg, "Job Matching for Better Sales Performance," Harvard Business Review, 1980, vol. 58, no. 5.

6. Overemphasizing Specialized Skills

A typical newspaper ad reads as follows:

Wanted:  Computer programmer with two years COBOL experience on a Tandem

If this company hires an average programmer with two years Tandem COBOL experience, one year from now they will have an average programmer with three years Tandem COBOL experience.  On the other hand, if they hire an excellent programmer with no Tandem COBOL experience, one year from now they will have an excellent Tandem COBOL programmer.

In today’s tight labor market, it is very difficult to find people with both the personal characteristics (abilities, interest, personality) and the specialized skills the job requires.  When forced to choose, too many employers focus on the skills.  Employers can teach skills; they can’t teach personality and character.

Experience is important, but experience is more than a set of skills.  Experience means knowing how to soothe an angry customer, manage a complex project, meet a tight deadline, motivate a diverse team, debug a complicated program, or close a major sale.  Skills can be learned in a classroom; experience is gained in the trenches.

Don’t hesitate to hire an individual with raw abilities, interests, personality, and experience to match the job, but who lacks certain key skills.  You will find this individual will learn the skills you need quickly, and will be a major asset to your organization for years to come.

7.  Ignoring  EEO/AA Laws and EEOC Guidelines 

All too many employers are only vaguely familiar with the laws of the Equal Employment Opportunity/Affirmative Action, and the guidelines suggested by the Equal Employment Opportunity Commission.  These laws and guidelines are of major importance in the process of staffing organizations.  Virtually all aspects of staffing are subject to their influence and no organization can or should ignore them.  In this case, ignorance is not bliss.   

It is extremely easy and not at all rare in today's litigious society to find oneself the target of a lawsuit because of what an interviewer thought was a witty comment or a reasonable question.  You can also be vulnerable if you do not document your hiring procedures or you do not use consistent procedures for all candidates for the same job.  For more information on how to make sure your hiring procedures meet current laws and regulations, you can view the EEOC website at www.eeoc.gov.