Is it possible to prevent, in advance, the hiring of personnel who are not suitable for a job? In the words of Greg Moran: “With the hiring technology and knowledge available today, there is no reason for any company to make a bad hire.” Industrial Distribution sat down with Greg Moran, CEO of Chequed.com – provider of the Predictive Talent Selection™ platform – to discuss how businesses can get bad hiring in check… and why going with your gut is not the only variable to consider when hiring a salesperson.
ID: In your opinion, what are the primary causes of a bad hire?
GM: There’s never one cause. It’s usually some combination of poor process, poor systems, and – more than anything else – poor planning. You look at the way most organizations go about hiring and it’s sloppy, for lack of a better word. A resume comes in, someone looks at it, they say ‘this person looks okay, let’s bring them in for an interview.’ Then they sit down and have a superficial interview and then another, they call three references – one calls back – and that’s it. Generally what it comes down to is whether they like the person or not. That is a measure of a hire, but it’s certainly not a very predictable measure. I think what an organization really needs to look at are the systems, the technology, and the process – and really design the process around three fundamental concepts:
- Can the person do the job?
- Will they do the job?
- Have they done something in the past that translates specifically?
If you can design a process around those three things, your hit rate is certainly going to go up significantly from a very unstructured process.
ID: What are the biggest costs to a business associated with turnover due to bad hiring?
GM: There are a lot of studies out there, some say that it’s one to three times salary. There are a lot of very hard costs associated with it, including replacement costs where you have to go out and re-recruit somebody, as well as training costs. But when you’re talking about sales, I don’t think those estimates go nearly as far as they need to. There are so many soft costs involved where, if you hire a bad sales rep and you miss your numbers, there is a spiral effect that starts to occur. People start to question the sales leadership and you could see turnover at that level. You could have customer relationships that suffer. The opportunity cost is absolutely massive – and the ripple effect is huge.
ID: How does Chequed.com work and how does it help circumvent bad hiring?
GM: It really comes down to planning. I haven’t found an organization yet that has a surplus of time, and what we really do is add a layer of behavioral science that’s completely tied to the job and to the culture of the organization, to really help the hiring manager – at the earliest possible stage – identify high potential candidates and weed out low potential candidates. Then as you go through the screening process, that same information can be used throughout the interview process with our ChequedInterview™ module, to create a structured interview that’s specific to the job and the culture, without the hiring manager having to do a lot of prep work. And then at the end of the process, our ChequedReference™ module drives an online and fully predictive reference check. Now you’re getting the feedback of other peers to find out how the person fits the job and the culture. It brings all of that together using an underlying component of behavioral science to make it incredibly fast, easy, and predictive of success in the job and in the company.
ID: When it comes to hiring a salesperson, there is a bit of that nebulous “it” factor – their likeability. How does this factor in?
GM: I wrote an article recently called “Hiring with Your Gut.” I think people’s gut gets a bad rap; you listen to a lot of industry psychologists and they say you need to avoid your gut, and I don’t think that’s accurate. The reality is, you’ve got to spend 40-60 hours a week with someone. You want to like them; it’s a really important part. You’ve got to use your gut but you’ve got to surround your gut with good objective information that’s relevant to the job and relevant to the culture. If you’re using the tools at the front that can identify high potentials and weed out low potentials, once you get to the interview process you know you’re already down to the candidates that are a good fit for the job and for the culture. Then, at that point, absolutely use your gut to say ‘I like this person and I have a good feeling about them.’ Then you validate that with a good reference check process. You’re just surrounding your gut with good data.
ID: Describe a few good “first steps” a business might take to change their hiring process for the better.
GM: First, figure out why your top performers are succeeding and why your bottom performers are failing. Look at that, and really identify trends in skills, experience, and competency; what are the common elements of these people on the top performing level, and are those qualities lacking in the bottom performers? You need to really figure out what that job analysis looks like, and what makes somebody successful. The second thing is to sit down, look at the screening process in a real way, and put some milestones around those three things I mentioned: Can they do the job, will they do the job, and have they done it successfully in the past? You need to really get serious about how you drive each of those buckets and design a screening process around it. If you can do that, and you understand what a job and culture fit really looks like for all your critical positions, it will go a long way to getting your screening process on the right footing.
Utilizing more than a decade of human capital management, sales and leadership experience, Greg Moran is President and CEO of Chequed.com. Chequed.com is redefining the way companies hire with a singular goal … No Bad Hires. Ever. Their Predictive Talent Selection™ platform helps leading brands worldwide make hiring more efficient and data driven through cloud-based, automated, predictive reference checking. In partnership with the University at Albany, Chequed.com works with organizations to implement best practices in talent selection, which are scientifically proven to reduce cost per hire, increase quality of hire and improve organizational productivity. For more information, visit www.Chequed.com.
