Finding the right people is never easy. With the right data, science and technology, talent decisions become easier and more accurate.
Hiring employees, whether it’s from the wider labor market or from within the organization, is the most common HR tasks, yet even the most successful leaders and managers often admit they make bad picks. Why is this and what can be done to improve hiring decisions?
Decades of evidence shows science-based assessment tools are more reliable at finding the right candidate and shaping their development, but their use is not being maximized. Our latest Global Assessment Trends Report shows that while 94% of companies agree that testing candidates is a valuable part of the hiring process, two in five companies are not using assessment in their external hiring programs.
This matters for a number of reasons. Research indicates when long-term corporate revenue stalls a talent gap is to blame in more than half of cases. According to Gartner, one in ten instances was due specifically to a gap existing on the leadership bench. On the flipside, organizations with the strongest leaders have nearly double the revenue growth compared to those with weaker heads.
The Mistakes We Make
So, what are hiring managers getting wrong?
Mistake #1—We refuse to admit we need help. No matter how much one tries to avoid it, everyone carries around bias about people, roles and cultures. It might be that your perception of a candidate is skewed or your idea of the demands of a role.
Another example is when a business has grown rapidly and managers have a warped notion of its size. It can be hard to grasp you can’t gather the team in one room to thrash out an important issue. This distortion could result in the wrong things being prioritized or certain attributes of a job being misrepresented to an applicant. Perspective is necessary.
Mistake #2—We overestimate our judgment. Most businesses make new hires each year, but some bosses think their instincts for, and experience of recruiting people makes them a good judge of people.
Through SHL assessment platforms, we evaluate ~30 million people every year. Combining assessment data with broader analysis of people, jobs, the business context and outcomes, the odds of making a good hiring decision are vastly improved compared to human judgement alone.
Mistake #3—We can be out of touch with labor market realities. Labor markets are dynamic and often hiring managers can struggle to keep up with changes. Missing the mark on a job description or incorrectly prioritizing the attributes required, so attracting the wrong type of talent, can have disastrous consequences. If you’re aiming at the wrong target, you’re guaranteed to make a bad hire.
The good news is help is at hand. There have been huge advances in behavioral economics and psychology. Couple this with sophisticated talent decision tools and people analytics and those working in recruitment and development can improve in the following ways:
• Better document the key factors of a role and prioritize attributes accordingly
• Measure skills, cognitive ability and behaviors
• Match key behaviors against outcome data
• Target and remedy skill or competency gaps
• Measure the impact of different training platforms
• Gain better access to non-traditional profiles for roles
• More precisely understand labor markets
These tools can’t create a perfect hiring manager. But, with a holistic view of people’s strengths, areas of development, motivators and work preferences, it’s possible to make better decisions. More people from different backgrounds getting into the right roles more often. Then, there’s the cost advantage – less money wasted on bad hires, plus minimizing the human cost for the team affected and the person who is miscast.
Hiring people will never be easy. But applying tried and tested objective tools and rigor to the process will only help managers, candidates, companies and the economy alike.