What is the most important buying decision you’llever make? When youchoose a new site? Buying category management software?Adding a carwash? Does somethingelse come to mind?
Well, no matter what it is for you, there is a well-defined, proven systemthat ensures you make the best decision and get the most value in returnfor your investment. It’s in use everyday, worldwide to purchase everythingfrom paperclips to airplanes. And yetthis proven system is routinely ignoredwhen it comes to making the most important buying decisions any business ever faces—who gets hired.
A couple of reasons for this oversight come to mind. The first is thatfew business leaders realize that thestandardized principles and practicesthey already use for purchasing andprocurement also comprise an efficient,effective employee hiring system. Alsoat play here is a reluctance to systemizehiring in the mistaken belief that it’snot possible to choose human capital inthe same way we acquire other products and services. This is why most hiring decisions still hinge on the result ofgut-instinct interviews—in spite of thefact that interviews are scientificallyproven to be only 8% more reliablethan flipping a coin.
Could this reluctance to systemizehiring be why hourly employee turnover rates are so high, and turnover in the management ranks is creepinghigher every year? When the continuity of employees is key to developingthe kind of relationships and servicethat earn customer loyalty, how doesthis bode for the future of yourbusiness?
It’s time to take a page out of yourpurchasing procedures manual andstart “buying” employees with thesame care and concern as you procurenew equipment.
Spell Out Your PurchasingSpecifications
Be it a soft drink dispenser or a newstore associate, you can’t get what youneed if you don’t know exactly whatyou need it to do. Your purchasingspecs for that new employee should gobeyond the basic job description andspell out:
The mental and physical capacitiesneeded. Do you need a rocket scientistor someone with a GED? Does theapplicant need to be able to leap tallbuildings in a single bound or juststock the top shelf?
The innate attitudes that ensurethe employee likes the job and yourcustomers like the employee. TheHarvard Business School determinedthat the four major factors critical tosuccess on any job are: information,intelligence, skill and attitude. Of thesefactors, they found that the first threeaccount for only 7% of success, whileattitude accounts for the remaining93%. Let’s face it; the quality of anorganization can never exceed the quality of the people who make it up.That’s why savvy employers hire forattitude and train for skills. Askyourself, does the job call for a patient person who enjoys helping people or an assertive, energetic go-getter?
The personality traits best suited for the job, your location and the corporate culture. Is the company rigid or relaxed? Does the job call for a person who is competitive or a team player?The person who does the booksshould have a natural propensity forattention to detail. Your managers andplanners should be big picture thinkers.
The specific skills you need. Doesthe ideal candidate need to be bilingual? Able to do data entry? Operate aforklift? If the answer is yes, design atest to make sure you get what youneed. Just remember, hire for attitudeand train for skills. While you can’ttake the time to teach someone tospeak Spanish, it’s worth it to train aperson with a great attitude in dataentry.
With the specifications in hand, thepurchasing agent issues a Solicitation ofInterest to find out who might providethe required products or services. Thisis analogous to advertising your jobopening and, just like a good purchasing agent, you should use every possible resource. Ask for referrals from employees, customers and vendors.Advertise on job boards, on yourWebsite and in the newspaper. Call thegood people who used to work for youand see if they might want to comeback. (The worst they could say is “no,” and then you can ask if theyknow of anyone who might be interested.) If you always need new people,put in a 24-hour job hotline or an instore employment kiosk, sign up forjob fairs, rent a billboard, work withlocal schools or create a radio jingle.
Evaluate Bidders’ Qualifications
In the purchasing world, a qualifiedbidder is “an entity that has the capability in all respects to perform the contract requirements.” In the hiringworld, this is the heart and soul of aneffective and efficient employee selection system. It comprises a series ofsimple, logical steps that reduceemployee turnover by ensuring betterhiring decisions.
The first step is a telephone prescreen to determine if applicants meetthe most basic hiring criteria. There’sno point in taking the time to see anyone in person who doesn’t pass thisscreening step.
For those who pass the pre-screen,conduct the appropriate tests to determine if applicants meet the rest of therequirements called out in your specs.The first tests are for the required skillsand capacities. Create and administer amath test, or give the delivery truckdriver applicant the wrong address andsee if he still shows up on time.
For those who pass this screen, standardized attitude and personality testsare also widely available to more narrowly identify those people best suitedto the job.
Issue Your Request for Proposals(RFP)
At this point, the purchasing agentinvites qualified vendors to submittheir proposals. Similarly, you haveidentified a group of people you wantto invite in for the big test: the interview.
There are several steps to conducting an effective interview, and the firstis to tell the applicant up front what isgoing to happen and what you wantthem to do. Above all, you want theperson to be honest with you. Youcan accomplish this by sayingsomething like: “I’m going tobe honest and open withyou about this job andabout our company, and Ihope you will be openand honest with me. Itdoesn’t matter if you’veever been fired or hadtrouble with a boss oranything else. As long asyou tell me, we can take itunder consideration. But, if youdon’t tell me and we find a problemwhen we run a background check, Ican’t hire you. Do you understandwhat it is I want?” Now the applicant ispositioned to tell you the truth whenyou start asking questions.
The interviewers who get the bestresults use structured interview question sets. By asking every applicant thesame questions, they’re able to compare apples-to-apples and make the besthiring decisions.
Conduct Your Bid Analysis
Now our purchasing agent will enterall the information from the proposalssubmitted into some kind of spreadsheet in order to analyze the data andmake a decision. This is where yougather up all the information you’vecollected about each applicant you’veinterviewed and do the same.
When making a final decision aboutwho to hire, there are four things toconsider in your analysis:
- Test results should count for 30%
- The interview should count for 30%
- References should count for 30%(once thoroughly checked)
- Your personal perception shouldcount for 10% (because no matter howhard you try to eliminate your biases,they may still be there).
If the applicant scores poorly on anyone of the criteria, it’s worth 100% andeliminates the applicant. On the otherhand, a fantastic rating in any one ofthese areas can’t, on its own, get someone hired. When you find good-to-great ratings in all four areas, you’vefound the right person for the job.
Make the Award & Letters ofRegret
At this point, our purchasing agentmay
issue a contract to the winningbidder. This document will spell out allthe terms and conditions as well as therights and obligations of both parties.The applicant’s signed and datedemployment application form shouldcover all these issues, however, whenyou “award” the job you’ll want tospell out a few things to avoid the misunderstandings, disappointments andassumptions that can lead to that person walking out on you or terminationfor cause.
First, tell the successful candidatewhy you chose him or her. Explainhow the person’s capacities, attitudes,personality traits and skills are a goodmatch for the job. When you setexpectations early in this way, the person will either meet your standards oropt out by declining your offer.
Second, make sure the personunderstands all the terms and conditions of the offer: the position, earnings, start date and any contingencies,like a drug test.
Third, make sure the person knowsthe grounds for termination by reviewing all job-related rules. Finally, don’tforget to notify the other candidatesthat you have decided to hire someoneelse. Thank them for applying and thetime they invested and wish them well.You don’t want to create bad feelings inpeople who could be customers orhave friends and relatives who couldbe customers or vendors.
Every job applicant knows your jobis to “buy” the best applicant you can. Do what works. Use purchasing policies and procedures to decide who gets hired and watch your organizationthrive.
Certified Speaking Professional Mel Kleiman is North America’s foremost authority on how to recruit, select and retain hourly employeesand president of Humetrics. Founded in 1976, Humetrics providesselection and retention tools as well as speaking, training and consulting services. Mel is also the author of five books including the bestseller, “Hire Tough, Manage Easy.” For more information, visit www.melkleiman.com. or call Humetrics at (713) 771-4401.