Is Who THEY Know the Best Person for YOU to Hire?

I’ll admit right now that recruiting is not my specialty.  You find them, I’ll assess them.  However, this article in the NY Times caught my eye.  It describes how some companies are aggressively encouraging employee referrals of job candidates.  While the article focuses on how this affects those who have been unemployed for a significant period of time (those without a good network won’t get referred into a company), I’m more curious about the future performance of the person referred.

There is data that shows that candidates referred by high performers are better on the job than those who are not (see Yakubovich and Lup, 2006).  Note that it’s the good performers who are recommending the best candidates (birds of a feather flock together).  However, the companies cited in the article appear to treat all referrals the same way.  I guess it would be a logistical and privacy nightmare to reward employees differently for their referrals based on their performance level.  But, I would think it would make sense to have a two-stage system where the employee is rewarded when the person is hired and if the new hire stays on for a certain amount of time and/or performs at a certain level.

Of course, having too many referred candidates could theoretically lead to problems as employees will tend to refer and hire people like themselves (see this recent post).   Though, since the higher performers tend to refer other high performers, this might not be as big of a problem as long as you have a diverse workforce in the first place.

How can HR manage referrals better?  I would think using the two-tiered reward structure I referenced above would help.  Also, recruiters should approach high performers and ask them to refer members of their network for specific positions.  When I’ve observed experienced recruiters in assessment centers, it’s amazing how few would ask for referrals from “employees” when given the opportunity.

Lastly, track the long term performance of the referred new hires.  This will help identify if they are performing better than those hired without referrals.  Tracking them will help you define which of your employees really has the great network, so you know who the “go to” people are when you are hiring for a tough-to-fill position.

For more information on skills assessment, test validation, and talent management, please contact Warren at 310 670-4175 or warren@allaboutperformance.biz.

What if Someone Doesn’t Interview Well?

Here’s one of my hiring pet peeves:  When talking about assessment, a manager says, “What if the person doesn’t test well?  Do we still have to use the test results?”  As with every question, I first try to think through why it was asked.  Had this person failed a test for job he wanted and now is doing just fine (in his mind)?  Is she afraid that using a test will prevent her from hiring the person she wants (loss of control)?  Does he just not understand how testing works?

What I want to say is, “What if she didn’t interview well, would you still hire her?”  If someone stammered or didn’t make good eye or didn’t do a good job of explaining his qualifications during an interview, would that information be ignored?  Of course not!

Unlike typical interviews, which are based on faith and intuition, results from well designed and valid tests/assessments are based on evidence.  I would venture to say that most other business decisions are done that way, so why not the hiring ones?

But, back to the issues of “testing well.”  Does it refer to a person who doesn’t do his best under pressure?  Depending on the job, I think that’s an important piece of information about the candidate.  Does it mean that she takes a longer than average to process information?  Again, that’s very useful to know.  This is not to say that every test is a perfect predictor of performance.  But to throw out the results of a valid assessment over an unsubstantiated premise makes no sense.

Without better education about validated tests, managers will always favor interviews over them.  It gives them more control over the process and put their imprint on who gets hired.  In HR, part of our role is to provide information about how the scores on valid and reliable tests accurately reflect a candidate’s skills/abilities, whether they “test well” or not.

For more information on pre-employment testing, test validation, skills assessment, and talent management, please contact Warren at 310 670-4175 or warren@allaboutperformance.biz.

This Interview is Really About Me

I’m always interested in reading about leadership and selection issues from a different perspective.  As in any field, HR (and industrial psychology) can become an echo chamber of the same ideas without generating much new thought.  With that in mind, I was fascinated by this article about interviewing and cultural fit.  Don’t be scared off because it’s from an academic journal of sociology.  The writing is straight forward and you don’t need to be a sociologist to follow it.

The author, Lauren A. Rivera, looks at the initial screening practices of “elite” law, consulting and finance firms when they are hiring new college graduates.  She originally wanted to study them regarding gender issues, but became more interested in their idea cultural fit and how it affected the firms’ hiring practices.  She describes in very good detail where these firms generally look for candidates, the process of the interviews, and how the evaluation committee (which frequently does not include someone from HR) comes to their decisions.

In speaking with the interview panel participants, Rivera reports that cultural fit is the most prominent factor in deciding whether the candidate moves on.  As she digs deeper, cultural fit (how well will this person work in our environment) doesn’t so much apply to the firms as does, “Would I like this person?”  Think about that for a minute.  This is the gateway to someone entering a firm starting at a six-figure salary (plus substantial bonuses), and the chief concern of the interviewers is whether or not they would enjoy being stuck in an airport with the candidate.  As Rivera succinctly puts it, “Essentially, they [the interviewers] constructed merit in a manner that validated their own strengths and experiences and perceived similar candidates as better applicants.”

There were many explanations for this approach to interviewing (the applicant pool was homogeneous in terms of skills, “we do a lot of training”, and [laughably] “anyone can do this job,” etc.) and it’s possible that more structured assessments would take place later in the process.  Rivera also reports that fit was more important in jobs where there was more group work involved (law) than technical work (consulting).  Only in consulting were technical skills (via questions based on case studies) evaluated at this stage, though fit was still given more weight in the decision making process.

The online comments I saw about the article focused on the skills vs. fit argument.  The bigger issue is that this process is internally focused (Would I like working with this person?) instead of externally focused (How will hiring this person improve the quality of our services?).  For firms paid for their analytical skills, it was surprising that so little of that was applied to screening prospective employees.  The point of the article was not to validate the process, but it was surprising not to hear any of the firms defending the practice based upon data (it’s possible that such comments could have been made but didn’t make it into the article).

I don’t think that the practices described in the article are unique to top flight professional services firms.  You would probably see the same thing at other firms or in other white collar industries.  In this instance, given the personal investment of the partners, it would be a huge challenge for HR to change the practice and they would have to justify the reason for it.

From a business perspective, the firms make tons of money, so there isn’t an immediate economic driver to change.  Nearly of the students described in this process will land a great job in their chosen field, so there’s not a labor market problem of the youngest and the brightest not finding work in a field that maximizes their skills.  However, what if this is not the best way to sort talent?  Would consulting Firm A be even more successful if it hired a higher percentage of the best talent compared to Firm B?  Is it possible that “hiring people like me” leads to a more engaging, but less profitable firm?  If the firm is privately owned, maybe after a certain profit level the partners value the friendship factor more than economic ones.

The biggest takeaway for me was (besides the confirmation that if you, or your child, wants a job at a prestigious firm, an Ivy League education and internships at top companies is the best way to get there) how little proven effective selection methods had permeated the firms.  This is not meant to disparage the HR professionals who work at these firms.  Rather, it shows how powerful the hiring echo chamber is.

What’s your takeaway from the article?

For more information on pre-employment testing, skills assessment, test validation, and talent management, please contact Warren at 310 670-4175 or warren@allaboutperformance.biz.

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