Kick the job candidate out of your office

Kick the job candidate out of your office

Question

The current employment climate seems to be the new normal. At my company it’s just very difficult to get new hires. There’s a lot of speculation about why the labor market is so tight, but no one has really identified the reason. (Do you have any ideas?) That’s why I’m reconsidering how I interview a job candidate. Once I get them to meet with me, I want to optimize my chances of actually getting them on board, assuming they’re the right person! The traditional interview just doesn’t do it. Can you offer any tips on how a manager can run the job interview for a better outcome? I can’t afford to keep wasting good applicants! If I can pull this off I’ll be a hero. Thanks.

Nick’s Reply

job candidateI like a manager that realizes it’s time to upend the recruiting, interviewing and hiring process. My compliments. (We covered your question about why it’s so difficult to fill jobs and hire people in last week’s edition.)

I think what motivates a good candidate to want to work for you is the depth of the interview experience. Most interviews are superficial, canned, and uninspiring. If you can make your meeting truly engaging and memorable, I think you increase your chances of an offer being accepted dramatically.

Don’t interview in your office

I’ll offer you a specific tip that may help, and my guess is your HR department has never suggested it. The method is to break the script of the traditional interview entirely. The objective is to relax the job candidate so you can assess them more effectively, and to make it easier for you to get to know one another better in a realistic work context. I think this leads to wiser decisions about working together.

Note: I’m not going to give advice limited to our “virus age.” I know much interviewing during this time is done as remotely as some jobs are. In-person interviewing and hiring will return. These ideas can fit in either case with a bit of bending and twisting. Let’s discuss how in the Comments section below!
The first thing to do once you and the candidate have met is to kick the candidate out of your office! Yup — I’m serious. The worst place to interview anyone is in your office. Why? Because it’s a sterile box that’s removed from the action. It’s not where you’re going to learn whether they can do the job. And it’s not where they’re going to learn what they need to know to take a job with you.

Take the job candidate for a walk

When the candidate arrives for the interview, don’t sit down. Walk out of your office and take the candidate out onto your work floor. Whether it’s a marketing department or a production plant, start by introducing the candidate to your staff and showing them the work. Let them see your department. Show them the tools you use and the products you make. Let them meet your people. Encourage everyone to start talking and asking questions.

Encourage everyone to talk shop.

This way of assessing a candidate will quickly reveal to you why traditional interviews don’t work.

Traditional interviews don’t work

Typical interviews are indirect assessments, where you and the candidate spar over the Top Ten Stupid Interview Questions. What I’m suggesting is a hands-on experience where the focus is on the work of your department — and where you can directly assess the candidate’s personality, skills, attitude, smarts and fit with the job and your team. For example:

  • Show the candidate your products (discuss how the job affects product quality, delivery, etc.)
  • Show the candidate the tools they would use (see what they know about how the work is done)
  • Have the candidate sit in on a “live” work meeting (observe how they participate)
  • If there is a company cafeteria, take them to lunch, where they can meet loads of other employees (do they click?)
  • Introduce the candidate to managers and staff in departments “upstream and downstream” from the job they’d be doing, so they can see how their work would fit into the business (does the candidate understand the business?)

You will learn more about the candidate by exposing them to the rest of your team than you ever could by sitting in your office. You’ll learn how smart and how motivated they are by how they interact with you and your team, by the questions they ask, by the opinions they offer and by the skills they demonstrate. If you’ve really got a gem of a job applicant, they will dig in and show you how they’d do the job. You will also learn very quickly how they fit in with your other employees.

Help the candidate decide

If you’ve got a good job candidate, this approach should give them many data points, in a real, live setting, to help them decide whether to join up. Of course, this requires that you’re offering them a good job working with good people in a healthy company!

I call this Interviewing By Wandering Around™. When the job candidate and the manager are in the middle of the work, everyone relaxes and it’s easier to talk about what matters because there it all is, right in front of you: your business. A bonus is that no candidate can fake it in front of you and your entire team. There are no clever “behavioral interview” questions or answers to memorize.

Of course, if you have standard interview questions you like to ask, you can still ask them during your “cook’s tour.” But I’m betting some of those questions will suddenly seem silly to you. Why ask what a candidate did last year, when you can let them show you how they’d do this job now?

Kick the candidate out of your office if you want to entice them to come work with you. Show them around. I think you’ll both learn a lot about one another and your workplace.

Do traditional job interviews work? How about behavioral interviews? A job candidate often walks away from even a successful interview still unsure whether they want the job. What has a manager done to make you want to join up? How could my suggestions be applied if your interviews are not in-person?

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Every job is one job. What’s its title?

Every job is one job. What’s its title?

Question

You write in one of your articles, “If the employer could avoid hiring you or anyone else, he would. He doesn’t want to create a job. He wants to produce more profit.”

While that may be true for some employers, or at least for sales jobs, I have my doubts it is true for even 20% of the jobs out there.

profitable workIn my opinion, most jobs exist to solve a problem, but that’s not always “to increase the bottom line.” Sometimes these problems are just mindless corporate B.S. Sometimes a hiring manager just needs a “warm body” to dump stuff on. Sometimes hiring managers don’t want a superstar. They’re happy with a mediocre person, for whatever reason. Sometimes managers are looking to hire simply because they have a budget and get a massive ego-boost saying they are responsible for X number of people, or doubled in size in a few months, etc.

For example, a publicly owned company is rarely looking for talent that would increase the bottom line. Who cares? The company isn’t owned by anyone; it’s owned by the public, so let’s milk that baby while I can, while I am in my seat, and just do what’s going to fly so I can stay in this seat as long as possible.

I offer no conclusion. Perhaps I am only rambling, but my point is, yes, I agree with you, there is a reason to be hired, but “to produce more profit” is rarely the case and just one use case. Think of a technology manager that is expected to build a product. He just wants to hire capable people, and doesn’t care about profit. If an engineer comes in and shows the hiring manager he knows his stuff, he is hired. If that engineer on the other hand comes in and starts talking about increasing the bottom line, the manager will just think, “Who the hell cares? I just need a guy that fixes my scaling problems!”

Anyway, this is just my two cents. I believe that, for jobs like sales, “increase profit” may be a more common goal. But in jobs such as technology, consulting, and back office? Meh.

Nick’s Reply

You raise a really important issue that I wish the entire business world would face head-on: Why do we hire people? I think that businesses with more than about 20 employees forget the real answer to that question because they forget why they exist. They forget what everyone’s job really is.

What you say is entirely true. Most jobs are created and filled for reasons that have little or nothing to do with producing more profit. You’re right! A job seeker doesn’t need to address how they would add profit to the bottom line, and they can still get a job.

The manager’s “requirement” might be nothing more than using up the hiring budget, or to hire a “go-fer” to do menial tasks, or to boost the manager’s ego by increasing the size of the operation.

Profitable work

So, why do I harp on this profitability component when job hunting or hiring?

Here’s the best way I can express it: Every job exists to create an outcome that has more value than what was put into getting it done. We don’t start an enterprise to squander money, effort or other resources. We dedicate ourselves to doing profitable work.

If a job does not contribute to a company’s bottom line, or profit, it should not exist. (Of course, many jobs don’t meet this criterion.) If you cannot explain or show how your job (and the work you do) affects profit, you should quit before you get fired for being superfluous. If a manager does not understand how (or whether) a position under their auspices affects company profits, they should eliminate the job.

(Profit can be measured in dollars, customer satisfaction, repeat business, quality or any metric that shows a business is meeting its objectives. The work must yield more of something desirable than is put into it.)

I believe loads of unprofitable jobs continue to exist because most companies are so out of control that they stopped considering profitability at the job level. That’s a huge mistake that I believe is at the core of our economic woes. Every job must, in its own way, help produce profit. The kicker is, managers and employees must understand how.

Are you revenue or cost?

Business guru Tom Peters once suggested that a company larger than 11 employees was untenable. He later upped it to 25. He reasoned that 25 people all know what everyone else is doing. They all feel responsible for and accountable to one another. It’s pretty easy to see how each contributes to success and profitability. When a company gets bigger, accountability is diluted. There’s more chance marginal workers will be hired, unnecessary jobs will be filled, and that some employees will not do their jobs.

As you put it, the attitude becomes, “Who cares? The company isn’t owned by anyone; it’s owned by the public, so let’s milk that baby while I can.”

As you also point out, the connection to profits is rather obvious with sales jobs — but that’s only because we associate revenue with profit. People that work in jobs like manufacturing or shipping will claim they have nothing to do with revenue or profit — they’re overhead cost. But every job affects either costs or revenue (or both). That means every job affects profit because every job is a company’s attempt to prosper more.

What is profit?

The profit equation is simple:

REVENUE-COSTS=PROFIT

An accountant or finance person might scoff at that because, of course, each of the terms on the left comprises many factors. But in general, that’s the accounting.

If your job (e.g., sales) seems to affect mostly revenue, you’re more likely to understand your role in profitability. If you work in quality assurance (QA) or on the computer help desk, it’s easy to see how your work represents a cost to your employer. However, all those jobs affect the equation. Do your job thoughtfully and well, and you help increase revenues or decrease costs — hence you help boost profits.

If a help desk worker can successfully close more problem tickets, that brings costs down. When a QA engineer examines a product design more effectively, costly failures are reduced. When a salesperson closes more sales by developing more product expertise, that boosts revenues. All three employees have affected profits.

The challenge, of course, is how do you calculate your impact on revenues and costs? Few companies understand how every job impacts the bottom line, as if it doesn’t matter. Many can’t even track P&L (profit and loss) of entire divisions or departments, much less individual workers.

That’s why their hiring practices are so screwed up.

Foolish ignorance

That’s what’s wrong with business. This is a big reason why companies fail. It’s also why good workers get laid off and why mediocre job candidates get hired. It’s why companies often have open jobs that shouldn’t even exist. But, rather than sit down and work this out, most companies prefer to remain ignorant of what is perhaps the key metric of success. They find it easier to “throw bodies” at nebulous “problems.”

That’s foolish.

If you and your manager can’t explain how your job contributes to the bottom line by reducing costs and/or increasing revenues, you’re revealing a dangerous kind of ignorance. Neither one of you is going to have a job for long. You may be able to “hide” for a time, but not forever. My suggestion is, go meet your company’s Chief Financial Officer (CFO) and ask for some insight on how your department affects the bottom line. Then discuss how your job affects it. When a company’s total bottom line shrinks or goes negative, it’s because nobody’s watching whether divisions, departments, teams, managers and individual workers are doing profitable work. How your CFO responds may tell you a lot about the prospects of the company.

Every job is one job

Why do companies hire? Despite how critical a factor profitable work is to a company’s success, most companies don’t care whether a job candidate can show how they will contribute to the bottom line. They hire blindly. Most job applicants don’t care whether or how the job they’re interviewing for contributes to the success of the whole. This makes a fool of the manager, the job seeker, the company, and its investors.

So in response to your suggestion that we need not worry about who does or doesn’t do profitable work because employers don’t — I say we do. Fundamentally, every job is really the same job and its title is Profit Maker. Companies should hire only to fill such jobs.

Our bottom line here is this: Why would any job seeker want to throw their lot in with a manager and a company that doesn’t understand or measure whether a job is profitable? It’s a slippery path to one dead-end job after another, and ultimately to a failed career. For a company, it’s one of a thousand cuts that leads inexorably to bankruptcy.

And it all starts with understanding the purpose of a job.

When managers roll their eyes at a job candidate (or employee) who cares to discuss how a job contributes to profit, that’s a signal for the candidate to walk out of the interview. That’s a signal to go find a better-run company that’s going to blow the manager’s company out of the water.

Is it wise to accept a job when you don’t know how it contributes to the company’s success and profitability? Is it wise to hire someone without exploring how they can help make your company more successful? How would you explain your job’s contribution to your employer’s bottom line?

Challenge: Can someone explain how all this is true for non-profits, too?

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Predictions for post-pandemic job market

Predictions for post-pandemic job market

A reader asks what will be different in the job market in the June 30, 2020 Ask The Headhunter Newsletter.

Question

The coronavirus pandemic is a game-changer for the job market. What changes do you see coming in the new normal? Any tips on how to be one of those who can get a job again as things open back up?

Nick’s Reply

post-pandemic job market

This could be a long discussion! I’ll try to stick to a few points that I think I’ll be able to defend when the discussion starts in the comments section below. I can’t offer much evidence yet, but my gut tells me employers will be more selective when hiring going forward, so you will have to adjust your job-search methods accordingly.

Why?

Selective hiring in post-pandemic job market

Over 40 million people have lost their jobs and filed for unemployment since the pandemic began. That’s a lot of jobs. I don’t think it’s hard to predict that when employers start hiring again they will re-fill only a portion of them.

It seems Federal Reserve chairman Jerome Powell agrees. He recently told a gathering of bankers there will be “well into the millions of people who don’t get to go back to their old job. In fact, there may not be a job in that industry for them for some time.”

Employers will have to be more selective simply because they won’t be able to hire as many workers. The reason is elementary: In the post-pandemic job market, companies will have to save money, many of them without choice.

Managers will do their own recruiting

Wharton labor researcher Peter Cappelli has pointed out that modern corporate accounting systems treat vacant jobs as a reduction in costs, and thus as an increase in profits. My good buddy Jeff Pierce, an executive in the IT services industry, calls this “junk profitability.” I think he’s right.

UPDATE: The Economic Policy Institute reported on June 29, 2020 that Nearly 11% of the workforce is out of work with zero chance of getting called back to a prior job.

“Of the 164.8 million workers who are either in the labor force or who have dropped out of the labor force as a result of the virus, 11.9 million workers, or 7.2%, are out of work with no hope of being called back to a prior job; 5.7 million workers, or 3.5%, expect to get called back to work but likely will not; and 14.8 million workers, or 9.0%, may reasonably expect to be called back. In other words, even if all workers who can reasonably expect to be called back to their prior jobs were called back, the share of the workforce out of work would still be 10.7% (7.2% plus 3.5%), higher than the highest unemployment rate of the Great Recession.”

As businesses try to recover, I believe they will spend less on staffing. But managers will likely face the same, if not higher, productivity expectations. Managers will have to operate on lower staffing levels, and this will force them to step up to the challenge by hiring more carefully.

I think the best managers will handle more recruiting on their own because they know HR has no skin in the game. Fed up with HR organizations that have always shoveled the wrong candidates into interviews, managers will rebel. They will take hiring into their own hands because not to do so could risk their own jobs.

Job seekers who’ve got game will prosper

Employers will invest their salary budgets prudently and selectively. I believe managers will be much more receptive to job candidates who walk into an interview and demonstrate, hands down, how they will do the work and do it profitably.

In a recent article, Job Search During The Pandemic, Jason Alba suggested that job seekers need to be on their best game: “The pandemic makes it necessary to do more of what we know works best.”

This means:

Job ROI will matter

The University of Chicago’s Becker Friedman Institute projects that up to 42% of the pandemic-related layoffs in the U.S. will be permanent. If you are a victim of these cuts, how will you position yourself for a new job?

If managers have less money to spend, they will monitor hiring ROI (return on investment) much more closely. Every hire will matter more. This means what you can offer employers in the post-pandemic job market will matter more.

I think this will be a smart employee’s market where the best workers will pursue jobs where they show how they’ll make a difference — and thus be able to negotiate good compensation packages. Job seekers who keep dialing for dollars by playing the numbers game with job applications will lose.

We’ll see if I’m right. Now let’s hear everyone’s comments.

What are your predictions for the post-pandemic job market? How will the massive, pandemic-related job cuts affect your ability to get — or to fill — a job? Will those jobs ever come back? What will make you worth hiring in the new economy and job market?

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Which managers hire the best?

Which managers hire the best?

In the June 9, 2020 Ask The Headhunter Newsletter a manager asks how managers hire.

Question

managers hireWhen you’re hiring, how do you know who you want to hire? By that I mean, how do you identify the job you need done, the skills and potential for growth you require in a job candidates? I admit I’ve made some hiring mistakes as a manager, but it’s awfully hard to pinpoint what I’ve done wrong. It’s just as hard to figure out what I did right when I picked my best staff members!

Nick’s Reply

I don’t think the problem for most managers is knowing what they want. If they don’t know what work needs to be done, they have no business managing.

Managers hire for profit

If you have doubts about what a job is all about, here’s a good test: It must involve work that is profitable to the company. If it’s not profitable, question the legitimacy of the job.

Of course, this means you must understand how the work of each one of your employees fits into the big profit picture. Most managers I’ve said this to roll their eyes and tell me they’re not finance managers and it’s not their job. If they really believe that, they need to sit down with their company’s CFO and figure it out. Profitability is every manager’s job. Or, why are you even a manager?

The problems with hiring

But let’s focus on hiring.

I think the challenge for most managers lies in the faulty hiring process they’ve been taught. This process emphasizes talk rather than demonstration, and personality rather than ability. It hampers their ability to hire well.

There seem to be two main problems with how managers hire.

Problem 1: Hiring to the job description

Most managers know what they need to get a job done. However, they are usually saddled with over-written, static job descriptions that better serve the requirements of a Human Resources applicant tracking system (ATS) than the ever-changing needs of their company.

Don’t believe me? Is your own job and the work you do today the same as your original job description? How much has your job changed since you started it? (I’ve asked this question of hundreds of times. All I ever get is bitter laughs.)

When a manager interviews to fill the job description, that may satisfy HR. But is it going to meet the manager’s changing, evolving needs? Worse, is HR sending candidates to the manager just because their resumes and applications contain words that match words in the static job description?

Hiring to the job description is a mistake. (The problem of job descriptions themselves is for another discussion.)

Problem 2: Managers hire people they like

Generally speaking, managers are schooled by HR experts in the art of interviewing, if they’re schooled at all. But, what does HR know about hiring anyone but HR staff? HR is not schooled in specific work disciplines like engineering and marketing. Consequently, HR’s interview instructions tend to emphasize only general attributes, mostly relating to personality and attitude.

Managers that know what they want often don’t dare ask candidates to deliver it because to do so would violate the traditional rules of interviewing. Whoever heard of putting a job candidate in a room with all the tools they need and asking them to demonstrate how they would do the job?

Instead, managers learn to sit and talk banalities with applicants. Even managers who know what work they need done end up hiring workers based on irrelevant rules and criteria that have been hammered into their brains by an antiquated and ineffective employment system.

An executive of a multinational telecommunications firm complained to me that his company keeps making the same mistake. “We hire based on personality,” he said. “More specifically, we hire people we like because the interview methods we use don’t really reveal whether the person can do the work.”

Put another way, managers focus too much on who they want, rather than on what work they need to have done. “To hire” does not mean to acquire a worker; it means to acquire the use of (that is, pay for) certain services to get certain work done. The focus must be on the person’s services and on the work. Unfortunately, most managers have absolutely no concrete proof that a job candidate can do the necessary work until after they hire them to do it. This never comes up in the interview, because the manager is too busy trying to “assess the candidate.”

Can the person do the work you need done?

The hiring process has become warped into a personality assessment. Consider the common questions asked in interviews: What is your greatest strength? Your biggest weakness? Where do you see yourself in five years? Such questions are so general and meaningless that hundreds of books are available to teach you how to respond with equally trite answers. But what has any of this to do with the work a manager needs done? Next to nothing.

In what I call The New Interview, the manager and the candidate work together on a “live” problem or task. This maintains a focus on the work that needs to be done, rather than on the keywords in a job description. The best example task is one that clearly affects the profitability of the department. My guess is that, if you were to review your interviews against the success of your hires, either you’ve just gotten lucky some of the time, or your best hires actually showed you they could do the work.

In my experience, if an interviewer conducts such a working meeting with sleeves rolled up and focuses on an actual work task, the candidate will quite naturally reveal their personality, attitudes, skills, growth potential and “fit” on other scales. It comes out in the conversation and in the shared experience of working together during the meeting — just like it does at work. No clever interview questions are required. (You’ll still learn whether you like the candidate, but your opinion will be based mostly on whether they can do the job!)

What’s a manager’s job?

If you’re a regular reader, you’ve heard me say this before. A good manager should be spending 10-15% of their time every week identifying, recruiting and cultivating people to fill current or future positions. Hiring is a key management function and you need to develop your skills to do it well.

A job candidate must be able to do the work. If you don’t — or cannot — directly assess this, why are you even a manager? I mean no offense, but I suggest you think about it.

If you’re a manager, how do you hire? Do you put 10-15% of every week into hiring? Who was the best “hiring” manager you’ve ever known, and how did they do it? What are the worst hiring practices you’ve encountered?

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Open Mic: Got a job or hiring problem?

Open Mic: Got a job or hiring problem?

In the April 7, 2020 Ask The Headhunter Newsletter I invite you to ask your own job search or hiring questions. It’s open mic!

open micSpecial Edition

Every week I answer one question from a reader in the traditional Q&A format. In this special edition, the mic is open to everyone — we’re going to tackle any questions you post. (Yes, we.) All the questions. (Yes, all.) Just post your questions in the comments section below.

Open Mic: You’re on!

The open mic idea stems from webinars and live conferences I do for professionals where I make a brief presentation, then we open it up. Anyone may ask any question about job hunting or hiring (or about work), and I do my best to provide useful advice on the spot. I love doing these events because I don’t have to prepare! In fact, I can’t prepare. I have no idea what anyone will ask. I also enjoy doing it because it tests me — how much value can I deliver, to someone with a problem, in the space of a few minutes? (Yes, I sometimes get egg on my face…)

With the economy, the job market and our daily lives almost totally upended, I know a lot of people are facing unusual situations. Let’s try to help. (If you’re new to Ask The Headhunter, check out The Basics.)

What’s your job search or hiring problem?

I will do my best to answer any and all questions you post in the comments section on the website.

  • Lost your job and don’t know how to start hunting for a new one?
  • The manager made you a good offer, but HR just called to rescind it?
  • You’ve still got a job but you’re teleworking. How’s that work?
  • They want your salary history, but you don’t want to share it?
  • Your company posted a job and got 5,000 applicants. What now?

What’s your problem? Post it and we’ll tackle it.

Two suggestions:

  1. Please try to summarize your situation. Too much detail can be confusing. Try to boil it down as best you can. Help us understand the real issues so we can focus and offer useful responses.
  1. Please remember to ask in the form of a question. Again, this helps crystallize the problem so we can address it effectively.

The coronavirus crisis has changed business and jobs dramatically. I expect we’ll get some unusual questions. Don’t hold back.

Open mic for advice, too!

I expect (and invite!) everyone to chime in and offer advice. The more suggestions and discussion, the better. Your advice is often better and more insightful than mine, so please share it!

What’s your question? What problem or challenge are you facing in your job search today, or while teleworking? Employers are welcome to post questions about their recruiting, hiring and HR problems, too.

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Is hiring a cost or investment? How employers blow it

Is hiring a cost or investment? How employers blow it

In the March 31, 2020 Ask The Headhunter Newsletter a reader says hiring and job offers should not be based on your tax returns.

Question

hiringI was once asked for my tax returns after a job interview, evidently to determine a job offer. I thought you priced a salary to a job — not what you might have to pay a candidate to hire them. I declined the job because the request displayed the kind of people I would be working for. They were forced to sell the company shortly thereafter. What’s your opinion on how to set a salary and job offer?

Nick’s Reply

I don’t believe in setting compensation based strictly on the job. That’s shortsighted because it assumes a job cannot be done in a way that increases its value to the business. I think sound job offers are based on the value of the job at that company, and on the added value the best candidate brings to the job. In other words, if it recruits effectively, a company spends more than it planned because it finds a hire who can do more than it expected. HR managers will want to hang me for that.

Consider the example of a job posted to write computer code using computer language X. Hiring a programmer who knows language X would get the job done just fine and within the budgeted salary. A programmer who is facile in languages X and Y (languages unexpected and not required by the job description) shows it would take less code and time to produce a more powerful program in language Y. (Software developers don’t hang me! This is an over-simplification.) But this programmer expects a salary 25% higher than the budget for the position. Does the employer calculate the benefits of investing more in that programmer?

Hiring: How are job offers determined?

A smart company has to start by (A) pricing a salary to a job. But that means management has a realistic idea of the value of the job. That is, how does it contribute to the bottom line? I don’t know many companies or managers that could explain how any particular job contributes to profits. Of course, it’s a game of estimating, but I think few even try. They focus strictly on the overhead cost of filling the job.

Once that number is set, I think a company needs to (B) look at the market for availability of candidates, and adjust how much to pay accordingly. Of course, that’s an estimate, too. (I do not advocate relying on salary surveys.) We must assume employers are rational and that they calculate expected profits before making hiring decisions, right? Or, how could they defend their business model and be successful? (Yes, those are loaded questions and snipes.)

Job offers test the employer

As an employer, you find out how well you understand your business when you actually make job offers. Your job offers are a test. If you get turned down by your best candidates, then your (B) estimates are probably incorrect. You’ve failed.

But it’s also possible your (A) number is off — and I think that means you have to reassess your business assumptions: Is that job really valid? That is, does it really feed the bottom line, or is it actually busywork? Put another way, can your company afford to hire someone to do the job? The accuracy of your job offers — Do the best candidates accept them? — tests the viability of your business model.

If you can’t afford to hire the best workers, there may be something wrong with your business.

Learning from candidates

I think the fun starts when you talk with candidates who can upend your (A) estimate. That is, they show you they can do the job in a way that increases profitability beyond your expectations. This is where the interview process really pays off if you do it properly. You’re learning about the candidate, but you’re also learning from the very best candidates, who will show you how to tweak the job and the work to cover higher compensation and to produce more profit.

Do your interview protocols identify such candidates? Does your compensation policy enable you to hire them?

Perhaps a candidate has unexpected skills and expertise that would boost creativity and efficiency in that job, thereby increasing the value of the hire. (That means you’re recruiting well!) Isn’t that the “dream candidate” every company would love to find? Isn’t that who HR is really advertising for when the job posting says, “We’re looking for stars who think out of the box!”

Is hiring a cost or an investment?

I find this is where most companies blow it — especially if their HR department is mired in policies that interfere with re-pricing a job to a higher compensation level. They absolutely will not consider paying more to get more.

Rather than change the parameters of the job and the compensation to suit an exceptional candidate, they reject the candidate “because they cost too much.” (Age discrimination, anyone?) But that exceptional candidate is not a cost. They are a potential investment that can pay off handsomely — if the company steps up to pay more to get more. (Of course, management must also know how to properly exploit exceptional skills.) This is an incredibly important part of a company’s learning curve, and I think too many companies don’t recruit to find that kind of value. They’re potentially blowing an opportunity to boost their return on investment.

So much for “We want to hire people who are off the performance curve!” They’re also off the normal compensation curve. They’re pricier!

How companies blow it

It’s one thing when a company prices a job inaccurately. That is, when it gets its estimate (A) wrong. But I think a company really blows it when it inaccurately estimates (B) the value that’s available in the candidate market — and refuses to pay more to get more.

The problem is HR policies that make the very best candidates walk away. For example, “Our salary range is fixed. We cannot consider a higher salary.” Or, “We can’t proceed until you give us your salary history [so we can preemptively destroy your ability to negotiate your new salary].”

Or, as in your case, “We can’t proceed without your tax returns.”

These are all silly practices that drive away the very best candidates. (See Your Approach to Hiring Is All Wrong.) Exceptional hires return the investment required to get them, and then some. But again, I think the key is that management must know how to measure the value of both a job and the candidate who is going to do it.

Perhaps more to the point, management must understand the basic idea that the ROI of a job can be enhanced by investing more in a hire who can do it better.

Regarding the company that was sold shortly after you turned it down: It seems you heard the message loud and clear. “We rely on some other company’s judgment of your value (reflected in your tax returns). We have no competitive edge because we have no idea how to judge your value to our business! Run!”

What are you worth to an employer? How does a smart company figure it out? Here’s my challenge to you, dear readers: If you’re dealing with an employer that can’t figure it out on their own, is it worth making the effort yourself to explain it to them? (That is, to show them why you’re worth more?) How would you do that?

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Does your job match its original job description?

Does your job match its original job description?

In the October 29, 2019 Ask The Headhunter Newsletter an executive is concerned about the role of the job description in employee attrition.

Question

job description

I’m president of a $20 million company, privately owned. Due to unusual turnover, I met with my head of HR and the affected managers. They said the “talent pool” isn’t good any more. HR’s exit notes indicated poor performance and lack of skills as the reasons for termination. So why did you hire them, I asked. They were the best candidates, they said. Then I read the job descriptions they used. Lists as long as a 3 iron. Nine or 10 “tasks,” even more “qualifications required,” and then a stack of “we prefer that you haves.” I asked them, is there something wrong with our process? Are we asking for too much and not training new hires enough? What are your thoughts about a problem like this? It’s serious.

Nick’s Reply

Job descriptions? Here’s what I think of job descriptions and people that write them (with apologies to Monty Python):

      Commentary on job descriptions
I feel your pain. But the idea that the “talent pool” has deteriorated is balderdash. Your suspicion that there’s something wrong with the process is correct. The conventional interview and assessment process assumes that in six months a new hire will be doing what was defined in the original job description.

That’s almost never the case. I believe that’s a big reason why new hires fail. So, how can you hire for the changing nature of the work?

The job description

When a manager needs work done, HR uses a process that starts with the manager describing the requirements of the job. This conventionally includes the tasks, a list of necessary qualifications, and some flowery promises about the company environment.

HR adds whatever it believes will attract the best and most applicants. Too often, HR’s largesse exceeds the limits of reality. For example, a job for a programmer will require “at least 5 years’ experience” with a scripting language that was invented only two years ago. HR always figures more is better — but doesn’t bother to check with the manager. Or, a go-fer job in the marketing department is characterized as “Senior Marketing Staff,” because it should attract really talented go-fers.

What happens after the job description

Even if the job description is truthful and accurate, almost every job runs head-long into a wall. Six months into it, the new hire is not doing what they were hired to do, but different work and usually more work. That’s because most jobs evolve to fill the ever-changing needs of a business.

The problem is, employers don’t hire for changing needs. HR takes a blurry (and wishful) snapshot of “a job,” fixed in time and in someone’s imagination, larding it with enough “requirements” to make a purple squirrel gag. (There are other ways HR goes off the rails with its hiring methods. See Why does HR waste time, money and the best job candidates?)

Deliverables

Can a “job description” ever be a useful tool in recruiting and hiring? As a headhunter, I’ve always read job descriptions once, then tossed them aside. I call the manager and find out what kind of evolving work the manager really needs done over the next year or two.

Here’s what I ask about:

What’s the problem? What do you want your new hire to make, fix or improve?

What’s the deliverable? What should the new hire deliver to the person working downstream from them? For example, a design engineer needs to deliver a certain part of a subsystem design to the system designer or project manager. What does that part of the subsystem look like and what must it do?

What’s the schedule? What do you need the new hire to deliver or accomplish in the first week, month, three months, six and 12 months on the job? Be specific. The deliverables must be defined in objective terms everyone agrees on. They must be measurable in amount, degree and quality — what are the metrics?

How does the work fit? Finally, and perhaps most important, how will the new hire fit into the larger work flow and objectives of the team, the department and the entire company? This is key, because it suggests what else the new hire must be able to do or learn to do.

Please note that your HR people are in no position to ask these questions and to discuss the details that underpin them. Your managers must do it. While a good headhunter can help them, you don’t need a headhunter if you get on top of this yourself.

Are you doing what you were hired for?

There’s a thing I do when I speak to seasoned managers in executive MBA programs at Wharton, UCLA, Northwestern and other business schools. I ask for a show of hands:

“Who has a job where what you were doing six months into it matched the job description you interviewed for?”

Of course, I get a lot of hoots and LMAOs. No one has ever asserted they were doing what they were hired for to start with.

What to ask job applicants

I suggest you direct your managers to answer the questions above about every job they think they need to fill. My guess is they will find that some jobs have no justification or value. I think they will find that the work that needs to be done is best defined in terms of deliverables that continue to change.

Three good questions for job applicants might be:

  1. Can you please show us how you would deliver X, Y and Z in three months, six months and 12 months?
  2. How would you help these 3 other teams deliver their objectives?
  3. How would you help the company achieve goals A, B and C?

I won’t even get into discussing your company’s plans for new projects, products or services — but your managers need to assess whether job candidates can shift gears quickly to meet the company’s changing needs. One good way to do this is to have applicants spend time with your teams before you hire them, so everyone can see how everyone else thinks and works. (But don’t go here: I think they expect me to work for free.) Of course, it’s your responsibility (and your managers’) to show applicants how you teach employees to do new kinds of work.

Please forget about filling jobs. Think about hiring people who can do changing work and deliver specific outcomes, and who can intelligently discuss how they might contribute to your company’s specific objectives.

There’s not a job description in this mix.

Does the work you do today match the job description you were hired for? How should employers assess job applicants to maximize success for everyone? What’s the most effective way you’ve assessed or been assessed for a job?

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Should I let HR do it?

Should I let HR do it?

In the September 24, 2019 Ask The Headhunter Newsletter an entrepreneur wonders if HR is necessary at all.

Question

HRI am starting a company. I have an absolute disdain for HR as a general rule and wanted to get your thoughts on a company running without an HR department. I feel like HR has hoodwinked so many executives into thinking they’re a necessity for any business, but there’s only a subset of things they do that are actually required. For example, making sure you’re not in violation of labor laws.

Which would you recommend: to have no HR department, or to severely limit HR to only those responsibilities that actually help the company (and hence reduce its size considerably)? One thing is sure: HR should never be involved in hiring decisions. I’ve never seen them help there.

Nick’s Reply

Good luck with your start-up. I’m sure HR folks will have something to say about this.

HR options

I think I would try a hybrid of no HR and limited HR. You can cover the compliance bases by contracting with a good HR consultant and by defining exactly what you want them to cover. But be careful – there are a lot of HR hacks out there. The good ones, however, will cost you and are worth what you’ll spend because they’ll advise you as well as do the work.

I understand why you’re so down on HR — you feel it’s not very helpful. You’re not alone — see FastCompany’s excellent Why We Hate HR. Make sure your HR consultant understands that they will have no decision-making authority, that they report to you, and that their scope of work is narrowly defined. Use them as you need them, just as you’d use any good consultant.

Limiting HR

If you find an HR consultant that’s actually good at recruiting, interviewing and managing the hiring process, you’ll be really lucky. There are some very good HR folks out there who work closely with managers to get jobs filled. They will embed themselves in a manager’s operation to learn how it works and what makes the manager tick. A good HR person will help the manager recruit and hire — but will not do the recruiting or hiring. They will process documentation and ensure the process is compliant with the law.

I think you can take care of important HR functions with just a good consultant for quite a while before you need to worry about hiring a full-time HR person.

HR & Legal

Keep in mind that many HR responsibilities are legal in nature, including  compliance. If you hire lawyers to advise you, make sure they have labor and employment expertise so they can backstop your HR consultant when necessary. Just be careful not to let the lawyers and HR gang up on you and rack up huge bills — or hobble your ability to run your business!

There’s a good, simple rule for managing HR, lawyers and other experts. Explain to them what your objective is; that is, what you want to do. They will often respond with myriad reasons why you mustn’t do it, or why it’s illegal, or why it won’t work. Thank them for their advice and cautions. Then instruct them to find a way to do what you want without violating the law, because that’s their job. If they push back, tell them to also provide you with a risk analysis, because that’s their job, too. Your job, as the principal of the company, is to decide how much risk you want to take — legal or otherwise. Never let a consultant make your decisions for you.

Do it yourself

I agree that HR should not control recruiting and hiring. (See Why HR should get out of the hiring business.)

I think the most important reason to limit any HR function is that being directly involved will force you to understand, grasp and grapple with the challenges of having others working for you. I’ve seen many companies fail because management left that to “experts.” So don’t “let HR do it.” Your people — your workers — are everything. They are your responsibility. The idea that someone else will manage your new company’s “human resources” is akin to suggesting that someone else is going to run your business. Perhaps that’s your goal ultimately, but until you learn the ins and outs of finding, hiring and managing people, you won’t have a business. (See Hiring Manager: HR is the problem, you are the solution.)

An HR function can be helpful if you, as head of the company, manage it like companies used to manage HR — actively. The trouble today is that HR is often left to its own devices because the C-suite sees HR functions as “icky but necessary, so let HR do it…”

Big mistake.

I wish you the best with your new business.

Can a new business operate without an HR department? If you could build an HR department from the ground up, what tasks would you have it handle — and which tasks would you never let it control?

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Employers are hiring all wrong

Employers are hiring all wrong

Most employers don’t know whether their hiring methods actually produce good hires, or how much time or money it costs to fill jobs. They don’t review the outcomes of their methods.

“Obsessed with new technologies and driving down costs, they largely ignore the ultimate goal: making the best possible hires,” says Wharton labor researcher Peter Cappelli, in the Harvard Business Review article, “Your Approach to Hiring Is All Wrong.”

What this means to you

Go around the recruiting and hiring systems employers want you to use, because they don’t work.

Summary

Cappelli says the root cause of most hiring is drastically poor retention. You’re most likely to change jobs and employers because your current employer is unlikely to promote you and provide new opportunities internally. This creates churn in the labor market and, ultimately, results in tremendous costs to fill jobs — an average of $4,129 per job in the United States.

Excerpts

Where are the hiring metrics?

Only about a third of U.S. companies report that they monitor whether their hiring practices lead to good employees; few of them do so carefully, and only a minority even track cost per hire and time to hire. Imagine if the CEO asked how an advertising campaign had gone, and the response was “We have a good idea how long it took to roll out and what it cost, but we haven’t looked to see whether we’re selling more.”

Failure to develop employees

In the era of lifetime employment, from the end of World War II through the 1970s, corporations filled roughly 90% of their vacancies through promotions and lateral assignments. Today the figure is a third or less. When they hire from outside, organizations don’t have to pay to train and develop their employees. Since the restructuring waves of the early 1980s, it has been relatively easy to find experienced talent outside. Only 28% of talent acquisition leaders today report that internal candidates are an important source of people to fill vacancies—presumably because of less internal development and fewer clear career ladders.

More is bad, so scare away the applicants

Recruiting and hiring consultants and vendors estimate that about 2% of applicants receive offers. Unfortunately, the main effort to improve hiring—virtually always aimed at making it faster and cheaper—has been to shovel more applicants into the funnel.

Much better to go in the other direction: Create a smaller but better-qualified applicant pool to improve the yield… If the goal is to get better hires in a cost-effective manner, it’s more important to scare away candidates who don’t fit than to jam more candidates into the recruiting funnel.

Hiring good employees

How to determine which candidates to hire—what predicts who will be a good employee—has been rigorously studied at least since World War I. The personnel psychologists who investigated this have learned much about predicting good hires that contemporary organizations have since forgotten, such as that neither college grades nor unstructured sequential interviews (hopping from office to office) are a good predictor, whereas past performance is.

Since it can be difficult (if not impossible) to glean sufficient information about an outside applicant’s past performance, what other predictors are good? … There is general agreement… that testing to see whether individuals have standard skills is about the best we can do… Only 40% of employers, however, do any tests of skills or general abilities, including IQ. What are they doing instead? Seventy-four percent do drug tests, including for marijuana use…

The advice on selection is straightforward: Test for skills. Ask assessments vendors to show evidence that they can actually predict who the good employees will be. Do fewer, more-consistent interviews.

HR vendors: Fresh & cool but unvalidated

Be wary of vendors bearing high-tech gifts. Into the testing void has come a new group of entrepreneurs who either are data scientists or have them in tow. They bring a fresh approach to the hiring process—but often with little understanding of how hiring actually works… These vendors have all sorts of cool-sounding assessments, such as computer games that can be scored to predict who will be a good hire. We don’t know whether any of these actually lead to better hires, because few of them are validated against actual job performance.

Wild HR technology

When applications come—always electronically—applicant-tracking software sifts through them for key words that the hiring managers want to see. Then the process moves into the Wild West, where a new industry of vendors offer an astonishing array of smart-sounding tools that claim to predict who will be a good hire. They use voice recognition, body language, clues on social media, and especially machine learning algorithms—everything but tea leaves. Entire publications are devoted to what these vendors are doing.

News I want you to use

What all this tells us is that employers suck at hiring, and if you follow the rules the Employment System itself is likely to prevent you from landing a new job — because it doesn’t work. Go around!

Employers don’t assess outcomes of hiring methods

It’s impossible to get better at hiring if you can’t tell whether the candidates you select become good employees. If you don’t know where you’re going, any road will take you there. You must have a way to measure which employees are the best ones.

Why is that not getting through to companies? Surveyed employers say the main reason they don’t examine whether their practices lead to better hires is that measuring employee performance is difficult.

Treat your job search like a business task

Like the sales manager who asks, “Is what we’re doing generating sales?”, you must learn to ask, “Is what I’m doing getting me job offers?”

Your boss checks to see whether the work you are doing yields the expected results — that’s a business task.

  • Pursue companies carefully — don’t chase job postings
  • Look for managers who know how to recruit and hire
  • Control your interactions with every employer

Just because employers behave like dummies when it comes to hiring doesn’t mean you have to play along or encourage them. Apply your business skills to the business task of getting the right job.

Organizations that don’t check to see how well their practices predict the quality of their hires are lacking in one of the most consequential aspects of modern business.

The truth hurts employers, but it hurts job seekers even more. I’ve only touched on what you can do to capitalize on Cappelli’s findings and suggestions. How can we use this news?

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How down-hiring destroys companies

In the May 21, 2019 Ask The Headhunter Newsletter a reader worries down-hiring is an irreversible catastrophe.

Question

down-hiringI joined my company six years ago mainly because every manager and employee I met impressed me. For the first couple of years, we were wildly successful. I’m convinced it was because of the people. As a manager, I am careful to hire only people who match that caliber. But things changed. A mediocre vice president was hired who brought in two managers who were not technically competent. They in turn hired weak staff. Customers started complaining.

Now my team and I spend most of our time putting out fires. Recently the first two people I hired quit in disgust. It’s hard to keep others who report to me motivated. I was asked to do a presentation to our board of directors and I was blunt with them. Two weeks later I was offered the job of CEO. I’m not sure I want it. Is the damage reversible or should I move on?

Nick’s Reply

Strong managers work to build the success of a business by hiring the best people. Insecure managers struggle to preserve their positions in the pecking order by “down-hiring.” That is, they hire weak employees who will not threaten their status.

A people hire A people, but B people will hire C people. When enough B and C people fill critical roles, A people leave. That VP you mentioned — and the weak managers she hired — are bringing down your company because its best people won’t tolerate it.

Like a virus, one B person can devastate your entire organization. I think you need to decide whether you can turn the company’s management team and staff around. That’s a tall order.

Rebuilding by hiring and firing

Think about the critical path: While you can try to purge your company of B and C people, the real challenge is keeping A people focused on hiring more A people.

Companies routinely delegate the hiring process downward to managers and staff who have progressively less skin in the game. If you become CEO, you need to take complete control of hiring until you have re-set the standard. You need to eliminate every B and C manager and replace them with A managers — then ride them to re-build the organization. (Eliminate might mean mentoring and training B’s and C’s into A’s, but that depends on the resources at your disposal and the time frame in which you must pull this off.)

Is this possible and worth attempting? I can’t tell you that. You have to make the judgment. I agree that you need to think hard about accepting the CEO role. I’ll try to offer you some thoughts that might be helpful, with the disclaimer that I am not a management expert. My suggestions are based on what I’ve seen and heard in many years of helping companies hire. I expect lively debate from readers about this Q&A!

Never down-hire

Always try to hire people better than yourself, and reward your managers for doing the same.

Your first problem may be in your human resources department. HR often fails to ensure managers are up-hiring. It lets managers down-hire. That’s no strategy for any company. HR’s job is to up the ante and to raise the standards of hiring.

Many HR departments routinely reject what they term “over-qualified” job candidates, fearing these folks will become quickly dissatisfied with the job and the pay and quit when something better comes along.

This is corporate suicide. Turning away “over-qualified” job applicants is a tacit admission that a company is already infected with B managers who don’t know how to profitably apply the extra skills that the most advanced job candidates offer. Worse, it reveals that a company is not a learning organization — it does not advance itself by adding and developing better talent.

A company’s response to “over-qualified” candidates should be glee. It should find the money and tweak the job so the company can benefit from the extraordinary good luck it has to hire extraordinarily qualified talent.

Down-hiring results in more B and C people in the ranks. The objective must always be the opposite.

Judge managers on the quality of their hires

If managers can’t find, hire and retain A people, fire the managers. (Don’t blame HR alone. It’s up to managers to manage hiring. HR is only a tool.)

You can tell quickly which managers are A people: They build teams filled with A people who meet challenges and deadlines with smiles on their faces. (See Talent Crisis: Managers who don’t recruit.) There’s no serious dissent among them because they all respect one another, their work, and their bosses.

Perhaps most obvious: Your best managers are not afraid to hire people who are smarter or more talented than themselves. They manage talent; they are not threatened by it.

Sever the rotting B manager, or lose the whole body. In this case, the head can be grown back if you have one A person who can take control.

Reward performance quickly

As you’ve seen in your company, when you let B people hire C people, your A people will leave. A people don’t stick around B or C companies. That’s the disaster of down-hiring.

When you bring an A person on board, you must reward them. The most effective reward you can give an A person is more A people to work with. (You’re the best example. The presence of A people inspired you to join up.) The next important reward is authority, which an A person will use to hire more A people and to weed out B and C people.

But don’t forget that another critical reward is money. A people can always get more money, but will they get it from you, or from a competitor? Feed your A people, and they will build an A company to ensure your success along with their own. (See Why employers should make higher job offers. My HR buddy Suzanne Lucas agrees.)

Can you fix it?

It’s a good sign that your board listened to the blunt truth you shared and trusts you to run the company. You need to make sure the board will back that up and fully support you. I’d ask to meet with a few of the key board members individually. Meet each for a working breakfast. Satisfy yourself that this request to turn the company around is real. Then have similar meetings with your best A managers and A employees. Ask for their judgments, advice and support. Only then would I make the decision you face.

Do I think up-hiring can fix a catastrophe caused in part by down-hiring? It matters only what you and your prospective new team think. I wish you the best.

Is my taxonomy of A, B and C people legitimate? Are B and C people really the problem this prospective CEO faces? Do you think it’s possible to turn this company around?

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