In a recent survey published by The Academy for Chief Executives respondents indicated that recruiting, retaining and developing of quality people was the No 1 concern for SME leaders in 2018, beating even the uncertainty of #BREXIT!
This struck me, as the suggestion is that most SME’s pay attention to compliance issues, and other aspects of managing people often take second place – see People Skills: building ambition and HR capability in small UK firms.
Compliance is my area of expertise, and you may have heard me presenting, training or writing about employment law related topics, but this is not because I think it is the most important part of people management.
So, I thought I’d write about recruitment for a change, because this is probably the most important area where a few simple steps can significantly improve an organisation’s performance at getting the right people the first time.
Recruiting staff is an expensive and risky process, and is the area that professional HR advice can often make significant improvements producing an immediate return on investment.
Three questions that will help you improve your recruitment processes.
Firstly, do you know whether you recruit well or not? Put another way, is there a problem you need to solve?
If recruitment activity is taking a lot of your time, it can be caused by:-
- speed of growth,
- skills shortages in your sector or geographical area,
- reward package,
- approach to learning and development – you’re not developing people enough,
- ‘time to fill’ – your process is just too slow and people go elsewhere (in a 2016 survey 41% of respondents said this had lost them candidates in the previous 12 months), or
- the lack of clarity about the people characteristics you want.
There is a measure which will help you understand how you are doing compared to others. In 2016 (link for CIPD members only), the median rate for labour turnover was 16.5% – Number of leavers p.a. / average number of employees X 100.
The median figure relates to 8 people leaving each year in a 50-people organisation and other evidence suggests that most of these leave within their first year.
This median figure has risen in the last few years, and may not be reliable as a long-term indicator. My own guidance is that if turnover exceeds 10% p.a., you need to understand why.
Secondly, do you understand clearly what you are looking for? Getting this right is the number 1 thing that can help you reduce turnover.
It’s very hard to undo a mistake we make in recruitment.
Many of us get recruitment wrong because we don’t know what we are looking for, so we make our recruitment decisions in the first 30 seconds of an interview, and spend the rest of our time trying to justify our initial impression.
The traditional way of defining what you are looking for is the ‘Person Specification’, often detailing the skills, knowledge, experience and other attributes that a candidate needs. Don’t go overboard on experience, as it often is not a good indicator of future performance – it’s their skill you should be looking at, not how many years they have done it!
A decent ‘Person Spec’ will work wonders, and if you don’t already do them, take a look at my guide at http://bit.ly/personspecs .
Another way of defining what you are looking for is to think about the behaviours that you would expect a successful candidate to exhibit. I often ask managers to think of the best performer in a role that they have seen.
Imagine if they were watching a video of them at work, what would they observe them doing. This is the start of designing what is called ‘competency based’ assessment or interviewing.
Thirdly, having defined what you want, take a look at the design of your recruitment process.
There are estimates that suggest that the average (even well structured) interview is only 50% reliable at predicting future performance.
You can significantly improve this by using the competency based techniques described above, and you can pick up my guide on how to turn the video observations into interview questions at http://bit.ly/competencybasedinterviewing . Don’t worry, it’s free and you won’t have to leave me an email address!
Also, take a look at this great collection of competency based questions I saw recently on LinkedIn
Try and think about building in other processes.
A client rang me to for some psychometric profiling, after being frustrated at losing two new Marketing Managers in a 6-month period. The problem appeared to be simply that the new people were just not fitting in to a family business with 50 employees.
Having defined more clearly what we were looking for, we designed a simple intervention to allow us to observe how candidates were likely to fit in. This involved organising a Q&A session with all the candidates and the marketing team over lunch before the interviews.
The best way to assess future performance is to organise a workplace simulation, and this is precisely what the Q&A session was (sometimes they are called ‘job auditions’). An opportunity to observe the candidates doing what they would have to do to succeed at the job.
This was a low-cost intervention. Others, such as, psychometrics, there personal interests, or the views of referees, may be useful, but the evidence is that length of experience is a less reliable indicator of future performance than graphology (much favoured by the French!).
In 2016, the median cost of recruiting a senior manager was estimated to be about £6000, but since this includes internal promotions, the real cost for many is likely to be double that.
At this level of investment, it is obvious to see how spending time being clearer about what you are looking for and designing your selection process around that, could help you get the right people first time, and reduce the very expensive cost of people who leave in the first year.
Ken Allison | 19 September 2017 | Paradigm Partners | www.paradigmpartners.co.uk
Ken Allison is an engaging trainer and speaker who manages to make his topics, on handling employment law related people issues and other HR stuff, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.
Through his firm’s ‘ExecutiveHR’ service, Ken also provides telephone based support services to businesses throughout the UK.