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A bad hire is not just bad for business—it’s costly too.

An outstanding webinar from PI Worldwide. Highly recommend if you would like to reduce bad hires. If you have questions on how to apply within your organization, contact me at john@johninmandialogue.com or at 425-954-7256.

Cost of a bad hire

On average, experts estimate the cost of a poor hiring decision is equal to 30% or more of that hire’s first year’s probable earnings. Factor in productivity loss and lost opportunities, morale implications, turnover and recruiting costs and the price tag starts to swell quickly.

Fortunately, organizations can prevent the costs associated with poor hiring decisions by recognizing the challenges at different steps of the talent acquisition process.

Listen to PI Worldwide’s recent webinar: Avoiding the 7 Mistakes that Lead to A Bad Hire for expert tips and best practices on improving your talent acquisition process.

Sincerely,

Michelle Kozin

Vice President of Learning & Communications

PI Worldwide

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Winning with Natural Talent

This may be an obvious question but why would we try to win with people who do not have the talent to do the work? Unfortunately that is exactly what most organizations do as they are unwilling to screen for talent when selecting incumbent or external candidates. I encourage you to read the June 3, 2014 article in Gallup Business Journal on this topic, To Win With Natural Talent, Go For Additive Effects.

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The authors state “Though researchers have made huge strides in understanding human behavior and motivation, few businesses are actually applying these findings. As a result, companies miss out on unprecedented opportunities for growth and revenue because they don’t understand the impact of human nature in the workplace.” I wonder what it is going to take to shift organizations away from selection practices that were developed in a world that no longer exists. It is as if managers and HR teams are holding on to the past in a futile effort to prove that past practices should never be abandoned. Yet researchers and thought leaders consistently suggest that the skills that have created past successes are not necessarily those that will create future successes. Just doing more of what was done in the past will not help organizations thrive in complexity, ambiguity, and uncertainty. There needs to be a profound shift in practice and that is a shift to screening on talent.

The authors explain “Gallup discovered that four human capital strategies combine in a powerful way to add up to 59% more growth in revenue per employee.” Three of those four human capital strategies are directly related to talent selection. With that level of revenue potential lost, I wonder why executive teams are not demanding a change in HR practices to transform the organization. The strategies include:

  • Strategy 1: Select managers with natural talent
    If someone is not suited to be a manager, do not put them in a management role. The question is how do you know? There are specific business behaviors and cognitive requirements for a manager to be effective and selecting for those attributes is critical. Past performance is not the best predictor of management talent, assessing potential is. Luckily there are excellent solutions in the market to help in this process.
  • Strategy 2: Select the right individual contributors
    For the same reasons that one selects a manager based on talent, one selects individual contributors on talent. Why would you hire a person who had the talent to be a bookkeeper for a sales position? You would not. Luckily the same solutions that are used to select management talent are used to select individual contributors.
  • Strategy 3: Engage employees
    Organizations invest a huge amount of resources both internally and externally to gauge and improve employee engagement. But here is the rude awakening, if all of these dollars are being spent on people who should not be in their positions. the investment is wasted. I often tell organization managers, do not expect me to fix a bad hire with training and development. It simply is not going to happen. Nor are employee engagement strategies invested on bad hires going to improve the lives of those team members or the organization. You want engaged team members? Give them work that they are suited to do then treat them with respect. Seriously this is not as hard as we make it.
  • Strategy 4: Focus on strengths
    How many review processes and coaching processes within organizations are focused on addressing weaknesses. Although Gallup research has shown again and again that focusing on strengths is what accelerates performance, many managers and HR departments are still operating in the stone age of trying to force people to do what they do not have the talent to do. If you want employees to be engaged, motivated, and productive, give them work that builds on their strengths, read natural talents, then treat them with respect. Generally people will demonstrate strength in those things that they have talent to do. I am a broken record on this. The damage to team members and organizations is staggering with current practices of trying to fix people or force them to be who they are not.

I encourage you to read this excellent Gallup article and reach out to learn more about how to implement talent selection in your organization. If you would like to learn more about talent selection, workforce analytics, and people big data and how it can transform your organization, please contact John Inman at john@johninmandialogue.com or at 425-954-7256.

 

How the American Red Cross Benchmarks and Boosts Skills with Workforce Analytics

Recopied from PI Worldwide News and Insights, August 2014

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When the American Red Cross needed a new development strategy to increase donors and dollars, they turned to data.

To gain a competitive advantage in an increasingly crowded non-profit arena, the American Red Cross needed to improve fundraising skills in a measurable way and introduce a formal process for engaging prospective donors and expanding existing donor relationships. The program would also need to scale nationally across seven regional divisions and support fundraising efforts for its five lines of service: disaster relief, military family aid, blood services and health and safety education and training.

The American Red Cross selected PI Worldwide’s Selling Skills System and used the Selling Skills Assessment Tool™ (SSAT) to benchmark each individual’s strengths and diagnose areas for improvement. Armed with analytics, the team then implemented the Customer-Focused Selling™ (CFS) skills training to optimize performance in five core fundraising activities including building trust and credibility with different types of donors, identifying donor needs and creating long term donor relationships. Customized case studies and terminology improved the relevancy and success of the program.

“In the fundraising community, people are very passionate about there being a difference between fundraising and sales. In our business environment, development is all about relationship building. Similarly, CFS enables Red Cross Fundraisers to engage with donors through a consultative process to ensure long-term success.”  Susan Rowell Director of Training American Red Cross National Headquarters Development

After leveraging skills assessment data, customized training and workforce analytics, the American Red Cross:

  • Established a metric-driven training and development culture scalable across divisions
  • Heightened confidence in building stronger relationships and implementing donor growth plans
  • Heightened confidence in building stronger relationships and implementing donor growth plans

Download the full case study on this effort. To get more information on sales performance improvement, predictive talent analytics or other services from John Inman Dialogue, call 425-954-7256 or email john@johninmandialogue.com.

Talent Spotting: The 21st Century Mandate

Let’s lead this conversation with the cover story in the June 2014 edition of Harvard Business Review, 21st Century Talent Spotting: Why potential now trumps brains experience, and “competencies” and challenge the common wisdom that we should be screening for talent using resumes. We should not.

Using predictive talent analytics to find talent

Using predictive talent analytics to find talent

More and more articles are emerging indicating that the market is way too fast paced and volatile to depend on old knowledge catalogued on a resume to make hiring decisions. Companies across the globe are moving to predictive talent analytics to help spot not only specific talent profiles that can and will do the job, but early talent that has little or no job experience in the job posted. Companies like Google are investing heavily to try to spot talent and companies like SAP international now use Predictive Index to screen all external and incumbent applicants in an attempt to find early talent that resume screening discriminates against. Where many HR organizations may feel that this is a risky move and may want to wait and see what happens before making a decision to move this direction, this is actually the safe move as it will guarantee the organization is getting the best talent for each and every job posted. Really how safe is it letting an organizing underperform or outright fail because of selection processes that do not deliver the talent needed by the organization to not only compete but thrive in a world that is best characterized by complexity, uncertainty, and ambiguity.

In the HBR article, the author, Claudio Fernandez-Araoz provides some compelling insights. I suggest that this article be mandatory reading for any leadership team interested in delivering improved engagement and performance across the organization. Although the article does not address predictive talent analytics specifically, this use of these talent spotting tools is exactly what executive teams are looking for. Tools such as Predictive Index put people data at the front of the decision making process. Consider this evidence based talent decisions rather than the current process of making decisions based on feelings, intuition and competencies that no longer are relevant to the success of the person in the position. The author describes this new era as the era of selecting on potential. The last era was the era of selecting on competencies. The era that proceeded selection based on competency was an era when selection was based on intelligence, experience, and past performance. And just imagine just how many companies as still selecting based on era practices that were created 50 years ago, in a world that no longer exists. The author states “Geopolitics, business, industries, and jobs are changing so rapidly that we can’t predict the competencies needed to succeed even a few year out.”

The opening scenario in the HBR article provides a clear example of what many executive teams are battling on a day to day basis, not only at the executive level, but at all levels of the organization. Read this opening paragraph and ask yourself if this scenario isn’t one that you have witnessed or experienced. And wouldn’t you like to have a different way forward? The author opens with the following story, “A few years ago, I was asked to help find a new CEO for a family-owned electronics retailer that wanted to professionalize its management and expand its operations. I worked closely with the outgoing chief executive and the board to pinpoint the relevant competencies for the job and then seek out and assess candidates. The man we hired had all the right credentials. He’d attended top professional schools and worked for some of the best organizations in the industry, and he was a successful country manager in one of the world’s most admired companies. Even more important, he’d scored above the target level for each of the competencies we’d identified. But none of that mattered. Despite his impressive background and great fit, he could not adjust to the massive technological, competitive, and regulatory changes occurring in the market at the time. Following three years of lackluster performance, he was asked to leave.”

Two questions that I would immediately ask, Did this person have the cognitive profile to learn at a extremely fast pace? He would have needed a high cognitive profile to perform in this position. Did this person have the behavioral profile to excel in this job, in this company, in this industry, at this time? I would suggest that he did not. Someone with the potential but with a Skinny Resume would probably have exceled in this position. Too bad they did not select for potential, the game change would have been significant. So can you imagine the bottom line impact on this organization. I suspect it was millions. A small investment in predictive talent analytics would have had an extraordinary ROI. Predictive talent analytics are not an HR cost to be managed, most organizations make an executive decision to improve performance and view the move this direction as an investment with a predictable ROI.

If this conversation has not convinced you to explore predictive talent analytics yet, maybe this last thought from the HBR author, Claudio Fernandez-Araoz will. “As business becomes more volatile and complex, and the global market for top professionals gets tighter, I am convinced that organization and their leaders must transition to what I think of as a new era of talent spotting – one in which our evaluations of one another are based not on brawn, brains, experience, or competencies, but on potential.” I totally agree.

If you would like to learn more about talent spotting, workforce analytics, and people big data and how it can transform your organization, please contact John Inman at john@johninmandialogue.com or at 425-954-7256.