All business owners are faced with difficult decisions every day. However, the most difficult of them relate to getting new people on board. Here are some of the most difficult hiring decisions, along with ways to make them easier.
As a business owner, you make hundreds of choices every day that affect your company’s success. However, there are very few as important as hiring decisions. Bringing the right person onboard your team can make a world of difference, while a wrong hire could waste immense time and resources. As making hiring decisions can be rather difficult, especially if you have a small team with no HR department, we’ve come up with a few ways to make the decisions you have to make easier and more manageable.
Remove hiring bias
In a perfect world, all hiring decisions would be made objectively. You would simply look at what the candidate can do and make a decision on whom to hire on that account. In reality, things are unfortunately much different. We often make hiring decisions based on applicants’ gender, education, race, ethnicity, age or turnover. It’s rarely the case that the best applicant gets the job, it’s the applicant that the HR team likes the best.
For example, if you were hiring an actor, it would be absolutely reasonable to look for a white, middle-aged woman for your role. If you’re hiring an accountant, it would be considered unreasonable, and most certainly illegal.
This is known as affinity bias. As it turns out, we love to hire mini-mes – people who look like us. In an interview, a person with the same background, age, race and hobbies will have more chances than someone who’s completely different.
Hiring based on familiarity is not only illegal, but it’s also grounds for some very poor hiring decisions. Often times, a poor-quality candidate slips by merely because they had so much in common with the HR manager. The problem with hiring for familiarity is that plenty of people do it completely unconsciously. With so many advantages brought by workplace diversity, it’s detrimental to base hiring decisions on familiarity.
Sometimes, you may be even projecting your bias right from the start, on your job ad. The way you word your job description could potentially be putting off a group of applicants. For example, the aptly titled Gender Decoder for Job Ads helps you realize if you are putting off male or female applicants with your wording. Using this free tool, you copy and paste your ad and it will recognize masculine and feminine encoded words.
Another great tool (albeit paid) is called Textio. This “augmented writing” tool lets you put in your job description and it gives you feedback on the type of language you’re using. The premise is that the expressions you choose can make a significant impact on which candidates you are targeting. Companies such as eBay, Twitter and Bloomberg use Textio to craft job descriptions that attract top performers, without bias.
Another way of eliminating hiring bias is by making a standardized job interview. If the interview develops naturally, without predefined questions, chances are that it will provide skewed data. If all applicants answer the same set of questions, the interview should yield objective data for each applicant that can be graded on a scorecard.
Unfortunately, there is no easy way to completely eliminate bias from hiring and make entirely objective hiring decisions. Perhaps the best way is to make CVs as anonymous as possible so that only you get to see the most basic information as someone applies.
This is exactly one of the reasons why we built Toggl Hire as a way to hire people. Once candidates start applying, all you can see is their score and you can make hiring decisions solely based on this data. As we set out to hire our SEO manager, we only looked at their test scores in the first part of the hiring process. Once we narrowed the selection down to a handful of candidates, we took a look at their LinkedIn profile to see their relevant work experience. The most important (initial) part of the hiring process was done completely objectively – without involving gender, age, race, ethnicity or even work experience. Speaking of which…
Make hiring decisions based on performance
At the end of the day, the most important thing when hiring new people is how they perform. Unfortunately, that is not so easy to determine early out in the hiring process. In fact, the only times you can make hiring decisions based on performance is if the hiring manager already knows the applicant or if they were referred by someone you trust.
One of the top ways to ensure you’re hiring the best talent is by introducing performance-based hiring. Invented by Lou Adler, this method implies putting performance as the top indicator of success in a job role.
To start off, you need to write a performance-based job ad. It should focus on what the candidate should do in the position you’re hiring for and not the usual list of desired education, skills and character traits. Determine what it means to be successful in the role and potential candidates will see it as a challenge.
Performance-based hiring also helps with the bulk of difficult hiring decisions by making a suggestion that a candidate’s skills should be checked early on in the hiring process. You could arrange this so that candidates can send in a test assignment with their application and in this way determine if they have the skills needed for the job. However, this means going through assignments on top of the resumes and cover letters. As a result, you’ll spend even more time hiring the right person.
When hiring at Toggl Hire, we base hiring decisions heavily on performance. When we hired our SEO manager, we first filtered the original 154 applicants to 13, automatically, using a skills-based test. Those 13 were then further narrowed down to 2 using yet another test. Finally, the 2 best candidates did a paid test week at Toggl Hire so we can get to know their work before making a hiring decision.
Don’t make hiring decisions based on the CV
If you’ve been following our blog for a while, you’ll notice that we’re really not that big on CVs. In fact, some may even think that we would want them completely gone from the hiring system. This is far from the truth, but CVs are anything but perfect as a means of hiring.
The first and most obvious reason why CVs aren’t ideal is that people tend to lie on them. Quite a lot, actually. According to recent research, about 85% of all job applicants lie on their resumes. If you think that people only lie for junior positions, you’d be very much mistaken. Plenty of CEOs lie on their CVs too – it’s only about who gets caught in the act. However, the biggest culprits are college students, 92% of whom admitted to putting false information in their resumes. Most companies run background and reference checks at the very end of the hiring process, which means that most candidates get to the last rounds based on false information.
Another problem with resumes is that as you apply for a position, companies will expect a fully updated CV. Not many applicants will have an updated CV standing by and making their resume up to date will take considerable investments in time. This will put off quite a lot of people, especially passive candidates. As they are already employed, taking several hours to update their CV to apply is simply not worth the effort for them. What’s more, one resume does not work for multiple applications, as companies will require custom-tailored CVs for their job ad. Needless to say, this requires even more time for the applicant.
If you’re wondering why it takes so long to hire someone, CVs are one of the main reasons. As Listonic have said in their recent interview for us, they usually take 30-45 minutes to review a candidate’s CV and LinkedIn profile. Once you have a pool of 300 applicants, this becomes a very significant time investment.
Then there are the keywords. As lots of companies today use applicant tracking systems to shorten their hiring process, they may be doing more wrong than good. ATS solutions pick up on certain keywords which you select, and in this way, you’re able to sort through a large number of candidates quickly, just by running their CV through an ATS. The first part of the issue: there are genuinely good candidates who don’t know which keywords to use. The second part – there are low-quality candidates who know exactly which keywords to use and they will write their CVs so that they pass under the radar.
Finally, perhaps one of the most prevalent issues with CVs is that they list historical succession of where someone worked, and not how well they performed in the role. Applicants rarely list achievements in the form of measurable results. And in the cases that they do, those results can be false or exaggerated. Unfortunately, checking these results for accuracy can present quite a problem, as not all companies are willing to disclose information about their ex-employee performance.
All their faults aside, the power of CVs should not be ignored. They are still the most effective way to list an applicant’s work history, achievements, education and skill sets. With this in mind, CVs should only be used as an aid and not as a main tool to make your hiring decisions.
Don’t hire just to fill a position
How many times has it happened that you wished you never hired somebody? Admitting a mistake is one step towards making better choices. Often times, people end up hiring someone just because they desperately need to fill a position. It’s a case of choosing the lesser of two evils – hiring someone who may not be that great of a fit, instead of having a position remain unfilled for too long.
The primary reason why people settle is because it simply takes too long to find new people. According to research, it takes 48 to 52 days on average to fill a position. For corporations with tens of thousands of employees, nearly two months with an unfilled position may not be all that bad. However, if you run a start-up with a handful of employees, desperation may force you to hire someone as soon as possible to fill the gap.
As we’ve written before, the cost of hiring an employee can make a huge dent in your company budget. Additionally, making a bad hire can cost anywhere from 30% to 150% of their annual salary. If money’s not your primary concern, think of other forms of damage. A bad hire will be unproductive, hinder their co-workers, require constant help and supervision and you will waste considerable time fixing their errors and apologizing for their performance.
Therefore, it’s a much better solution not to hire at all instead of hiring just anyone. You will do good to your company budget, reputation and employee satisfaction. If you have a dire need to fill a position, you can temporarily fill it by outsourcing the work to an expert. You may spend a bit more, but it’s a great way to bridge the gap until you find your ideal new employee.
Make good hiring decisions today
No matter if you’re running a small start-up or a multinational corporation – making the right hiring decisions can bring tremendous benefits, while a wrong one can cost you time and money. At Toggl Hire, we know the value of hiring the best person for the job. This is why we came up with a tool that lets you hire without reflecting on candidates’ CV, work experience, age, gender, race, ethnicity or any other factor that may cloud your decision. Sign up today and start hiring a rock-star team objectively!