Is there Hiring Beyond Skills?

The topic of hiring has come up in several recent discussions on our radio show, The Leader’s Edge.

Hiring can be a tricky subject, as there are different schools of thought on the process. HR departments often insist that hiring must be done based on a person’s skillset and their ability to immediately perform the tasks at hand….with no forethought to how this person will perform long-term, or in other roles, or as a team member or leader.

Wise leaders (including those we’ve talked to on our show) and many great leadership experts believe that there is a better way!

In September, Steve Cooper, CEO of the Hospice of St. John, was a guest on our show. His non-profit staffs a combination of paid and volunteer personnel. Steve talked about how important a person’s passion for the hospice patients and families is to their ultimate success there. Similarly, several months ago I read an article in the Denver Post about the Autism Society of Colorado. Their executive director also mentioned that true, authentic passion is the key to hiring successful, long-term employees in their organization. The common message from these non-profit leaders: Hire for values and train for skill.

Now, you might be thinking to yourself…. “well, I can see how that makes sense in the non-profit world…but it really doesn’t apply to my business.” Again, several of our radio show guests would disagree with you. Heidi Hollenbeck, John Scarborough, and Richard Battenberg are all high-level executives in high-tech industries. All three talked about how important it is to determine if a candidate’s values and expectations match the company’s values and culture. The message from these successful business executives: Hire for fit and train for skills.

Are you starting to see a theme here? Let’s look at one more perspective. In this excerpt from the Hiring and Interviewing chapter of “The Engaged Manager”, my business partner, Coach David R Meyer, shares thoughts from his personal hiring experience:

Finding the right players for your team, not only for today but also for the future, is one of the most enjoyable tasks that you will perform as a manager. Searching for talent and improving the quality of your team can only serve to make your team stronger and your own job easier.

…

The purpose of this chapter is to help you find the best talent for your organization. Ultimately, hiring for talent, while more challenging and time consuming than hiring for skills, is one of the keys to your long-term success.

...

If you want to hire the very best people, if you want to build a great team, if you want to be a great leader, then hire for talent and attitude and train for skill.

Certainly, there are some exceptions to this rule. If you were in a hospital and hiring neurosurgeons, then you would not hire a great guy or gal who did not have a medical degree. But being a neurosurgeon is a specialized skill that takes years to acquire. This is not true for most positions. In addition, as you interviewed neurosurgeons, you would look for the neurosurgeon with the most talent and the best attitude, NOT the one who had performed the most operations.

Skills are the most routine part of any job. Yes, you need to make sure that the basic skill-set exists in your candidate, but not the specific skills. Skills can be taught, talent cannot. When you hire based on skills, you are hiring based on the lowest common denominator of the job. When you hire for talent, you are hiring the potential to do so much more than the job requires. When you hire for talent, you are hiring for future growth.

When you hire for talent, you are hiring for things that cannot be taught!

Hire for talent and you will hire for greatness.

Dave’s message from this chapter: Hire for talent and attitude and train for skill.

Now, as Dave points out in this excerpt, skills do play a role in the hiring process and are certainly critical in certain professions. But, once you ensure that the person has the basic skills to do the job, hiring the RIGHT person for the job can depend heavily on their passion, values, expectations, and overall talent. Remember….skills can be taught, many of these other attributes cannot. And, these attributes could mean the difference between hiring a successful long-term employee and replacing someone who was not a good fit a few months down the road.

Take a look at your hiring processes. Is there room for improvement? Do you hire only for skill-set? Is it appropriate for your business to consider hiring based on other attributes? Besides passion, values, expectations, and talent….are there other attributes that make sense for your organization? If so, we’d love for you to share them here!

At ECI Learning Systems LLC we are dedicated to improving productivity and profitability by creating engaged organizations. Our unique combination of training and personalized coaching, combined with our expertise in assessments allow us to create a development plan tailored for your success.

Until next time….

Laurie Valaer

ECI Learning Systems, LLC
http://www.ECILearning.com

Your Employees Are Quitting You – Part 3

Over the last couple of weeks, I have been writing about how employees are leaving their jobs under the guise of “more money” or “better opportunity,” when they are really quitting on you or your first line managers.

About 87% of the people who claim that they are leaving their job for money or a better opportunity are not after more money but, none the less, leave your organization creating a hole that cannot easily be filled. Depending on the level of the person leaving, cost estimates of replacing a person range from 100% to 500% of their annual salary. And these are just the hard costs of finding and replacing a valuable team member. They don’t account for the lost knowledge, history, or customer goodwill that your employee has built up over time.

When customers routinely interact with specific members of your organization bonds of trust are formed. These bonds of trust are built over time and are critical when something goes wrong. When I know and trust someone at Acme Corporation and my order has a problem, I’m confident that it will be worked out quickly and efficiently. When I don’t know anyone there or worse, when the person I know and trust is suddenly not there, my level of confidence drops dramatically and I am suddenly much more alert and ready to jump on any problem, regardless of how minor it might appear.

Think of the difference this could make to your bottom line. If you are losing mid-level employees where the cost of replacing them is approximately 300% of their salaries, you could add hundreds of thousands of dollars of profit to your bottom line each year with a modest reduction in the number of employees who left your organization. If 5 less mid-level employees making $40K left each year you could improve your bottom line by over $600K annually. By way of comparison, if you operate at a 5% net margin (not unusual for many businesses) you would need an addition $12 million in sales to add $600K to your bottom line.

Pretty startling, isn’t it.

How can you reduce turnover? How can you ensure that 5 mid-level employees will want to stay and work in your organization rather than leave for another job or worse, go across the street to a competitor?

The best way is to invest some time and energy in training your management team at all levels. Too many organizations focus on developing their top level people and ignore the training of their front line managers. Yet, the front line managers have much more interaction with the employees AND the customers than upper level executives do. Front line managers are the people that most employees and customers associate with your organization. They are the people who inspire trust and create suspicion, build bridges and dig chasms, develop loyalty and loathing inside your organization. At the same time, they tend to get the least amount of development and are the most likely to fail.

It might be time for a hard look in the mirror. Where has your organization been spending their developmental dollars and resources? Who has the biggest impact on what happens in your organization every day?

It’s time to start thinking about how to create front line managers who can actually help, not hinder, your organization’s growth.

At ECI Learning Systems LLC, we are dedicated to helping companies get the greatest return from their most valuable asset: their employees. We work with you to align 3 key organizational factors:
• Your Company Culture
• The Leadership Styles of your key managers
• The Expectations of your Employees

When these 3 factors are aligned, you create an energy in your company that improves productivity, reduces absenteeism, increases creativity, and positively impacts your bottom line. Contact ECI Learning Systems LLC today to get your free Workplace Evaluation.


Until next time....

Dave Meyer
ECI Learning Systems, LLC
http://www.ecilearning.com/

Your Employees Are Quitting You - Part 2

In my last entry, I noted the fact that 90% of the people who leave an organization say they are leaving for more money or a better opportunity. Yet, when contacted by an independent agent, 78% of them cite reasons other than money or opportunity as their reasons for leaving. In other words, 78% of the people who leave your organization (more than 3 out of 4) are relatively happy with their pay and opportunity, but still decide to risk the unknown and take a job elsewhere.

This is especially surprising when you consider that nearly 80% of Americans are risk averse when it comes to their jobs and lives. That’s right, nearly 80% of Americans will live with some sort of pain or problem rather than change things to try and fix it. Yet, here they are leaving your company; taking with them knowledge, experience, and customer relationships, rather than trying to resolve whatever issue they perceive in your organization.

Why would they do that? Why do they risk the great unknown of a new job and new company when money and opportunity are not the driving force?

It’s simple. They are trying to get away from you. Or at least get away from your front line managers.

When 78% of the people leave a job for something other than money or opportunity, they are not fleeing toward something specific. Instead, they are running away from their current situation. By going to a new job or a new company they are not necessarily moving toward something that they know is better, but they believe that it certainly can’t be any worse. They are fleeing with the blind belief that wherever they end up can’t be any worse than where they are now.

It depresses me to even write those words!

As I talk with managers about employee engagement and turnover, a couple of things become crystal clear to me. First of all, most managers don’t understand what employee turnover actually costs the organization. In fact, they often believe that turnover can be good for them from a budgetary perspective.

One manager described it to me this way. “I’m judged on how well I manage my budget. When an employee making $40K a year leaves my organization and it takes me two months to replace them, I’m actually saving $7000 in my budget because I’m not paying them. My bonus percentage is based on how many of my goals I make and last year I made my budget goal because employee turnover saved me money!”

From a very narrow perspective, this line of thinking actually makes sense. Of course the flaw in this logic lies in its micro view of the departmental budget versus the macro view of organizational profitability. But this manager beamed proudly at having saved the company money.

In a way, it’s a shame that this manager doesn’t have a line item on his departmental budget to capture the costs of HR having to advertise, interview, hire, and train his new employee. Those costs alone will more than eat up that $7000 in payroll savings, without regards to the knowledge and history lost when employees leave an organization. Of course, when I pointed out these costs to this manager he just smiled and shrugged.

“That’s not my problem” was his response.

Of course, at that moment the reason his employees were quitting him was really quite apparent. But, we’ll have more on that next week.

At ECI Learning Systems LLC, we are dedicated to helping companies get the greatest return from their most valuable asset: their employees. We work with you to align 3 key organizational factors:
• Your Company Culture
• The Leadership Styles of your key managers
• The Expectations of your Employees

When these 3 factors are aligned, you create an energy in your company that improves productivity, reduces absenteeism, increases creativity, and positively impacts your bottom line. Contact ECI Learning Systems LLC today to get your free Workplace Evaluation.


Until next time....

Dave Meyer
ECI Learning Systems, LLC
http://www.ecilearning.com/

Your Employees Are Quitting You

Would it surprise you to hear that 89% of managers believe that employees leave or stay based primarily on money? (Saratoga Institute 2003)

Would it surprise you to hear that nearly 90% of employee exit interviews cite either “more money” or “better opportunity” as the primary reason for employee turnover? (Saratoga Institute 2003)



Probably not too shocking, is it? People tell HR or their managers that they are leaving for more money and the managers believe them.

So, would it surprise you to hear that 88% of the people contacted independently stated that the primary reason they left their job was NOT for more money or a better opportunity? (Saratoga Institute 2003)

I don’t know what is more surprising to me about these three facts.

Am I the most surprised that, in spite of constant evidence to the contrary, managers still believe that people are primarily motivated by money?

Or, am I most surprised that 78% of the people leaving an organization (the 90% citing "more money" in their exit interview minus the 12% that independently cited "more money" as their real reason for leaving) are not honest with HR or their manager as to why they are leaving?

Maybe I’m most surprised that managers and HR have not figured out, or don’t seem to care, why their employees are actually leaving. Instead, they hear that someone is leaving for “more money” and they just accept it as a fact.

Employee turnover is costing your business massively every year. Estimates on the cost of employee turnover range from 1 times the employee’s annual salary to 5 or 6 times the annual salary, depending on the level and expertise of the person leaving. Depending on the size of your business, that means that you are easily losing tens of thousands to millions of dollars every year due to turnover.

Some would argue that turnover is just a part of doing business and that some turnover is even good for you. And I would agree with those statements, to an extent. But when 78% of your employees are not being honest as to why they are leaving, it’s time to open your eyes to what is really happening and do something about it. After all, if I told you that a process problem in your organization was costing you tens of thousands of dollars every year, you would jump on it to fix it. If I told you that a billing problem was costing you millions each year, you would put a whole team of people on solving your billing problem. Yet when business owners or executives hear that employee turnover is costing them tens of thousands to millions of dollars each year, they shrug their shoulders and move on to the next problem.

Why are companies overlooking such a major problem? What can be done to reduce or eliminate these unnecessary expenses?

We’ll talk about these issues in the next couple of blog entries.

At ECI Learning Systems LLC, we are dedicated to helping companies get the greatest return from their most valuable asset: their employees. We work with you to align 3 key organizational factors:
• Your Company Culture
• The Leadership Styles of your key managers
• The Expectations of your Employees

When these 3 factors are aligned, you create an energy in your company that improves productivity, reduces absenteeism, increases creativity, and positively impacts your bottom line. Contact ECI Learning Systems LLC today to get your free Workplace Evaluation.


Until next time....

Dave Meyer
ECI Learning Systems, LLC
http://www.ecilearning.com/