From Gut Feelings to Solid Processes: Dr. Mark Smith on Making Better Hiring Decisions

Introduction

This article is adapted from my interview with organizational psychologist, Mark Smith, Ph.D. for episode 046 of the ‘Conversations on Leadership with Dr. Dave’ podcast.? Listen to the full-interview here: https://youtu.be/RD3DO9_xQ1Y

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Overview of Dr. Mark Smith's Expertise

Dr. Mark Smith is an accomplished organizational psychologist with a wealth of experience in the field of hiring and talent acquisition. His extensive background focuses on skills-based hiring, advocating for evaluation of candidates on their competencies rather than traditional metrics such as educational background or years of experience. Dr. Smith emphasizes that the right hiring processes can significantly influence an organization’s success.? He is the owner of ‘A Better Choice’ and can be found at www.aBetterChoiceHire.com.

Having authored a book on skills-first hiring, helps various companies optimize their recruitment strategies. Dr. Smith's insights are grounded in research and real-world applications, make him a valuable resource for organizations aiming to improve their talent acquisition processes.

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Importance of Effective Hiring Processes

Effective hiring processes are crucial for organizations for several reasons:

·?Cost Savings: Poor hiring decisions often lead to significant costs associated with turnover, affecting both time and financial resources.? The most significant cost in the ‘hiring process’ is due to bad hires and the cost of turnover.

·?Cultural Fit: A well-structured hiring process identifies candidates who align with the company’s values, ensuring a harmonious workplace environment.? Toxic or poor-fit employees can have a negative impact on a company’s culture and significantly impacts employee engagement, costing the company more money than it probably realizes.? (Short: Cultural Fit Over Skills. https://youtube.com/shorts/Mk-rErxoFDI?feature=share)

·?Enhanced Performance: When organizations prioritize skills and competencies, they are likely to hire individuals who contribute positively and inexpensively to their goals.? People that are better fitted to the job and the culture are more willing to go above and beyond, giving extra effort and enjoying what they do.

·?Liability Reduction:? Companies expose themselves to a high degree of liability in both the hiring process and internal promotion processes when they have a subjective, unstructured process for interviewing and hiring.? Can you confidently defend your hiring process against a challenge in court?? (Short: Legal Safety Nets for Hiring. https://youtube.com/shorts/smnbIr-08-U?feature=share)

In today’s competitive job market, organizations cannot afford to overlook the significance of a strategic approach to hiring. The right processes not only bolster the talent pool but also foster a culture dedicated to growth and success.

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Understanding Gut Feelings in Hiring

The Role of Intuition in Decision Making

Often, hiring managers rely heavily on their intuition or gut feelings during the recruitment process. This instinct plays a significant role in decision-making, particularly when faced with multiple strong candidates, feeling like a trusted companion in making tough hiring decisions. Intuition allows decision-makers to quickly gauge whether a candidate fits well with the company culture or possesses the right attitude. For instance, when candidates display enthusiasm, body language, or a strong understanding of the company's values, hiring managers may feel inclined to hire them over individuals with better qualifications.

However, the challenge arises when intuition substitutes careful evaluation.? Just remember, your gut just isn’t as good as you think.

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Common Pitfalls of Relying on Gut Instincts

While intuition can provide insights, it can also lead to misjudgments. Here are some common pitfalls of heavily relying on gut instincts in hiring:

·?Overconfidence: Many believe their intuition is infallible, leading to decisions based on unverified feelings rather than concrete evidence.? Leaders with good experiences in the past, but coincidence and anecdotal evidence does not a consistent, reliable, and defensible process make.

·?Bias: Gut feelings can be influenced by unconscious biases, resulting in favoritism and missed opportunities for qualified candidates.? Even if you believe that there were no conscious or unconscious biases applied to the process, can you prove that if your hiring decision is challenged?

·?Inconsistent Evaluation: Intuitive decisions vary from one hiring manager to another, creating an unfair process lacking standardization and reliability, making it very difficult to ensure that your organization gets the best candidates possible with every hiring process.

It's essential for organizations to balance intuition with structured evaluation methods to ensure they make informed hiring decisions. Striving for this balance can lead to better candidate selection, better job fit, and improved workplace dynamics by having a better cultural fit.

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Transitioning to Skills-Based Hiring

Definition of Skills-Based Hiring

Skills-based hiring is a recruitment strategy that prioritizing a candidate's abilities, competencies, and practical experience over traditional factors like academic qualifications and years of experience. In this framework, hiring managers focus on understanding what applicants can actually do in the workplace, as opposed to merely examining what degrees or previous roles they have held. This approach is particularly useful in an age where technical skills may change rapidly, and organizations require agility in their talent pool.

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Benefits of Skills First Approach

Embracing a skills-first approach comes with several benefits, including:

·?Enhanced Diversity: By focusing on skills rather than backgrounds, companies often attract a more diverse range of candidates.? Do they have the skills to do the job versus just looking at education or years of experience?

·?Improved Performance: Candidates selected for their skills are more likely to perform well in their roles, as they have the practical abilities, not just knowledge necessary to succeed.? It’s all about a better fit between ‘the job’ and the candidate.? The better the fit, the better they will perform.

·?Reduced Turnover: Hiring individuals based on their competencies leads to better job satisfaction, which lowers turnover rates.? Back to the last bullet point, the better the fit, the happier they are in the job and the less likely they are to leave.

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Overcoming Misplaced Assumptions about Education and Experience

One of the most significant challenges in shifting to skills-based hiring is overcoming the common misconceptions about education and experience. Many organizations mistakenly believe that a degree or a lengthy résumé/CV guarantees competence. ?Hiring managers and HR departments hone in on education and years of experience as a screening mechanism attempting to filter through the torrent of resumes arriving in for a position, but can easily miss a better candidate.

However, it is essential to challenge this notion by training hiring teams to appreciate:

·??The difference between qualifications, rote knowledge, and actual job performance.

·?The value of diverse experiences which may not fit traditional molds.

· The evaluation of actual performance in the position through scenario-based role-playing exercises during the hiring process.

In doing so, companies will foster a more agile, engaged workforce readily adaptable to ever-changing demands with a better fit to the position and culture.? Also, consider whether the formal education fits the needs of your company and the position.? (Short on degrees relating to the position. https://youtube.com/shorts/QNbZTp98pGk?feature=share)

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Structured Hiring Processes

Components of a Structured Interview

Structured interviews are designed to provide a standardized approach to candidate evaluation, which significantly enhances the effectiveness of the hiring process. Some key components of a structured interview include:

·?Standardized Questions: All candidates respond to the same set of questions, ensuring a level playing field for everyone.? It’s not enough to just have a list of questions, reviewing them to ensure relevance to the position while not asking questions not relevant, or possibly opening the process to liability exposure.?

·?Rating Scale: Interviewers use a defined rating scale to score responses, providing a clear framework for evaluation.? Interviewers armed with a well-defined rating scale or rubric is crucial to executing a standardized, unbiased process.? A list of questions is absolutely necessary, but worthless without an objective grading scale rubric to standardize the evaluation process.

·?Predefined Competencies: Each question links to core competencies relevant to the specialized position, allowing for targeted assessments.? Despite the time required, questions determine and dictate the best all-around candidate for the job.? Companies can provide you with targeted and tested interview questions for specific workplace competencies identified as critical to the position.? (https://blog.ttisi.com/competencies-dna-what-you-need-to-know)

Utilizing this format with structured interviews, candidates are often surprised by how engaging and transparent the process feels when everything is uniform and above board.

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Importance of Consistency in Evaluation

Consistency is crucial in any hiring process. It helps to reduce conscious and unconscious bias and ensuring that all candidates are judged on the same criteria. By maintaining a uniform evaluation method, organizations identify the best candidates for a role based on skills and competencies rather than subjective judgement, which leads to better team cohesion.? Look at EEOC and OFFCP compliant benchmarking processes to identify the behaviors, motivators, and workplace competencies specific to the position prior to your assessments,

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Tools and Techniques for Assessing Candidates

Modern hiring processes can leverage various tools and techniques to enhance candidate assessment:

·?Psychometric Testing: Online tests can gauge cognitive abilities, behavioral style, and personality traits valuable for specific roles.? These should be considered as “middle of the hiring funnel” tools to help fit the candidate to the job in comparison to a resume review and possibly a telephone interview which would be more “top of the funnel” tools.? Typically, a job benchmark would be performed to determine what behavioral and motivational traits and workplace competencies fit the position.? Even after all of that, these tools are insufficient in isolation.? This is particularly true when working with those with intellectual disabilities or on the autism spectrum as they can be totally misleading.

·?Collaborative Evaluations: Getting input from multiple interviewers provides diverse perspectives and mitigate individual biases.? This coupled with standardized questions and grading rubrics are your next steps in the process prior to your final cut.

·?Role-Playing Exercises: These exercises help assess problem-solving skills in real-time scenarios relevant to the job and are the “bottom” of the candidate funnel to narrowing the field to the final top two or three candidates. The information gained from these exercises is invaluable.

Ultimately, integrating structured processes with effective tools leads to a more informed, fair, and successful hiring outcome.

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Role of Assessments in Hiring

Types of Assessments Used

To ensure that organizations select the most qualified candidates, various types of assessments are utilized in the hiring process. These can include:

·?Cognitive Ability Tests: Measure reasoning, memory, and problem-solving skills relevant to job performance.

·?Psychometric Self-Report Assessments: Evaluate traits that may influence behavior, motivation, workplace competencies, and systems judgement estimating interpersonal dynamics within the workplace.

·?Job Simulations: Mimic tasks that candidates would perform in their prospective roles, providing insight into their practical skills (role-playing).? Although this can be done internally, I would recommend either utilizing a neutral third-party to conduct these, or if that is not an option, choose evaluators from another department than the candidates with whom they are not familiar if it is an internal process.

For example, cognitive ability tests can help predict how well a candidate might handle complex tasks, while personality, behavioral, and motivator assessments can reveal if their traits align with the company culture.? Word of Caution:? Do your own “interview” of third-party assessors and assessments.? Ask the psychometric assessment providers you are considering for and look at their technical reports to ensure validity and reliability and adverse impact studies to ensure no disparate impacts of using the assessment(s) on any EEOC protected class.

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How Role-Playing Exercises Help Evaluate Candidates

Role-playing exercises are particularly effective in assessing how candidates react in realistic job scenarios that accurately reflect a stressful situation that position may be called on to handle.

·??Candidates are placed in controlled situations where they must interact with a role-player representing a superior, direct-report, colleague or a client.

·?This hands-on approach allows evaluators to observe important soft skills like communication, adaptability, and decision-making under pressure.

·?Again, keep it structured, valid, and reproducible.? It needs to be scripted but allow the scenario to go where the candidate takes it and have a standard rubric to grade the overall response.

Facilitating a role-playing exercise for a project management position, for example, have candidates resolve a conflict between competing stakeholders. Their responses provide invaluable insights into their leadership capabilities.

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Addressing the Challenges of Change Management

Common Resistance to New Hiring Techniques

When introducing skills-based hiring and structured assessment processes, resistance is commonplace. Many hiring managers are accustomed to traditional methods, such as basing decisions solely on educational qualifications or years of experience. This bias can lead to reluctance in adopting new hiring techniques. (Short: Not Changing the Status Quo. https://youtube.com/shorts/3HMDynPz0QM?feature=share)

Common reasons for resistance include:

·?Comfort in Tradition: Familiarity breeds comfort. Hiring managers may prefer established practices that seem more straightforward and intuitive, even if they are less effective.? Remember, your/their gut isn’t THAT good.

·?Fear of the Unknown: Change often brings uncertainty. Some might worry that new methods could disrupt their current workflow, reflect upon them poorly, or lead to legal complications.? Changing the status quo is difficult, but not changing to a standardized, defensible process actually may lead to more potential legal complications than not changing.

·?Perceived Threat to Authority: Some managers may feel that structured processes undermine their decision-making power by introducing standardization.? Leadership can involve ego and challenging that ego can be difficult so these types of change initiatives in hiring must have 100% commitment from executive leadership.

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Strategies for Implementing Effective Change in Hiring Processes

To navigate these challenges, companies can adopt strategies encouraging acceptance and collaboration. Here are a few effective methods once you have created your standardized process, questions, rubric, and role-play scenarios:

·?Education and Training: Host workshops to educate staff about the benefits of skills-based hiring. Sharing success stories from company beta testing this first can demystify the process.

·?Pilot Programs: Where do you get your best test results?? Implement these new techniques through pilot programs. Start with a smaller unit to test efficacy while gathering feedback for enhancements.? Iterate and refine along the way until you have a standardized process before rolling it out company-wide.

·?Engagement and Involvement: Involve hiring managers in the decision-making process for new techniques and hiring processes. With participation, they are more likely to embrace change.? Keep them informed on the ‘why’ behind the changes and the advantages (lower turnover, less liability exposure, etc.) of the new processes.

Typically, gradual transitions paired with open communication help in easing concerns and fostering acceptance of new methodologies, ultimately leading to a more effective hiring process.

(Short: Protect Yourself with Reliable Hiring Processes.? https://youtube.com/shorts/9IprHOfm8jo?feature=share)

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Impact of Poor Hiring Decisions

Analyzing the Cost of Turnover

When a hiring decision goes awry, the ramifications can be surprising—not only in terms of resources but also in morale. Poor hires often lead to significant turnover, which can cost companies a staggering amount. More companies will lose money due to bad hires and turnover than they will in settlements and court costs due to challenges of the process.? Although they are more rare, the weight of a full-blown EEOC investigation or being dragged into a long court case can be devastating and outrageously expensive as well.

In fact, the true costs can include:

·?Recruitment Expenses: These can include the time restructuring the job description (HR and hiring managers’ time), creating recruitment advertisements, direct advertising costs, recruitment firm fees, time lost reviewing applications and conducting interviews.? This includes the direct cost per hour of your time doing the interview, but also the opportunity cost of you not being able to be productive doing other work not involved in hiring.

·?Training Costs: New hires often require extensive training, which takes both time and money.? This is not only the time of the new hire, but the time of the HR staff on-boarding, and the people training the new hire.?

·?Lost Productivity: When an employee leaves, their tasks often fall to others, resulting in decreased productivity during the transition period.? There is also lost productivity during training as there is a certain crossover point where the new person finally is producing the same amount or more than it cost them to come on board and ramp up.? Even when the open position is filled, there is typically a delta between the productivity of the person who was at 100% who left and the new person between hiring and ramping up to that same level of productivity.

As an example, a colleague of mine worked with a call center where turnover was rampant. ?He did a Cost of Turnover study for the position and discovered that every time a customer service agent left, it cost them about $18,000 total in direct and indirect expenses. It was very well laid out and the company agreed with that figure.? With their high turnover rate, those costs piled up quickly, squeezing the budget.? They found it was much cheaper over time to bring him in to help them to reduce their turnover and realize their savings year over year due to the process he implemented year over the one-time cost for his services.

(Short: Hiring Mistakes Cost Millions.? https://youtube.com/shorts/RAOEYgpc4HQ?feature=share)

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Long-term Consequences of Bad Hires

The long-term effects of poor hiring decisions extend beyond immediate costs. They can lead to:

·?Decreased Team Morale: Repeated turnover can lead to frustration among remaining team members, impacting overall morale.? This reduces employee engagement levels and ultimately, productivity and profits.

·?Lost Customer Trust: If turnover affects service delivery, clients may lose faith in the company’s reliability.? Customer relationships are critical and having a new rep or account manager every few months can make them think twice about remaining as a customer.

·?Cultural Misalignment: Continuous poor hires can skew company culture, leading to an unproductive work environment.? Toxic employees are fatal to a vibrant company culture.? Pay attention to the adage of “hire slow and fire fast” when it comes to culture and fit.? These employees that don’t fit with your culture are the proverbial crabs in the pot pulling the other crabs down.

By focusing on skills-based hiring processes, organizations can mitigate these risks. Implementing rigorous assessment techniques promotes better fit and reduces the chances of turnover, saving companies countless dollars and maintaining a healthy work environment.

Enhancing Leadership Skills Through Using Best Hiring Practices

How Structured Processes Support Leadership Development

Hiring practices have a profound impact on finding the right candidate, but can also be utilized for leadership development within organizations. Implementing structured processes can significantly enhance the quality of leadership team hires, particularly internal promotions. A well-defined interview framework offers consistency, ensuring that candidates are evaluated based on the same criteria—key competencies required for the leadership role, such as:

·?Communication skills

·?Decision-making under pressure

·?Team collaboration

· Emotional intelligence

By focusing on these essential attributes during hiring, organizations create a robust leadership pipeline that has a greater chance of success. ?These processes are crucial for proper succession planning.

For instance, organizations undergoing a leadership overhaul should highlight the effectiveness of structured processes to the people going through the process.? This leads to faith in the process through transparency. By using tailored psychometric assessments and role-play exercises, companies can identify candidates who not only fit the qualifications but also aligned with the company's values and can function successfully at that new level.

Also, once the new leaders are hired/promoted, consider creating a safe place to fail by utilizing the same best practices in your hiring process (i.e. role-playing job-related scenarios) in their leadership development and training processes.? ?Classroom training alone in any endeavor, particularly leading people, without the hands-on application of those skills will not produce the results that most companies need from their leaders.

(Short: Safe Place to Fail for Leaders. https://youtube.com/shorts/Jc53nUq4VnA?feature=share)

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Organizations like Toastmasters (www.Toastmasters.org) can be a great place for your new and upcoming leaders to practice their communication, presentation, and leadership skills in a safe “fail-free” environment.? I cannot recommend that enough for your leadership and professional development programs.? (Short: Safe Place to Practice Skills (Toastmasters). https://youtube.com/shorts/3_IE3YZMfQ4?feature=share)?

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Conclusion

Summary of Key Insights

Throughout this discussion, it has become abundantly clear that effective hiring practices directly influence an organization’s success. Poor hiring decisions can lead to costly turnover and diminish team morale. Key insights that emerged during my interview with Dr. Smith included:

·?Importance of Structured Processes: Implementing structured interviews helps ensure fairness and eliminates biases, creating a more reliable hiring process, and reduces liability exposure.

·?Role of Skills-Based Hiring: Focusing on candidates' competencies rather than only their educational background or experience can uncover a wealth of talent that may otherwise be overlooked.? These skills need to be assessed through scenario-based evaluation outside of the typical interview process.

·?Value of Two-Way Learning: Interactions during the hiring process can serve as valuable touchpoints for both candidates and hiring teams, providing insights that can enhance the hiring process through iteration.? Consider using similar scenario-based role-playing exercises in your leadership development process within the organization.

Final Thoughts on Improving Hiring Decisions

To truly improve hiring decisions, organizations must commit to creating objective, standardized processes using multiple methods beyond simple resume review and a gut-based interview.? Companies should continuously evaluate and adapt their processes through pilot-programs and beta testing until it is ready to roll out throughout the organization.

·?Embrace Innovation: Utilize data analytics and technology to refine assessment methods and gain deeper insights into candidates' skills.? Carefully compare those skills to the ones identified through a structured process that are critical for the position.

·?Cultivate a Safe Space for Learning: As discussed, establishing a culture where employees and new leaders feel safe to learn from their mistakes can enhance overall performance.? Give them low-level projects and utilize scenario-based role playing for higher stakes learning where failing is a fantastic learning experience, not a recipe for disaster.

·?Prioritize Cultural Fit: Understanding the organization’s culture and aligning it with structured, reliable hiring processes and decisions can significantly improve employee retention, better cultural fit, and job satisfaction.

Ultimately, a comprehensive approach to hiring—centered on clear, structured methods and continuous learning—will lead to better outcomes for organizations and their teams.

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About our guest:

Mark Smith, Ph.D., is a distinguished HR expert and the Principal Consultant at A Better Choice Hire, specializing in candidate assessments. He is the author of the recent best-selling book, “A Better Choice: The Manager’s Guide to Skills-First Hiring.”

Check out his new book, "A Better Choice: The Manager's Guide to Skill-Based Hiring" on Amazon. https://www.amazon.com/stores/author/B0CXVGP8R9

Connect with him on LinkedIn. https://www.dhirubhai.net/in/mark-smith-ph-d-1776201a8/

https://www.aBetterChoiceHire.com

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About the podcast and author:

Dave Miles, Ph.D. works with CEOs to uncover and address hidden drains to productivity, revenue, and profits.? He is the Founder | Principal at the Transformative Alignment Group (www.TAGalignment.com).

Listen and subscribe to the ‘Conversations on Leadership with Dr. Dave’ podcast on YouTube and also check out our other interviews with a diverse array of leaders from a variety of industries.? https://www.youtube.com/playlist?list=PLfGG8SXAbWu5XiaS-23_w-r9pM-Wb6MT-

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