In April of 2011, McDonald’s announcement of plans to hire 50,000 people in one day was big news. The recession of 2008 – 2009 was technically over, but jobs growth in the US was anemic. McDonald’s actually ended up with over a million applicants during their job blitz and hired 62,000 people, a significant HR accomplishment by any measure.
As the Bureau of Labor Statistics graph (above) shows, the employment figures have moved steadily upward since the McDonald’s hiring blitz. According to the Manpower Employment Outlook Survey, the first quarter of 2014 will see more employers in a hiring mode than reducing staff. Do these stats include your organization?
Fast people decisions are usually wrong people decisions.
– Peter Drucker
In the current economic conditions, it’s more important than ever to make thoughtful recruiting decisions. As business picks up and new employees are needed, it’s tempting to add people quickly to fill immediate needs. It’s easy to assume that more employees will be better than fewer – that additional staff will improve productivity, quality, and customer service.
Perhaps not. Following Peter Drucker’s admonition, it may be better to hire nobody than a “warm body.” Improper hires create unwanted issues, but thoughtful selection results in employees whose competencies specifically fit your position specifications and are more engaged, more productive, and provide higher quality products and service.
Costs Are Significant
Labor costs may represent 70% or more of the costs of running a service business and 20 – 40% of a manufacturer’s budget. The ramifications of poor hiring decisions are equally significant. A recent study reports some startling statistics. When asked the effect of poor hiring decisions, businesses reported:
- Lost time and money recruiting and training other employees (39% of respondents)
- Lost productivity (38% of respondents)
- Negative impact on employee morale (30% of respondents)
- Negative effect on Customer Service (21 % of respondents)
- Decreased Sales (11% of respondents)
- Legal ramifications (9% of respondents)
Hiring Practices: Know What You’re Looking For
Another study of recently interviewed applicants found that two of the most frequently discussed interview topics were sports and the weather. It’s easy to infer that at least some of the hiring managers involved went into interviews without a clear understanding of the job specifications and without a plan to obtain relevant decision-making information. Lacking meaningful objectives, they simply engaged the applicants in casual conversation.
Many managers lack a structured approach to interviewing. They’ve “learned by doing,” but never acquired or refined the skills needed to be effective. Defining job specifications and determining required competencies, skills, and experience must occur ahead of the interview. These criteria are needed to assess whether the applicant can successfully perform the job – whether they have the important “can do’s,” “will do’s,” and “fit factors” to be successful.
The Applicant Has the Information
To make a thoughtful hiring decision, the interviewer needs a significant amount of specific information, defined by criteria established ahead of time. The applicant has the information and should do most of the talking. The interviewer should spend 80% of the interview listening. The other 20%, when the interviewer asks a question or probes for a job-related detail, is essentially an interruption of the interview.
Past behavior predicts future behavior. The best predictor of how an applicant will perform in a position is how he or she has performed in the past. Most of the interview should be spent on questions that ask the applicant to relate specific examples from past jobs or experience that are pertinent to the position requirements. Probe for details and ask about specific events and outcomes.
Sometimes It’s good to Come Up Short
Hiring 50,000 people in a day is a difficult task – and sometimes it’s hard to even hire one employee who can and will perform the job and fit into the organization. In companies where managers adhere to a structured interviewing and selection process, they may occasionally come up short. Careful and thoughtful interviewing, selection and on-boarding processes result in engaged employees and all of the associated benefits to productivity, profits, and customer loyalty.
Pete Tosh is co-founder and President of The Focus Group, a management consulting firm specializing in maximizing the achievement of corporate strategies via employee behavior. Pete can be reached by phone at 478-746-6891 or by email at firstname.lastname@example.org.