Many businesses continue to take a traditional approach to hiring – a method that frequently is financially and morally irresponsible.

The standard process involves advertising the job, vetting resumes, conducting two or three levels of interviews and then making a decision based on a “gut feeling,” says Cidnee Stephen, president of Calgary-based Strategies for Success.

Too often, the decision is the wrong one for both parties.

Larry MacDougal, Business Edge
Cidnee Stephen of Strategies for Success says bad hiring decisions are costly.

Stephen, whose human-resources company specializes in a handful of soft-skills areas including hiring and recruitment practices, says that many of today’s businesses haven’t taken the time to track the costs of bad hires and subsequent staff turnover.

“If they did,” she says, “they’d spend a little more money up front in the assessment process and realize that there are huge rewards when they hire the right people for the job.”

Stephen breaks the hiring process into three stages: Past, Present and Future.

* The Past focuses on the resume and previous jobs and education. Companies don’t do enough to check resumes, she says, and don’t possess the creative research skills to unearth bogus or exaggerated claims (especially concerning education.)

* The Present involves the interview process, where the employer/interviewer meets the candidate and assesses the person face to face. Stephen says that many times the interviewer often hits it off with a particular candidate who possesses similar characteristics to the interviewer. The problem is that those traits aren’t necessarily suited to the vacant job.

* The Future is the area companies fall down on because they don’t have valid and reliable assessment tools to determine how a new employee will fit into the company.

It’s the latter component that intrigues Stephen.

A commerce graduate of the University of Alberta in 1987, Stephen started her company three years ago. She had worked for a number of large international firms including Quaker Oats and spent time overseas in London as a manager with a major travel operator.

Working with a staff that was highly stressed, worked shifts for minimum wage and was subject to high turnover, she began seeing the power of hiring people who fit the jobs.

“It was accidental,” she recalls. “But when we started giving people responsibility and hiring smart, we began having these same people coming in on their days off. Within three months, the office was turning a profit and has ever since.”

Hiring smart, and developing valid assessments, are equally effective for entry-level positions through to upper management jobs.

With regard to hiring and recruitment practices, most human resources personnel understand the need for proper assessments. The hard part is convincing management of its benefits.

Stephen cites business studies that suggest the average cost of replacing a worker is about 25 per cent of that worker’s annual salary. Financial factors include advertising the position, training and reduced productivity.

Matters worsen when managers realize the new employee isn’t fitting in, she says. If the employee is let go before the standard three-month probation, the company has to try to find someone else. “But often that (unproductive) employee hangs around for a lot longer.”

The scenarios surrounding poor hiring practices aren’t pretty.

* An employee might be under stress and depressed because the job isn’t suitable.

* If a person is fired, the experience can be a devastating blow to their self-worth.

* And the employee may leave the company and bad-mouth it to everyone he or she encounters.

Stephen says measures can be taken to ensure the right person is hired.

Using current and reliable assessment techniques, companies can build a model that benchmarks the traits required for a particular job.

This often forces the company to define the job. Does the position require an assertive, independent-minded, quick learner? Or would a person with those traits be a disaster in that position?

It’s also important for companies to question star company performers and ask them what they like about their job, what could be done to make it better, and what personal characteristics allow them to thrive.

As the company builds a benchmark, serious job candidates can take the assessment. The computer assesses the data and suggests what kind of fit the applicant is, or isn’t.

“A good assessment tool is amazingly accurate,” says Stephen. “In fact, I have had people tell me that every time they’ve gone against the assessment and hired someone anyway, that person has been a mistake.”

Since hanging her own shingle, Stephen says her company – she has four associate staff members – has helped businesses small and large.

One area operator of a number of Subway fast-food franchises reduced his staff turnover from 400 per cent annually to 98 per cent and doubled his profits. Other clients include the Calgary Chamber of Commerce, J.J. Barnicke, Holiday Inn and RBC Insurance.

As a side note, Stephen explains those companies in the fast food, hotel and retail sales areas that offer entry-level positions face another cost when they hire poorly – theft.

“Employees in these areas steal more from their employer than shoplifters do,” says Stephen.

In those cases, assessment tests (which will determine if a person is likely to steal) become extremely important.

She stresses that having the right assessment tool and adapting it to the situation is critical. Many companies use well-known assessment tools that aren’t intended for hiring purposes, where an applicant can “fake” their way through.

Stephen believes that assessments in general should form one-third of the weighting when hiring.

The Past and Present are equally important, she says. And when all three components are properly assessed, the Future can be a winning scenario for employer and employee.

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Mike Dempster can be reached at: miked@businessedge.ca or you can send your comments to feedback@businessedge.ca