So over the past few weeks, we’ve had to make some firings. Mostly minor ones, having to let go of a few people here and there. We’re a small team of about 20, so it’s never fun… but sometimes it must be done! Generally, it involved junior developers & sales associates that were on the RZ team that were underperforming! We also had some cases of irresponsibility, disrespect, lack of communication, and downright slacking – all which will not be tolerated! Anyways, every time this happens, I end up getting together with Kenny Benavides (the other RZ Co-Founder) and we think about where we went wrong.
Was the job ad we posted clear enough? Did we set expectations correctly in our job advertisements? Did the candidate get screened properly throughout the interview process? Was training poor? But ultimately, it usually comes down to how can we improve to avoid this from happening again in the future?
We all know the cost of hiring IS TREMENDOUS. Posting job ads, using resume searches, recruiters, interviewing, training, and all the time and resources that go into it… it can be tremendously COSTLY! To quote the New York Times best selling book Who, “According to studies we have done with our clients the average hiring mistake costs 15X times any employee base salary. In hard cost and productivity cost.” Let’s put that in numbers terms, meaning a salary of $50,000 could cost you $750,000 to make up for that firing! This probably explain why companies like Zappos have paid employees up to $2000 to leave their company! Which I guess makes sense, because in the long-run you are actually saving hundreds of thousands of dollars!
Now, we all know you’ll never be able to 100% avoid bad hires. It’s just part of the process. But you could stack things in your favor, and anytime you fall down you think of ways to get back up and not get as injured next time you fall (and pedal all the way up the hill)! So as Kenny and I sat down to discuss our ‘learning lessons’ we came up with a few things that personally helped us hire better. Disclosure: We are not claiming to be complete 100% experts in this, but we do love to test new ideas and concepts. We do a lot of trial and error, and although this works for us it may not work for you…or it may seriously help you! Like anything, you just have to test it and tweak it into your hiring process.
Thus, here are some learning lessons that we noticed improved hiring better candidates (that didn’t result in firing) that has been working for us and our clients:
1) Many of the wrong hires were because they weren’t culture fits. When we failed to screen candidates on our values and just “let it slide”, we noticed later conflict would arise. In one instance, we even interviewed 2 candidates and didn’t really dive deep into their values and how they would fit in our work environment. One candidate in particular (I won’t mention any names), we hired because we thought he was a very strong performer (it was for a sales role). We made our whole decision based on this premise. It didn’t turn out too well for us. In Zappos book Delivering Happiness, Tony Hsieh states something along the lines of “no matter how high level a candidate may be, if they don’t fit the company culture they WILL NOT hire them”. Nowadays we have been experimenting with screening very hard on values (with fun interview exercises) and also have all candidates take personality tests – DISC profiling). It’s been improving quality on our past interviews and hires but we’re always tweaking this process as we go.
2) Going with your gut can be WRONG. Going with your gut can be a great thing, and in particular in regards to hiring and decision-making. But many of times, I have noticed that when we were hiring based on our “gut-feeling”, it had bitten us in the butt later! Did you know that when you are interviewing someone you make a judgement on them within the first 10 seconds (crazy I know!). According to Work Rules! by Laszlo Bock (VP of Recruiting at Google), he stated that there was a study done by the University of Toledo collaborated with their professor Frank Bernieri and reported that judgements made in the first ten seconds of an interview could predict the outcome of the interview. They discovered this by videotaping real interviews! Laszlo then concludes that the main problem is that these predictions on a candidate within the first ten seconds are actually useless! They create a situation where an interview is spent trying to confirm what we think of someone, rather than truly assessing them. So for RZ and our clients this is something we have been keeping in mind when our gut feeling is saying “Wow I get a really good feeling from this guy!!” (especially within the early stages of an interview).
3) INVESTING more resources into hiring increasing spending on this by 25-30%! This one has been a huge lesson for us. The second we increased our budgets on job advertising, resume searches, the amount of candidates that came in were incredible. We also really thought about our job ad copy, and put serious time and thought into it. The combination of this was HUGE, and we saw 75% more quality candidates coming in for interviews. Another thing we did was open our minds to new resources online, and try out some niche job boards and other resources out there. Which is always fun. We still had to remain very budget conscious (we are a small business), but overall big learning lesson for us.
Anyways, that’s all I’ve got for now! I wanted to keep this short and sweet. We’ll keep sharing our tips as we continue to speak to our clients and test them out ourselves…so stay tune. And of course if you have ideas, we’d always love to hear them. Happy Friday!
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