This article was prepared by Malcolm O'Brien, a freshman from University Waterloo, major in Chemistry.
Patty Grigoryev’s research paper ‘Hiring by competency models’ (2006) showed that almost 50% of new hires fail within the first 18 months.
What’s striking is that only 11% of these failures were due to a, ‘lack of technical or professional competence’ while the remaining 89% of people failed simply because they did not fit the character profile necessary for the job.
Hiring can be viewed as 2-sided matching, and what accounts for this shockingly high failure rate is the lack of information needed to make a good match. While interviewees can misunderstand the job requirements, business’ often times don’t know enough about the job attributes, and are ill-prepared and ill-equipped to evaluate the right people for the role. Untrained managers fall prey to unconsciously hiring people like themselves because they feel comfortable around them rather than based on the interviewee having the right skills for the job.
How can I say these things as a first year university science student? I have seen it with my own eyes!
I recently had the pleasure of working as an intern for Red & White Consulting Partners LLP, consulting for one of major banks in North Asia. The bank had asked Red & White to help, ‘transform the capabilities of one of its key departments’. During the assessment, Red & White saw that while the bank was constantly hiring fresh graduates, it was experiencing an annual attrition rate of almost 80%!
The cause of this attrition was the significant disparity between what the graduates thought they would do versus what they ended up doingonce hired. The fresh employees thought they were being hired to solve and execute challenging business problems (and hence willing to join at a less competitive salary), but found that they were stuck doing the same dull processes day in and day out. Upon realizing this (usually within a year), they decided to give their talent (and a year’s worth of experience from the bank) to any competitor that offered them a higher salary, regardless whether the subsequent job was engaging or not.
One of the core elements of a good hiring assessment profile is identifying motivation.
If the said bank had known that the fresh graduate hires were motivated not by pay, but by the opportunity to grow, they may have justified their less competitive wage by showing how the one or two years of expected grunt work would lead to an enhanced career trajectory in the next 5 years. These minor changes may have saved grief for both the bank and the graduates, and a leadership and motivation assessment would have provided the necessary information.
Make no mistake, this bank is filled with intelligent, talented and technically skilled people. At the heart of the problem is the lack of tools and processes to help them identify employees with the right, ‘fit’. As jobs continue to become more intricate and complex, so too must the process we use to identify people to undertake these jobs evolve as well. As Charlie Wonderlic so succinctly puts it, "The cost of not hiring the right people is the cost of mediocrity and failure. How much is that worth to you?"
To learn more about personality and competency profile assessments, and how the broader domain of Human Capital Analytics can benefit your organisation, be sure to check out the exciting work that Red & White has been doing at its website or sign up for its workshop: Talent Management Analytics As a Tool to Increase Business Efficiency, prepared by Sally Taher, Partner of Red & White Consulting Partners LLP.