Imagine spending just 30 minutes evaluating a $250,000 computer equipment purchase. If that investment in equipment turned out to be a bad decision, do you think anyone would lose sleep over it? Could they even lose their job over it? What about making similarly bad decisions about the next employee you hire? According to a 2009 study by Development Dimensions International, 47 percent of the 2,000 managers surveyed said their job-candidate interviews lasted less than 30 minutes, and 44 percent admitted they relied on their gut instinct to make the decision. Both types of decisions involve a similar level of investment, so they should be approached with a similar level of discipline.

American Home Shield, the major-appliance warranty arm of ServiceMaster, has about 1,500 employees. A critical department had an annual turnover rate of 89 percent, and the company estimated the direct financial costs associated with losing employees and hiring and training replacements was over $250,000 annually. Managers also believed that the high turnover rate was eroding employee morale and customer loyalty.

PricewaterhouseCoopers, a global audit, assurance, tax and advisory services firm with 165,000 employees, estimated that turnover at their call centers costs the organization $55 million per year. They estimated that each average-performing employee they lose costs $50,000, while each high-performing employee costs $125,000.

Let’s take a look at how the process one might use to make a well-informed decision about a major computer investment is similar to evaluating an investment in people:

1. Identify specific requirements. With an employee, these are job requirements or core competencies.

2. Create a criteria-based decision guide, assigning weight to each requirement and giving yourself a framework for making an informed choice.

3. Develop an understanding of related technology and decision tools. For hiring, this means understanding the position requirements and learning to conduct a behavioral interview.

4. Involve other “super users” in the decision process. Other managers or individuals who would interact with this position would be the super users.

5. Identify possible solutions in the form of candidates.

6. Conduct a thorough live demonstration, in this case multiple behavioral interviews.

7. Assess your options and complete the guide you made in Step 2. Compare your notes to other assessors

8. Make the investment...and hire!

A behavioral interview is key. So what is it exactly? First, you structure interview questions around the core competencies you identified. Then you ask candidates for specific examples of past performance to predict future performance. It would be even better to have the candidate perform the actual job in the real workplace, but that isn't practical. A behavioral interview can be as much as seven times more accurate than a traditional-style interview for selecting higher performers. 

If you search the Internet for “interviewing tips,” you will find 3.7 million entries. Every candidate is looking for an edge, and they are all searching the Internet for tips. Many candidates who have been downsized received coaching from “outplacement consultants” as part of the severance package. Every one of those packages includes training on how to stay in control of the interview so they can shine. As a result of all the training and interviewing experience the candidates have had, the interviewer MUST know how to not only ask the RIGHT questions but also maintain control and focus of the interview. They need to know when candidates are “blowing smoke” and when they are being truthful. Survey data shows that asking illegal interview questions remains a serious problem. Only 68 percent of interviewers were aware that asking a candidate’s age was illegal, 60 percent knew that asking whether a candidate was married was illegal, and only 56 percent knew that it was illegal to ask if a candidate planned to have children.

The last step is completing the decision guide you made for yourself at the start of the process. All interviewers review their notes and rate each candidate according to the predetermined and well defined requirements, or core competencies. Having this discussion documents the employment decision and helps to eliminate decisions made based on gut instincts.

So, why bother going through this effort? Following this process, business owners can be confident that they are:

• Selecting high-performing candidates who match the requirements of the job.

• Creating a positive impression on the candidate with their structured, organized approach.

• Sorting out the high performers from the non-performers, no matter how skilled the candidates might be at interviewing.

OPEN Cardmember Victor Bullara is the Managing Partner of World Class HR Consulting and a certified professional coach and certified behavioral interviewing master trainer. He specializes in helping business owners achieve breakthrough results. You can read his blog at http://hrstrategicpartners.net. OPEN Forum readers can request his e-book on “Hiring and Retaining Engaged, High Performing Employees” by writing him at vic@worldclasshr.com.

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