How to hire in a tight labour market – without 16 interviews

Multiple interviews won’t always help you select the best person for a job. There are other ways to hire well.

Picking the perfect candidate for a job is not just about extensive interviews.

A bad hiring decision is expensive. Replacing an employee costs companies anywhere from thousands to hundreds of thousands of dollars. And this might just be the tip of the iceberg, as a poor hire also will have indirect costs, such as affecting morale and company culture.

In an effort to minimise costs, many companies have adopted extensive hiring processes that can veer bureaucratic and lead to damaging inefficiencies.

Hiring decisions today often involve numerous rounds of interviews – some can go to up to 16 – plus lengthy background checks, among other steps. There’s no strong evidence, however, that it’s actually even working.

Especially in cross-functional organisations, a new hire often will need the support of a multitude of colleagues to be successful. It can therefore seem respectful to let everyone who will be involved in a person’s success have a say in them being hired. And once a colleague has interviewed a candidate, ignoring their reservations risks coming across as disrespectful. As a result, many companies have developed consensus-oriented hiring cultures.

The bureaucratic method is also sometimes rooted in hiring managers trying to protect their careers.

They may have seen how a colleague has been reminded about a poor recruiting outcome and, as a result, lost status in the organisational hierarchy.

Or it may be due to loss aversion, the well-established bias in which the pain of committing a mistake is psychologically twice as powerful as the pleasure of making the right decision. In reality, the bureaucratic method of hiring destroys a lot of value by missing out on stellar candidates while adding little value.

IS THE COST WORTH THE BENEFITS?

The current historically high number of unfilled jobs, 50 per cent higher than the prior record, poses a question: Is a cautious approach to recruiting worth it if doing so means we leave money on the table by having unfilled revenue-generating positions?

One reasonable answer is maybe. If it improves the quality of hires, it may be worth the effort. That’s a big if. Our strong recommendation is to invest the time and resources needed to test that if. In our experience, it is nearly always assumed that asking job candidates to jump through extra hoops and rejecting candidates as soon as a colleague expresses the slightest doubt about them improves the quality of hires, but this assumption is rarely tested.

One firm we worked with was short of about 100 sales reps. Each prospective hire had to go through five to six steps before interviewing with the ultimate regional hiring manager. Some of these hiring managers would then extend job offers to three-quarters of pre-vetted candidates, while others would offer only a quarter of candidates a role. On reviewing their data, we were able to show them that the more selective hiring managers did not pick better performers and left a higher number of roles vacant for longer. As each unfilled sales position cost the company more than $US100,000 ($143,000) in margins, it was easy for the firm to understand the cost of this unnecessary practice.

An opposing view is that defensive hiring practices may help you avoid an occasional poor hire, but at some point the marginal benefit is so small that it’s not worth it.

In its review of its hiring processes, Google discovered it could capture 86 per cent of the value produced by interviews in the first four interactions. While each additional interview would increase the predictive accuracy by about a percentage point, Google decided this was not worth the cost, including the risk of losing good candidates. Following a similar logic, Amazon has settled at five interviewers per candidate.

TRANSITION TO BETTER PRACTICES.

Even if you recognise that defensive hiring practices are hurting your chances of landing great candidates, switching your organisation’s hiring practices may be easier said than done. Here are a few measures you can take to nudge your organisation in the right direction.

1. Reduce the number of interviewers.

If you have more than four or five interviewers, chances are the costs associated with the additional complexity in your process have exceeded the benefits they produce.

2. Be explicit about whose decision it is.

Steer your organisational culture away from a consensus-oriented approach. Instead, for each role make it explicit whose decision it is, who else may have veto power, and that other interviewers should not be offended if a candidate is hired despite not getting their approval. Reiterate this message until most of your colleagues adapt to this new approach.

3. Ask interviewers to use numerical ratings when evaluating candidates.

Doing so helps hiring committees focus on the holistic view rather than on one-off negative comments. Having interviewers submit their ratings before getting input from their colleagues will further reduce the chance of groupthink in your evaluations.

4. Remove the “Dr Deaths” from your hiring committee.

Track which interviewers turn down the most candidates, and if they are not better at picking good hires, communicate with them that they will be removed from the hiring committee if they don’t correct their behaviour.

5. Change your culture to reward those who spot great hires, not penalising those who end up with an occasional poor performer.

You can further do this by emphasising the difference between good decisions and good outcomes. If necessary, call out those spreading negativism.

Changing your company’s consensus-oriented hiring culture will not be easy. But the steps listed above can help you gain an edge in your industry.

Atta Tarki is the founder of executive-search and project-based staffing firm ECA Partners. Tyler Cowen is co-author of Talent: How to Identify Energisers, Creatives, and Winners Around the World. Alexandra Ham is the founder and chief executive of TalentCompass.