Hiring Process

 hiring an employee

Trouble finding good people?


Your best employee just quit. Longtime customers are upset, because your company doesn’t seem to know anything about them. Commitments and promises are being broken. Pending deals and prospects are being abandoned and falling through the cracks. 


Replacing an employee usually takes you a minimum of two month, and worse, even an experienced candidate will take three to six months to become productive.


Oh yeah…this is the third person to leave this year, taking your turnover rate to 27%.


Even when you are under pressure to quickly fill an open position, you'll save yourself a lot of trouble and money if you take the time in advance to get very clear picture of the “right person.”   Having a well-planned Hiring Process will allow you to reverse these statistics.


A Harvard University study indicates that 80% of staff turnover is due to hiring mistakes.  A fifteen-year survey of more than 20,000 hiring executives found that roughly 56% of newly hired executives fail within two years of starting new jobs. At that rate, you’d be better off flipping a coin.  Finding and hiring the right employee can make or break a company. Companies that do it well tend to perform better financially, have lower turnover rates and have stronger reputations within their market.


What’s the True Cost of a Bad Hire?

According to a study by the Corporate Leadership Council, hiring the wrong executive

can cost an organization as much as three times that person’s annual salary.  Another survey found that a “bad hire” cost up to five times their annual salary.  With a real cost of as much as five times annual compensation, making the right hiring decision is extremely important to your company’s health.



“Of all the decisions an executive makes, none are as important as the decision about people. Because they ultimately determine the performance capacity of the organization.”              
Peter Drucker


So How Do I Correct This?

Like most things in a successful business, hiring should be a process.  The first step is to develop a job description. Most businesses don’t have a job description at all. The ones that do are typically working from a perception of what they think is required to be successful in a particular job.  For example, Joe is a star performer….so they hire someone exactly like Joe, without any understanding of why Joe is successful.  List in detail everything the jobholder is supposed to do. What are they not supposed to do? How much decision-making authority do they have …on what type of decisions?  What tasks must they complete, what results must they deliver?


Developing a detailed job description will allow you to take the next step, which is developing a profile of your perfect job candidate.  What skills must they have, what experience will they bring with them?  Do their expectations match yours?  This detailed profile paints a picture of what your candidate should look like.  The more specific you can be, the better job you will do screening candidates. This also provides you with guidelines to manage by, once the new-hire is on the job


The next step in this process is finding and bringing in candidates that match the profile.  How do you reach candidates that match your profile?  Where are they?  What is the best method or medium to reach them?  Your usual ad, in your usual newspaper may not attract candidates that match this new profile.


You’ve determined what the good hire looks like. You know what qualities you are

looking for.  You’ve got a stable of candidates.  Now it’s time to interview…. Right?

….. Wrong.  The most common hiring mistake is relying too much on the interview.

The interview is an important part of the hiring process, but it’s only one part. Most

Managers tend to put too much weight on the interview. They are looking for that feeling

in their gut that tells them, “This is the one.” Unfortunately when it comes to hiring

most “gut feelings” fail miserably.


A University of Michigan study measured the usefulness of the interview in overall success on the job. It was found that the typical interview chose the best candidate less

than 2% of the time. Again, flipping a coin would improve your odds of hiring

the right person. But, this time it would be 48% better.


The problem is not the interview… It’s your gut.

Most managers ask good questions, but they don’t spend the time up front determining what the best answers should be, or what they mean. Without an understanding of what a

good response should be, the interviewer judges a candidate only on rapport and communication skills by default.


Go back to the Job Description and the Profile where you determined the skills and qualities that you’d like, then, look for those qualities to be displayed in an answer to each of your interview questions. Ask for an example of how they handled a hypothetical situation in the past and look for those skills and characteristics.  Count how many of the requirements they used.


Obviously, this brief description is not the same as your well planned and developed hiring process.  There are many more details that will go into an effective hiring process.  The point is that just like your Business Development Process, or other areas of your business, having a process for hiring allows you to generate a predictable, repeatable number of qualified candidates, so you can hire the right person, the first time.


At TAB Central Alabama we help business owner create effective Hiring processes, as well as other systems to better run their companies.