RECRUITING IS A CULTURAL STATEMENT WORTH EXAMINING
For years as a board member for various committees and organizations, I have been guided by the belief that if you are filling an executive vacancy of a successful company with a supportive culture, it is best to look to internal candidates. If on the other hand, the company is struggling and needs cultural transformation, an outside candidate can help jump start that process because they are likely to be less supportive of the present culture, better able to identify what is needed to reform.
I still believe that this logic seems appropriate. Transformational change requires different leadership and different ideas. The caveat being that change that we are encouraging by hiring a particular outsider is purposeful in that it is consistent with the change in culture that we hope to engender. What I have learned, often the hard way, is that most board members and managers don’t understand their present cultures and they are not mindful of all the ways that outsiders are likely to reshape the future of their organizations.
Historically, the vast majority of vacancies were filled by finding the best internal candidate for most positions including management positions. In the late 1970’s, nearly 9 in 10 jobs were filled by people who were already working for an organization. But, those days are long gone. Recent surveys have found that less a third of jobs are now filled by internal candidates and only 28% of HR leaders report that internal candidates are an important source of talent acquisition. There has been a gradual and accelerating trend toward recruiting outside talent even though more than 90% of all hiring is focused on the filling vacancies that exist because of voluntary turnover.
There is little evidence to support the notion that this move to external hiring has been an effective means of consistently hiring better talent. Despite an army of consultants and a boat load of available data, most leaders remain frustrated by existing talent management strategies. For example, the trend toward hiring outsiders not presently looking to change jobs (so called passive candidates), has often resulted in the hiring of people who don’t share the same priorities. A person who is happy in their present job can frequently be recruited if the difference in pay is significant enough. Should we be surprised that people who come primarily for pay will often be pay-focused when they arrive? It’s no wonder that according to a Price Waterhouse 2017 CEO survey and the latest Conference Board’s Annual survey, CEOs and their teams consider their ability to find the right talent the biggest future threat. In a world where every day brings a new mind-boggling discovery, we live in the middle ages when it comes to understanding the effectiveness of our hiring practices; by all accounts, we seem to know it even if we don’t know what to do about it.
There is substantial evidence, however, to support the notion that this trend toward hiring outside applicants has had unrealized effects on many cultures. When a preponderance of candidates are hired from the outside, the message sent in the present culture is clear and unmistakable. “Most of you will have to leave to advance.” Not much of a retention strategy. It can also lead managers to believe that development is less necessary and less valuable. “We shouldn’t worry about development, they are going to leave anyway.” Or, “Development is less critical, we’ll just hire the talent we need when we need them.” And, of course, less development leads to less engagement and less commitment. We should not act surprised by our engagement challenges if these are the messages that we are even unintentionally sending.
I am not arguing that hiring from the outside is bad or ineffective. I am arguing that we need to be more mindful of the trend and its cultural effects. Yes, we need diversity and recruiting outsiders can be an important part of our strategy to ensure that we are not living in the past. We are arguing that we need to be more mindful of the actions we take and their effects on our ability to build a great team and we need to learn to be better recruiters of talent. It must be the right people-- inside or out. As leaders, it is our job to evaluate the process. Putting the process on auto-pilot is a recipe for disaster.
We Have Met the Enemy and He is Us
“We have met the enemy and he is us.” Cartoonist and Pogo creator Walt Kelly’s parody of an old Naval quote seems appropriate when it comes to thinking about we get in our own way when we try to get the right people on the team.
Recently, working with a mid-sized service company whose growth had stalled, I learned how quickly a culture can turn. The management team had come to realize that they didn’t have the skills on the team, at least as they were presently organized, to compete in a marketplace that was transforming at warp speed. As they took a clear-eyed assessment of their challenges, they quickly came to the inescapable opinion that the majority of the hires that they had made over the preceding five years had been a bust. It also had become painstakingly clear that, in making these hiring decisions, many of the best people in the organization had left or been forced out while others had stayed, albeit in a less engaged way. This meeting had the feeling of Butch Cassidy and the Sundance Kid, realizing the challenges they faced, deciding to jump off the cliff yelling “Ah Sh**” at the top of their lungs because they had made a mess and had no choice but to change course.
The CEO and the management team were frustrated. Unwinding these hires would be costly and disruptive. They kept asking themselves, “how this could happen?” They had tried to be careful. They took time to interview these candidates, they checked references, they gave potential managers tests that purported to evaluate leadership potential and had let a broad swath of employees participate in the interview process. Still, bad leaders were hired, necessary skills were missing and many of the new hires did not share the core values that the CEO believed were fundamental to the organization’s past successes. How could the hiring process go so badly? How could they let top talent leave? Or more importantly, why did the best performers choose to leave?
As they struggled for answers, they simplified their focus and mindsets in moving forward with the following ideals and initiatives. I recommend the same for other organizations looking to make the most of their hiring process:
1. Continue to recruit your best players every day.
Yes, the ones that are already on your team; the ones that would be difficult to replace; the ones whose loyalty you have already secured. Throw them in the deep end. They can probably swim better than you think. The best learn quickly and will probably teach you that ‘the five years experience’ that you think you need when trying to hire someone is dramatically overstated and unnecessary.
2. Make sure that you hire talented people who share your values, especially when hiring outsiders
You can’t teach values. And most teams don’t have the time or resources to teach people basic, necessary skills. Interviews should be structured (to ensure less bias) and should be focused on ensuring that the candidate will help you get closer to your aspirational vision of the future.
3. Be mindful of the cultural messages you are sending with your actions
Sounds like common sense. But, it is not common for people to understand the present culture of their organizations. This has to change. The most powerful cultural forces in our organizations are tacit, unarticulated and operate at a level below our conscious thought. It need not be this way. Understand the present and think about the messages your actions are sending.
The way we recruit and hire are important to people and send strong messages that will guide future choices.
4. When in doubt, remember the best predictor of future success is past success
There is a reason why some companies prefer to hire college athletes. It is not because they can shoot a basketball or spike a volleyball. It is because they have proven that they can commit to an endeavor and persevere . They have lost and won. They are proven learners. People who succeed at what they do, succeeded for a reason and that is probably the most potent predictor of future success.
Hiring based on past hiring practices will lead to more of the same. Take the time to evaluate your methods before carving out a path to move forward. Tomorrow’s success may depend upon it.
