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Hiring the Right Talent

Collector,Jan 2010byGrace, Emily

http://www.bnet.com/

Examining recruitment and hiring processes helps companies retain the bestemployees

In every industry, companies face the challenge of identifiying and retaining the righttalent. There are many inherent costs associated with hiring the wrong talent,including increased turnover, management concerns, morale problems and productionissues. To select the right person for the job, companies must reevaluate their currenthiring and training processes.

"The biggest problem organizations are facing is having the wrong talent in the wrongseats," said Chris Young, founder and CEO of The Rainmaker Group in Bismarck,N.D., during an ACA-sponsored teleseminar on high achievers. "It is the silentbottom-line killer."

During his presentation, Young explained how the wrong talent can hurt anorganization in production costs alone. In his example, he outlined a breakdown oftalent collection performance:

* The top 20 percent collect $ 1 65,000 per year.

* The middle 60 percent collect $120,000 per year.

* The bottom 20 percent collect $95,000 per year.

In this example, the difference between a top 20 percent performer and a bottom 20percent performer is $70,000 per year. If a company with 50 collectors replaced thebottom 20 percent of its performers with middle performers, it could improvecollections by $250,000 per year. That number only grows with the number ofemployees in an organization. What if a company replaced the bottom 20 percent with

top 20 percent performers?

There is one problem with this calculation. Collection departments measure revenue,not what should or could have been. To make dramatic improvement in talentproduction costs, companies should implement strategic talent management decisionsto help realize their lost revenue opportunities.

The first step is to make the commitment to select better talent. Hiring is a criticalstrategic decision. It sounds easy, but everyone in the organization has to be on thesame page, and hiring should involve most departments within the company,including the CEO, human resources and lower-level management.

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Next, Young suggested measuring the cost of the current status quo and taking a lookat team member performance. Using a spreadsheet to rank collector performance willseparate the high and low achievers. Young suggested averaging the performancenumbers over a 12 -month period, only taking data from team members who havebeen with the organization for at least 12 months due to the high turnover rate.

After looking at the status quo, start analyzing the organization's bottom 20 percent,middle 60 percent and top 20 percent performers. Understanding and identifying thetraits possessed by high achievers can be a great way to benchmark differentpositions. The traits are usually identifiable and unique.

When benchmarking job positions, consider the behaviors, values and attributes of thehigh achievers. What do they believe in? Do they only want to make money? Do theybeh eve consumers who owe money should pay it, or do they want to help? One ofYoung's favorite interview questions is to ask candidates their philosophy on debt.

Once important high -performer traits have been identified, companies should onlyselect and retain people who possess those traits.

'Tve seen organizations keep talent who have been there since the beginning of timeor have weathered a battle,'' Young said. "The fact of the matter is if people are not fitfor the job, they will not produce WeIl."

Developing performance maximization plans for talent is the next strategic decision.Young believes every team member should be on a coaching program. The programcan be as simple as keeping the last three months of production numbers in front ofemployees, encouraging them and giving them techniques on how to improve.Discussing coaching techniques can help increase production and reduce turnover.

Regularly comparing performance levels against other co-workers (with or withoutnames) can hold employees accountable and keep a top performer from falling to amiddle performer.

"If someone has a bad day, week or month, someone should notice," Young said."The sooner it is noticed, the more quickly you can get that team member back ontrack."

Removing low performers quickly is the last step. Low performers require moreattention by management. Higher performers notice the extra attention and moraleissues ensue.

"The bottom line is organizations don't remove low performers quickly enough,"Young said. "If you're ever wondering if you should let talent go, ask yourself if youwould hire them again. If the answer is no, get them out of the organization."

So why do organizations hire the wrong talent? Human bias often plays a role. Humanbeings have a tendency to like people who are like them. Also, many times a seatneeds to be filled and managers use their gut instincts to make a hire. The traditional

interview process does not always achieve the best results.

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"One of the most costly decisions hiring managers make is measuring interviewingability rather than job competency," said Carletta Neal, senior consultant for TheOmnia Group in Tampa, FIa. "The reality is that the traits applicants exhibit during aninterview can be misleading and may cause you to make bad hiring decisions - onesthat will lead to frequent and costly employee turnover."

A Michigan State University-School of Business study researched the different stepsorganizations can take in the hiring process to improve the likelihood of a successfulhire:

* Interviews alone - 14 percent accuracy.

* Interviews and reference checks - 26 percent accuracy.

* Behavior-based personality assessment, reference checks and interviews - 38percent accuracy.

* Assessment of values, plus above steps - 54 percent accuracy.

* Benchmarking the job using personal attributes, plus above steps - 75 percentaccuracy.

There are more than 2,000 personality assessment tools in the marketplace. Somevendors offer analysts who can compare the candidates responses to job benchmarkssubmitted by the client and write assessments based on similarities or dissimilaritiesfound. By investing in these tools, companies can make better hiring and retentiondecisions that can improve their bottom line.

"Whether you're looking to hire, promote or develop a succession plan, it pays toknow all you can about an employee," Neal said. "To do anything less puts you, yourstaff, your customers and your entire business at risk!"

Emily Grace is ACA Internationals communications speciahst.

Copyright ACA International Jan 2010

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