Resumes Don't Tell the Whole Truth: Data Does
As a business leader, do you consider yourself a good judge of character? I certainly do. Once you’ve been around the block a few hundred times, you think you’ve seen it all…
Unfortunately, when it comes to making hiring decisions, the data says otherwise:
Gallup: Companies fail to select “the candidate with the right talent for the job” 82% of the time
FastCompany: 38% of companies made a bad hiring decision because they “needed to fill the position quickly”
Harvard Business Review: 66% of CEOs cited “talent-related issues” as their top business challenge
Great talent is not easy to come by in this economy and candidates have a myriad of options, making it essential for us to hire the right person for the job, quickly.
Why is our judgement off in this one area?
The obvious answer is that candidates want you to hire them. They highlight their strengths and work hard to hide their weaknesses, make their resumes look great, and provide their golden egg references.
We think we can see through the façade but when we hire a good faker the truth comes out in the end, often under bad circumstances.
Think of a time when you found out that someone you really liked for a role was not cut out for it at all. In the U.S. one-third of employees leave within 6 months, so you’re not alone.
What does this cost your business?
Your budgets likely include estimates for new employee headcount by department, but does yours include a separate line item for onboarding?
Does it include a line for employee replacement cost?
Does your budget also include lines for downtime between employees, effects on client relationships, months of pre-departure disengagement, effect on co-workers’ engagement, and other detrimental, less tangible effects?
I don’t imagine it does.
However, these are all costs your business suffers when someone leaves. Total cost per person can be estimated on the low end at 30% of an individual contributor’s annual salary to the high end of up to 300% of an executive’s annual salary.
That begs the question, why aren’t more companies using the right tools with the right data, if it’s out there and costs a fraction of losing a single $100k employee?
What can you do about it?
When it comes down to it, we’re looking for predictability through the tools that we use and traditionally, the ways to predict on the job success have been resumes, interviews, and references.
If we look at this breakdown of how common hiring practices actually predict on-the-job performance, we can start to see how unreliable they truly are:
- GPA: 12%
- EQ Assessment: 10%
- References: 7%
- Education: 1%
- Interview: 34%
- Integrity Tests: 21%
If you’re looking for the best predictor of performance, it’s a Cognitive Assessment. Cognitive does not measure IQ but measures (g) — general cognitive ability. It predicts the person’s ability to understand and process complex ideas and adapt to a new environment. People who can learn quickly provide faster ROI.
Once you know there’s a solution, it’s your obligation to do something
The reality is, it doesn’t matter if someone is a “great CFO”. It matters if that person is a great CFO for your company, under your leadership, in your industry, at this moment in time.
We help you use data to figure that out.
You don’t know what you don’t know but once you have the information, it’s up to you to use it for the greater good of your employees, business, and investors.
Are you going to keep using your intuition to do the hard work at a low rate of return or are you ready to let the tools do the hard work, increase productivity all around, and save yourself and your business massive amounts of money?