Many hiring executives undoubtedly wish they could turn back the clock and rewind to that fateful interview that ultimately led to all the trouble. The employee who seemed so right had turned into one of the department’s biggest mistakes: This is a common scenario. A new study that examines why new hires fail, from research and training firm Leadership IQ, estimates that 46 percent of all newly hired employees will fail within 18 months.
“Only 19 percent of new hires turn out to be resounding successes, the kind of employee that everyone looks at and says, no debate, this person has been a successful person. They’re a very good fit. They do their job very well. I’m glad we hired them. Everybody else is somewhere in between,” said Mark Murphy, chairman and CEO, Leadership IQ. “That was part one of the study—how effectively are we bringing people into the organization. And the answer is, not very. Step two is trying to figure out why.”
Contrary to popular belief, a lack of technical skills is not the primary reason why new hires fail to meet expectations. Many industries such as health care and information technology rely heavily on technical skills and advertise for the appropriate certifications or credentials that employees will need to be successful in their jobs. Further, many companies offer the technical training they need employees to have to ensure it’s there, in use and of a high standard, or else they sponsor employees to get the needed skills and knowledge from a trusted outside party. Performance breakdowns are more often interpersonal than technical. The study found that 26 percent of new hires fail because they can’t accept feedback, 23 percent don’t last because they’re unable to understand and manage emotions, and 17 percent lack the necessary motivation to excel.
“We find that so many organizations get hung up on finding somebody with exactly the right certification that they’re paying a lot less attention to whether or not this person has the people skills or the right temperament for the job,” Murphy said. “The reality is that it doesn’t matter how technically skilled you are, how certified you are. If you’re not coachable, if you can’t accept feedback, if you have no motivation for the job, you’re ultimately not going to help the organization a whole lot. Technical skills don’t matter nearly as much as we think they do.”
The study involved more than 5,200 interviews with hiring managers across a variety of industries, including health care, professional services, technology and manufacturing, who had the authority to hire prospective candidates. In-depth interviews revealed a variety of interviewing techniques and one very important question: Were there things that you picked up that maybe you didn’t act on during the interview process that might have indicated the candidate would not be a good fit? “If somebody did a fantastic job, were there clues that they were going to be really great? What took place? Was it possible to have identified that this person was going to flame out? We found that yes, there were clues. Some managers did a better job than others of paying attention to them,” Murphy said.
The most successful managers spent less time focusing on technical skills, Murphy explained, and more time examining interpersonal skills during the interview. “Is this person just looking for a job? Are they looking to do great things once they’re here? What drives them? Can you meet those needs? Are they going to accept feedback? Do they have a history of adapting and evolving? If we can go into the interview process knowing the major drivers of failure, we can spend a lot more time interviewing and assessing folks on those criteria.”
Before you even begin the interview or hiring process, Murphy said it’s critical to have some idea of what you’re looking for. Create a job description to address the issues and needs, and build softer interpersonal criteria into the selection process to weed out bad fits. “Google has done a great job of saying, ‘This is the kind of interpersonal skills we’re looking for.’ Yeah, we want people with 160 IQs and Ph.D.s in computer science, but at the same time you’ve got to be collaborative. You’ve got to be in this open, flexible, non-ego-driven kind of environment. That’s one of the success criteria, building these interpersonal kinds of descriptors right into the recruiting process.”
Not establishing better hiring practices bears significant financial and human costs. Murphy said that according to current statistics, replacing an employee run anywhere from 18 to 36 months of compensation, and the costs go a level deeper. “The next level down is the opportunity cost,” he said. “What are you missing out on if you’re spending 18 months to figure out that this person is a poor fit? How many opportunities are you not able to take advantage of because you don’t have a great person in that job role? Finally, there’s an even deeper level of cost. There are plenty of industries where having the wrong people in the job can cost lives. Look at the recently ousted head of FEMA in the Katrina debacle. Is there a legitimate cost, maybe even in human life, of having the wrong person in that job? According to the Institute of Medicine, roughly 98,000 deaths from preventable medical errors occur in American hospitals every single year. Those medical errors are by and large being caused by people. If we have people who aren’t accepting feedback—a nurse for example who isn’t communicating with a pharmacist or a pharmacist who is absolutely not coachable, won’t change his or her ways, and they’re writing the prescriptions out wrong and mislabeling them—the cost of having that wrong person could literally be a patient’s life.”