Tips for Making Better Hires

Bad hires can cost plenty. A new book proposes four deliberate steps to hiring the right person for your company's needs and culture

As the United States slips into a recession, it's not surprising that many managers are reassessing their corporate strategies. But in a compelling read, authors Geoff Smart, CEO of management assessment firm ghSmart, and Randy Street, president of ghSmart executive learning, make the case that managers' biggest problems may not be what they're doing—but who they are hiring.

In their new book, WHO: Solve Your #1 Problem, Smart and Street draw upon insights from 300 CEOs and more than 20 business billionaires to identify the four parts of the hiring process where managers make critical mistakes. Managers only hire the right person for a job 50% of the time, according to Smart and Street. And they estimate hiring mistakes cost companies 15 times an employee's base salary in terms of both hard costs and productivity loss.

Smart and Street argue in their book that such hiring mistakes are preventable. They urge employers to rely less on traditional, more instinctual, approaches to hiring that many managers use, which they call "voodoo hiring" techniques. Among them: relying on gut impressions, using gimmicks to test for certain behaviors, and asking hypothetical questions about the future.

The authors lay out a more systematic, four-step approach to avoid common hiring traps in fewer than 200 pages:

Make a Scorecard

First, they suggest managers develop a scorecard for the position they want to fill so that they can avoid just hiring the person with the most impressive résumé. Smart and Street challenge conventional notions of the "a player." Instead, they argue that managers should aim to hire the best person for the specific job they hope to fill as well as the best fit for the company's culture. By clarifying the essence of the job's mission and what someone in that position should achieve, scorecards help managers identify what specific competencies the ideal candidate should have.

Next, they outline techniques for sourcing top talent. They encourage managers to view the process not as one they should engage in only when they have a job to fill, but something they should work on constantly. For example, the authors suggest managers should integrate the question "who are the most talented people you know?" into their regular routine whenever they meet new people.

The authors' third recommended step involves using a series of four interviews, with the first being a quick screening call to the interviewee and the fourth asking probing questions to references.

Reel them in

The fourth and final step is to sell an ideal candidate on coming to work for a manager. Smart and Street offer five reasonable suggestions, including taking into account a candidate's family's interests, and tying together the company's vision, needs, and culture with the candidate's goals, strengths, and values.

Some of the methodologies suggested by Street and Smart seem basic. But the anecdotes they have collected from other managers who have struggled with hiring make the book a brisk and rich read. For example, they share an experience in which an interviewer, by doggedly asking an interviewee to talk about how he believes past co-workers and bosses perceived him, eventually discovered that the he had snuck into his boss's office and bugged it. (Wrong answer, by the way.)

Hiring the right people is as much art as science, and Smart and Street offer some good proposals for producing better outcomes.