How to make better hiring decisions

In leadership, everyone agrees that management decisions are the most important and that the quality of decisions depends largely on the people making them. Yet, when it comes to deciding who should be deciding (e.g. hiring decisions),  the decision-making quality decreases quickly.

In fact, research shows that 50% to 70% of executives fail within 18 months of taking on a management role, regardless of whether they were an external hire or promoted from within.

How can managers and leaders decide on budgets and strategies with costs in the tens and hundreds of millions and yet fail at hiring?

The reasons for this vary and include:

• Overconfident managers who believe they are excellent and making people decisions;
• The belief that strong managers make hiring decisions quickly;
• Dysfunctional management folklore like hire fast, fire fast, and I’ll recognise the right person when I see them;
• Various biases linked to age, gender, first impressions, chemistry, etc.

In short, it’s about rationalising intuitive decisions, often based on pure liking and usually made within the first few minutes of meeting a candidate.

The triggers behind our decisions

When you first meet a candidate, you get a lot of information on the candidate. Most of which is unnecessary noise. Your brain gets overloaded with all this new information and suggests a simple solution as a defence mechanism. 

The solution includes all kinds of stereotypes and other simplifications, which in the end says - hire this candidate. Hire this candidate who reminds you of your friend, who seems smart, and so on and so forth.

And if you follow this common process, you will end up with hiring mistakes. But you are not alone. When asked, 50% of managers are not sure they would hire the same candidate again. And even worse, in most cases, the mistake is not corrected.

Why? To correct a hiring mistake, the hiring manager would have to admit that they have made a mistake.

Luckily hiring is not some black magic that only a few people can master and a few tweaks to the process can have massive effects on the outcome.

Step 1 - Find the right criteria for success in the role

The right criteria are the basis for a successful hiring process. It ensures that you start with the right assumptions and concentrate your efforts on finding suitable candidates from the get-go.

Without a thorough job analysis, it’s easy to waste valuable time interviewing candidates that aren’t a good fit.

Job analysis is a three-step process whereby you define:

• Position-specific key performance indicators (KPIs);
• Basic or threshold criteria;
• Position-specific competencies.

The KPIs describe the objectives the new employee has to achieve to be considered successful. Threshold criteria include the experiences, qualifications, and skills required to achieve them, while competencies help distinguish superior performance from the average.

Learn more: Job analysis with Wisnio - a practical example

Self-check question

What is the basis of a successful hiring process?

1. Trusting your intuition
2. The right criteria, along with proper evaluations
3. The mantra "hire fast, fire fast"

Step 2 - Evaluate each candidate according to each criterion

It’s important to evaluate each candidate separately according to each hiring criteria. And only ask questions that help in evaluating against your previously set criteria.

Brain teasers and questions about hobbies and such do not help in making a hiring decision. To help with evaluations, we recommend using a standard evaluation sheet/scorecard with separate areas for each hiring criterion.

Learn more: How to use hiring scorecards for better talent assessment

Step 3 - Make the hiring decision

Once you have finished all the evaluations, it’s time to summarise the results and make a hiring decision.

This is where all the previous work on coming up with hiring criteria and using them for candidate evaluations comes in handy. Simply take the average scores from each candidate and make your decisions!

What about gut feeling?

Now, even after going through the process, you can have the temptation to use your intuition or gut feeling when making a decision. After all, sometimes it seems that the decision is so obvious.

And indeed, a small survey we ran among one of our recent webinar participants agreed. 100% of participants agreed that intuition does play a role. 44% of them agreed that intuition sometimes played a role, and the rest concluded that it always played a role:

Additionally,  research into intuition and hiring by Daniel Kahneman shows that using it does not hurt the decision-making quality. That is if certain conditions are met.

His research showed that as long as intuition is used after going through the above process of picking the right criteria and then evaluating based on it, it largely aligns with the overall evaluation results.

If, on the other hand, you use intuition as the sole or primary evaluation tool, the correlation disappears. Meaning that intuition alone is a terrible predictor of success.

Self-check question

Does gut feeling play a role in hiring decisions?

1. Yes! I can decide within the first few minutes if the candidate is a good match.
2. No, gut feeling has no place in h
3. Yes, as long as you pick the right criteria and evaluate candidates based on them.

Conclusion

When we first meet a candidate, it’s easy to get overloaded with information. Most of which is unnecessary noise. As a defence mechanism, our brains suggest a simple solution.

The problem is that this easy solution is riddled with various biases, stereotypes, and other simplifications, all of which decrease the decision-making quality.

Fortunately, hiring is not some black magic that only a few people can master, and a few tweaks to the process can have massive effects on the outcome.

In short, use a scorecard that includes:

• List of all the candidates;
• List of all evaluation results for all criteria;
• Choose the candidate with the highest score.