An IT manager buying a packaged application would almost certainly do so only after adhering to a templated, multi-stage selection process. But would these executives take as much care when hiring a staff member? Eighty-five percent of the human resources executives participating in the Aberdeen Group’s recent survey, The HR Executive’s Agenda, said attracting and keeping talent was the primary challenge keeping them awake at night. The fact specialists worry about it tends to suggest it’s no small matter. IT managers have a different set of skills and responsibilities from HR managers, so how consistent and repeatable are their own recruitment and selection processes?
Improved hiring management, says Aberdeen Group in its advisory Retaining Talent: Retention and Succession in the Corporate Workforce, entails better sourcing, screening and initial placement.
“The more a company can gauge the behaviour, character, and skills of a prospective employee before that employee is hired, the greater likelihood of a good fit,” the firm advises.
“Staff is a more serious issue than any software or hardware we buy,” agrees Muhammad Khan, acting IT general manager at the New South Wales Department of Environment and Conservation.
Khan’s department follows a formal interview template and does its own recruitment, but he emphasises that it’s bound by public sector rules and processes. Its HR service centre facilitates the process, by placing ads in government notices and collecting applications. It also prepares employment offers and carries out background checks.
“We arrange an interview panel and conduct interviews and reference checks. As director, I approve all the recommendations, except for very senior staff, where I myself sit on the panel.”
For IT managers, the analogy with the multi-stage process used when they are about to purchase a new packaged IT application can be helpful in understanding recruitment pitfalls, says Peter Hargraves. His interest in recruitment stems not only from his profession as a recruitment manager, but also his postgraduate studies in best practice recruitment at the University of Auckland.
Hargraves is manager of engineering and IT recruitment at Kelly IT, which has recently begun offering its services to the New Zealand market. He has over 20 years of IT industry experience in software development and system design, as well as in operations and project management positions at companies such as Open Systems, Digital/Compaq and Oracle.
“If you’re going to purchase a packaged application you set out a range of specifications and criteria, and you strictly measure each proposal against them. If you’re using structured interview processes you do exactly the same thing. But how many people don’t do that? If you’re going to hire people, their job is to make an application deliver the forecasted benefits.”
Martin Price established HR Equations, a human resources management consulting firm, in 2001. Previously, he worked as head of remuneration, head of organisational development and as human resources manager for a large Australasian corporation.
Extending the packaged application analogy, he says companies must forget that their staff are warm, living beings for a moment and think of them as a valuable financial asset.
“They need to work out the financial returns they get from their investment in people. For example, a well-designed recruitment improvement programme will typically produce a return on investment (ROI) of between 50% and 400%, with ROIs of 100% to 200% being commonplace. This is based on cost-reduction and productivity gains from recruiting better people more often, faster, with less cost and more productivity per new recruit.”
Until the company takes a financial investment approach to people issues, Price says, it will typically under-invest in its staff, put insufficient effort into managing its “human capital” and spend too much on physical things such as property, plant and IT systems. “Profits suffer as a result.”
Anne Buzeika, general manager of information services at the Faculty of Education at the University of Auckland, manages all of the university’s hiring for IT and planning. Treating potential employees purely as a financial asset wouldn’t work in an educational environment, she says.
“One of the key things I’m looking for in IT is ‘people people’. I need people who can relate to academic as well as general, technical and non-technical staff. I need them to be able to relate across the board. We’re looking for people who work well with other people in terms of team-play, and you don’t always get that if all you’re after is financial. We’re prepared to take on beginners and train them up.”
Unsurprisingly, when we asked our recruitment experts for advice on drawing up a shortlist of candidates, their recommendation was to use a recruitment agency. But Hargraves of Kelly IT emphasises that recruitment is a two-step process.
“A lot of people think it’s just about the creation of a shortlist of candidates.” The difficult component, he says, is selection. “To determine which candidates will have the best future on-the-job performance they have to go through a full, structured interview process.”
Many recruitment agencies offer CV referral services, so it isn’t difficult to amass a pile of CVs on your desk. But most hiring managers recognise that résumés contain truth and fiction, or a blend of both, and yet few have the time to go through each candidate’s CV point-by-point and ask questions based on employment history.
“Although there are a number of questions that can be asked to point out whether that job experience is real or fake, the hiring manager will often think that because the guy’s really nice he has to be honest,” says Hargraves. “Why would he be lying to me?”
Brian Pink is a government statistician and chief executive of Statistics New Zealand. Statistics NZ, he says, goes to reasonable lengths to ensure the shortlist of applicants that has been drawn up will produce the best result. “The real risk is selecting someone for a position he or she isn’t really suited to, because of the pressure to find someone.”
Khan, of Environment and Conservation (NSW), says his department is bound by the public sector process. “However, we can put some effort in to making the interview and reference-check process as extensive and diligent as possible. The effort will depend upon the nature and level of the job.”
IT managers often do not follow a formal recruitment process, but Hargraves says it isn’t just pressure of work or complacency that causes them to bypass this. “I’m not sure a lot of them are aware of what those processes are. How many hiring managers would be capable of producing a structured interview template?”
HR managers should work with their hiring manager to produce just such a template for each position, Hargraves recommends. “Insist that each hiring manager puts every candidate through the same structured interview process, taking notes of how they respond to the questions at the time, and then reviewing them with the HR manager at the end of the interview or the end of the shortlist process.”
For Statistics NZ’s Pink, a growing area of concern is the reliance on references — gone are the days when the integrity of the referees could largely go unquestioned. “Today, unless the referee is known personally to the selection panel, my advice is to treat referee comments with some caution. Certainly, don’t accept the candidate’s advice that his or her referees are above reproach. Personal networks, at least for more senior roles, can be another way of seeking independent feedback for more senior roles.”
Because it doesn’t always attract a broad enough pool of applicants, Buzeika says Auckland University has, in some cases, outsourced recruitment to employment agencies when looking for people with particular traits and abilities.
“We not only focus on what skills people are coming in with, but also on some of the things they’ve done outside of that. We often pick up someone who works well as a people person, not necessarily because they have IT qualifications but because they’ve worked in certain environments that align. We tend to be looking for fit as well as knowledge, but that’s only because we’re prepared to do the training here.”
Hargraves agrees that attracting enough good candidates is a perennial problem, but also that hiring managers often don’t interview enough candidates because they set their initial recruitment criteria too narrowly.
Predicting on-the-job performance
By the end of any good selection process, you should be in a position to make an informed judgement about each candidate’s potential. A well-structured, well-managed interview will give the panel confidence in the chosen candidate’s future performance. But Price, of HR Equations, says there must be the desire among chief executives and executive teams to create a formal HR strategy and HR business plan that supports and drives their overall organisational plans. He cautions that a lack of commitment to this may result in a company-wide perception that HR is just the “policy and process police”.
In other words, says Price, if you want the HR department to be good at predicting future on-the-job performance, get it involved at the business strategy and planning stage. “If they don’t know the business because they’re not involved, they won’t be good at predicting future on-the-job performance because they won’t understand the environment.”
Khan, of NSW Environment and Conservation, reckons he can predict a candidate’s future on-the-job performance with between 60% and 70% accuracy. “If I wasn’t bound by public sector constraints, I could raise this to above 90% with additional selection and elimination processes.”
One of the most important pieces of research Hargraves of Kelly IT has found, he says, is a table published in a book written and published by two New Zealanders who, at the time, were with the University of Auckland: Keith Macky and Gene Johnston’s The Strategic Management of Human Resources in NZ. “The researchers produced a selection validity index to show exactly how effective some of the tools and processes are,” says Hargraves. “For example, you may imagine that a ‘job try-out’ would have strong validity in predicting future performance. But in fact it’s lower than some other predictors, such as putting all candidates through an identical interview process, and behavioural questioning to identify real past performance and to predict future performance.”
The least useful predictors, according to Macky and Johnston’s research, include age, handwriting analysis and job experience in years. Information from a CV is slightly better, but still well down the list of useful predictors.
Don’t get fooled again
There are reasons why certain predictors aren’t accurate. For example, candidates can fake attitudes and work-rate for the short term of a job try-out. Experienced recruitment practitioners tend to understand this and structure their selection process accordingly. However, people inexperienced in selection often do not.
When the long-term survival of the organisation depends on the quality of people being hired, what might appear to be a convenient strategy can prove costly over time. False economies include:
• Delegating recruitment to inexperienced members of the management team
• Choosing the lowest-cost recruitment provider
• Using a friend-of-a-friend who works in a recruitment company
• Paying existing employees to refer a friend.
While there is no denying strategies of convenience can work at times, they are unlikely to provide consistent and predictable quality. Recruitment may not be rocket science, but Kelly IT’s Hargraves warns selection can be just as complicated and almost as explosive.
We’ve all been in a similar situation at one time or another: you’re under pressure to make a quick hire. A candidate turns up for an interview looking almost exactly like the person you’ve envisaged for the job. You ask her a few cursory questions and she makes all the right noises. She’s got the job, and you’ve introduced a potential time bomb into your organisation.
A popular way of making selections among New Zealand hiring managers is what Hargraves refers to as the “fireside chat”: a candidate is asked a series of leading questions which include or imply the correct answer, and is thus able to give the interviewer exactly what they want to hear. “They look exactly like the kind of person that the hiring manager has envisaged and the decision to hire is made within the first 30 seconds. Those hires have a high potential for recruitment failure,” Hargraves warns.
Price, of HR Equations, agrees that interviewing is a learned skill, requiring hiring managers to be vigilant for candidates who might try to pull the wool over their eyes. “Learn how to ask questions at interview, and when doing verbal references dig out the existence of the behaviours you must have for the given job.”
Many recruitment experts believe behavioural questioning is an essential interview tool because using past on-the-job experiences allows interviewers to predict future behaviour, and avoid the ‘leading question’ trap.
“If you just ask: ‘How important do you think it is to work closely to specifications?’ everybody says ‘very important’. The behavioural question is: ‘Tell me about a time when you found it effective to work outside the specifications’. If someone tells you that specifications are a waste of time and you may as well just go and talk to a user, you’ve uncovered a potential nightmare,” says Hargraves.
Buzeika at Auckland University also prefers competency-based interviews to those in which questions are asked about hypothetical situations. “We don’t want the person who says, ‘In this situation I would do this.’ We get them to describe situations they’ve been in and talk about them. People give you a lot more information if they’re talking about something they’ve done, and we haven’t yet been tripped up by people who’ve made up their stories, because you almost can’t. With new and inexperienced people we’ll ask: ‘During your studies, did you ever work on an assignment with others? How did you find it, and what role did you take if there was conflict?’”
“I have never used behavioural testing,” says Khan of NSW Environment and Conservation. “I have been through that myself and find it very helpful. However, it’s very hard to use it in a public sector selection process.”
“We have our own recruitment consultant as well as using agencies,” says Dianne Dumper, Axon Computer Systems’ human resources manager. However, Axon does not consider behavioural testing to be essential.
Statistics New Zealand has used behavioural testing for a range of management roles, as well as for its graduate leadership programme selections, but only as one part of the overall assessment process, says Pink. “Done well, and with the willing participation of the candidates, it can be a very useful input to the selection process and is seen as being of broader value by most candidates.”
Good news for loners?
While he recognises the importance of teamwork, Hargraves of Kelly IT admits to a personal bias regarding the prominence of the team-player in recruitment advertising and interview questioning. “There’s too much emphasis placed on it,” he says. “And I think that’s a real problem for New Zealand as a country. Research coming out of the UK and the United States says the most stressful thing for people these days is having to work as part of the team. It’s not getting the work done, or using their skills and abilities. There’s non-stop talk about teamwork in our organisations, and enormous pressure to perform as a team member. Not everyone is a fabulously happy, laughing team member. The stress for those people to go in and force a smile is a real problem.”
With the exception of a very small number of specialist IT workers, though, Pink says being able to fit into a team environment is essential at Statistics New Zealand. “In our environment, this often means multi-disciplinary teams involving statisticians and methodologists, as well as technologists. Luckily, we’re large enough to have the flexibility to generally be able to fit a new staff member into an appropriate workgroup. In our selection processes we look for people with initiative, good problem-solving skills, an ability to look at problems in a holistic manner, interpersonal skills and a track record of delivery as part of a team.”
Buzeika of Auckland University emphasises that what she refers to as a “team player” is seldom someone working collaboratively on projects with a group of other IT workers. “Most of the time individuals are working individually, but the attitude of support and initiative usually comes under the heading ‘teamwork’, and I wouldn’t like to employ people who didn’t have the attitude that they support others, or take the initiative and step in if they’re needed.”
If it’s a requirement, a candidate’s ability to work well with other team members should come across strongly as a behavioural trait in their interview. “Hire for behaviour, train for skills,” Price of HR Equations recommends. “As a generalisation, it’s much easier to teach someone a new tangible skill — for example, repair certification — than it is to change inadequate behaviour.”
Previous behaviour can be a valuable indicator in finding political animals who would prefer to take shortcuts to career success at the expense of their workmates. “I will often ask: ‘Tell me about a time when you went and asked someone else for help’,” says Hargraves. “That’s a much more difficult thing for people to do, and political types will actually never go and ask someone for advice.”
Recruitment and retention challenges New Zealand’s skills shortage, and is real and quantifiable, says Hargraves. “In the year ending July 2005, net migration growth in New Zealand was 8,000 people. That was made of up of 78,000 new arrivals and 70,000 New Zealanders leaving. Probably all of them had some kind of diploma or qualification, so they’re the employable ones.”
Statistics New Zealand’s figures support his assertion: permanent and long-term arrivals exceeded departures by only 800 in November 2005, on a seasonally-adjusted basis.
Buzeika of Auckland University agrees that the skills shortage has worsened in recent years.
“When we advertised for a basic user support job, we used to get 200 to 250 applications. Now, when we advertise we get a couple of dozen.” She agrees that a lot of good people have left the country and that the job market has changed as a result. “Most of our employment has been at basic, user support-level, and those people only want to do that for six months because they really want to get into networking or systems. The career opportunities seem a lot broader and they’re aiming for bigger opportunities, whether here or overseas. That makes it more difficult for us to retain them.”
Price, of HR Equations, says organisations need to be prepared to spend more time and money on formal retention programmes. “It will often mean noticeably improving the quality of coaching and mentoring that line managers give all their staff, and ruthlessly targeting the very top performers for special treatment. Those are both meaty issues and, while there’s lots of upside, it’s a calculated risk to tackle them.”
Hargraves of Kelly IT has just one tip for keeping staff happy in their roles once they have been hired: “Share the company’s long- or short-term strategic goals. Annually, identify where the employee fits in and exactly what their contribution should be, and how it will ensure that the company gets there. Measure it and provide them with feedback. If everybody in the organisation understands that, you will have a strong-performing company.”
Aberdeen Group also advises hiring managers to build a succession programme because it’s not a matter of whether executive change will happen, but when. Startlingly, the analyst organisation found that only 63% of its respondent organisations had such a succession plan.
No wonder so many human resources executives are losing sleep.