Hiring hurdles: Facts and fallacies

I just came back after a session on hiring. It was a leading bank and they wanted to train their functional managers who are involved in interview panellists in selecting employees. On my way, I was reflecting on hiring in the Sri Lankan context. Today’s column will discuss the details.

Strategic context

Ulrich and Brockbank (2005) propose six Bs with regard to selecting and developing employees. In fact they are strategic, as the consequences are long term, with high impact to the bottom-line.

The six Bs simply refer to buying, building, borrowing, bouncing, binding and boosting.

Buying: This covers the aspect of staffing. With the increased competition among the organisations to become the “preferred employer” or “employer of choice”, attracting the right talent to one’s organisation is the key aspect in focus. Building of relationships with key sources of talent, use of referral hiring, building a web-based hiring strategy and targeting of potential employees can be considered as some of the key initiatives.

In the Sri Lankan private sector, especially in the services, a considerable shift is seen from the traditional methods of recruitment to more innovative approaches. With stringent policy framework and centralised approach to recruitment, public sector is lagging behind in most of these initiatives.

Building: Choices in training and development are captured here. Identification of training and development needs is of utmost importance in this regard. Having clarity on programme participants, presenters, designers, coverage, delivery methods and expected behavioural changes are some of the vital components associated.

A growing emphasis on training effectiveness with proper mechanisms to measure is seen in the Sri Lankan private sector. Use of Kirkpatrick model to assess training effectiveness at different levels is one such approach. Return on Training Investment (ROTI) has slowly become a critical factor in the local scenario as well, in justifying the monetary allocation for training and development.

Borrowing: This encompasses the choices in contracting for talent. In other words, non-core jobs of an organisation can be performed by outsiders, preferably adhering to pre-determined specifications and quality parameters. Forming of joint alliances, visiting benchmarked sites, retaining consultants, outsourcing of work, and maintaining relationships with former employees can be considered as some of the key initiatives.

With the ever-increasing focus on cost management, many Sri Lankan organisations growing have already resorted to ‘borrowing”. Pressure from trade unions and several outdated labour laws are seen as barriers in moving towards this direction.

Bouncing: Choices in shrinking the workforce are covered here. Rightsizing by way of involuntary downsizing has become a buzz word in this regard. Whilst the business case is clear, the humane aspect of treating the low performers not only firmly but also fairly is important.

In many volatile industries, bouncing is more becoming a business necessity. Industry pressures to stay competitive have propelled organisations to take this path. The employee-friendly nature of Sri Lankan labour laws has come to the rescue of some of the victims of bad management decisions by their respective organisations.

Binding: This refers to the range of choices in retaining talent. Having developed the knowledge and skills of high performers of any organisation, seeing them leaving is the last thing an organisation would like to see. Finding out why talented people leave and taking appropriate actions to arrest the outflow should be high in the HR agenda. Offering of a variety of financial and non-financial rewards to stay has also needs to be strengthened.

Encouraging evidence can be found in many leading organisations in Sri Lanka. Yet, the reality remains that, when overseas opportunities are galore with unmatchable financial offers, employees tend to seek better prospects. As we discussed in several earlier columns, effectively engaging the employees with a clear purpose can be a sure-cure in arresting the rot.

Boosting: Choices in promoting the employees are captured here. When a career ladder is available for them to climb, and when the organisation is genuinely providing the support and encouragement, chances of them contributing better in a more committed manner is high. Establishing criteria for new jobs, allowing volunteers to take up challenging tasks, evaluating candidates’ potential, supporting of new job holders are some of the key actions in this regard.

With rapid expansion of businesses, opportunities for promoting are on the rise, in many Sri Lankan organisations. With the increased responsibilities, the required knowledge and skills level also has to be expanded.

Cost of poor hiring

A poor hiring decision can cost as much as five times the employee’s salary (Jackson and Schuler, 2003). The US Department of Labour estimates that a bad hiring decision equals 30 per cent of the employee’s first year’s earning potential (Hacker, 1997).

It is pertinent to mention what David Oglivy, the advertising tycoon, had to say with respect to hiring: “If each of us hires people who are smaller than we are, we shall become a company of dwarfs, but if each of us hires people who are bigger than we are, we will become a company of giants”.

In order to hire people with potential, the hiring process has to be professionally designed and executed.

 Sri Lankan research

I guided two of my MBA learning partners (students) to conduct a related research. We looked at the reasons behind the success or failure of selected Sri Lankan organisations representing the service industry. We raised a basic question: What factors influence Sri Lankan service sector companies from hiring the right person for the right job?

Some of the factors that lead to ensuring person-job fit in hiring can be identified as process related, people related and policy related. We attempted to identify details of above triple factors through existing literature. Once the collected data were analysed, we could find supportive evidence for each of the above categories.

Process-related factors

They deal with the mechanism of hiring. Some of the key elements are:

• Job description/job specification: The availability of updated job descriptions and job specifications and their use in the selection process is considered to lead to effective selection. The job description can be viewed as a “list of a job’s duties, responsibilities, reporting relationships, working conditions and supervisory responsibilities”.
• Screening of applicants using Curriculum Vitae (CV)/application forms: Effective screening of applicants using CVs or an application form is considered to lead to effective selection. The CV is more commonly used for senior positions and employees applying for relatively junior positions may be asked to fill in a standard application form prepared by the company.
• Effective testing: Different types of tests are available for testing an employee’s suitability for a given job. In order to lead to effective hiring, literary sources indicate that they must have the following characteristics. It should be both valid and reliable. Validity refers to the accuracy with which a test measures what it purports to measure or fulfils the function it is designed to fill. Reliability deals with the consistency of scores obtained by the same person when retested with the identical tests or with alternative forms of the same test. According to Cushway (2001), work sample tests, ability tests and even personality tests have higher validity than a structured interview.
• Effective interviewing: Whatever the issues are, the interview remains the main method of assessing person-job fit. The following are stated by various authors as practices that increase the effectiveness of an interview.

a.Pre-interview preparation in terms of reading the application form, reviewing job description and job specification.

b.Structured interviews in following a set sequence of questions.

c.Use of situational interviewing techniques, where a series of job-related questions that focus on how the candidate would behave in a given             situation can be involved.

People-related factors

They deal with people involving in the hiring process:

Using trained interviewers: The interviewers should be training to avoid biases that can prevent optimal hiring decisions. Also the knowhow on the process and techniques of conducting an effective interview can increase the effectiveness of the selection decision. We observed the negligence on the organisations to prioritise this.

Extent of line and staff coordination: A line manager is usually referred as “a manager who is authorised to direct the work of subordinates and is responsible for accomplishing the organisation’s tasks”. Whereas, a staff manager as “a manager who assists and advices line managers”. Human resource managers, for example, are staff managers.

Policy-related factors

They deal with people involving in the hiring process:

nPresence of anti-Nepotism policies: Peters and others (1998) define nepotism as “showing favouritism toward relatives, spouses or children of current employees when hiring new employees”. Policies against this practice enhance better hiring. We could see several encouraging scenes among the sample.

nPreference for hiring within: The key here is maintaining a delicate balance between “existing blood” and “new blood”. In some cases, this factor may deprive the organisation of fresh ideas and creativity. We could see several such issues hampering organisational performance.

Recommendations

Based on the study, the following key recommendations can be made:

nUpdated job descriptions and job specifications should be available for each position and these should be used in the selection process.

nSelecting the appropriate test in predicting future performance on the specific job is of importance.

nManagers should be trained on effective hiring, with special emphasis on interviewing skills.

nManagers need to actively pursue anti-nepotism practices. If not, the results will reveal the inaccuracy of the hiring decisions. Formulating anti-nepotism policies and by educating everyone who has responsibilities in hiring regarding the policy and its implementation.

Way forward

By ensuring the due attention to the above recommendations will pave the way to managing the six Bs with regard to hiring. Thereby, hiring hurdles can be surpassed with much clarity and consistency. However, with the current understanding, it is clear that a lot more has to be done in order to ensure person-job fit in the Sri Lankan service sector.

(Dr. Ajantha Dharmasiri is a learner, teacher, trainer, researcher, writer and a thinker in the areas of Human Resource Management and Organisational Behaviour. He can be reached on [email protected].)