We’ve been here before. In the late 90s the demand for technical talent was so great that organizations engaged in bidding wars simply to stay in business. Dubbed the War for Talent, management experts warned about the perils of relaxing standards for the selection of talent at such time as when organizations were in the most need. For most, it was too late.

Fierce negotiations and skyrocketing compensation packages were the talent-based equivalent of surging petrol prices during the great oil embargo of the 70s. For some, no amount of money could buy the talent so desperately needed. They were stuck with what they had - and what they didn’t.

Here we go again.

With unemployment rates at historic lows, organizations once again find themselves confronted by the fool’s choice: bad (or, expensive) talent or no talent? (Ironic, isn’t it, that the same organization that matches employees’ contributions to retirement plans and maintains a succession plan for top executives with two “ready” candidates, finds itself overspent and understaffed on talent?)

From a safe distance we can see the folly of hiring at a time of dire need, just like we can see the wisdom of contributing to a compounding savings fund for future financial needs. Nevertheless, the firestorm of desperation hiring burns the fuel for future growth. I see it all the time: buying at the peak of the market and selling at the first sign of a lull.

Regardless of how we got here, we must face reality. Hires must be made. Sticking with reality, that hire is going to cost you more, now that you need them, than they would’ve when you didn’t {seem to} need them so desperately. You have a choice, pay big bucks for some body or paying big bucks for the right body. The difference between the two hangs on the rigor of your hiring practice. Do you have the skill to assess talent well? Do you have the discipline to select only the well qualified?

Selection using proper psychological assessment is like pan-seared salmon; it’s both rare and well done.

Some will claim that I’m out of touch with what really happens on the streets of Poughkeepsie. After all, I am at that “safe distance” from the action. Don’t I know about fundamental economic principles of supply and demand? Don’t I understand the lunacy of forgoing business for lack of workers?

Actually, I do. And it’s still wrong to relax hiring practices or standards – especially when desperate for employees.

Desperation is a symptom, not the cause. When an organization finds itself desperate for employees, for any reason, whether surging sales or shrinking productivity, it’s the result of poor talent management and planning. The organization isn’t ready. And when an organization isn’t ready, it’s missing out on profits. Economics 101.

You don’t have time for bad firemen when Rome is burning.

But here’s why a bad hire in bad markets (sales or labor) is worse than the same hire in kinder markets. You don’t have time for bad firemen when Rome is burning. Moreover, the damage of retaining a bad hire can be seemingly apocalyptic.

Hiring talent is like a setting fishhook; it’s easy to put in but difficult to yank out.

I’ve made my case for “front end” selection, but dealing with the “back end” of desperation hiring is worse. Hiring talent is like a setting fishhook; it’s easy to put in but difficult to yank out. And it creates considerable collateral damage. A bad hire is lame at best; lethal at worst. And that doesn’t include the joys of their removal.

Two large-scale studies I did in an organization comprised of multi-unit restaurants revealed convergent results. The first found that 50% of all employees that quit did so due to their "brow beating, denigrating, micro-managing boss." {My words to approximate the emotional translation} Even if this number is inflated by sore quitters taking a free jab at their boss, it still dwarfs any other reason given for quitting, including pay and promotion opportunity. The second study found that using a validated personality test successfully predicted which new hire restaurant managers became high producers (i.e., greater sales) and better leaders (i.e., well run, low employee turnover).

But there is a limitation in my research. While the results suggest that good leaders get good results and have low team defection, the story may be more truthful centering on bad leaders that get bad results and have high team defection. Either way you look at it the results are in the same ballpark. It is possible that the bad managers pull the lion's share of the results of this study, thus lending stronger support to my argument against hiring questionable talent.

At the end of the day, you have a decision to make. It would be a mistake not to have good selection.

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Published by R. Chris Steilberg, PhD

Endlessly curious about why people do the things they do and the connections and differences among us. For every 'thing' I learn, I realize more that I haven't. I guess I'm on a full-out quest for relative ignorance.

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