Revisited: Talent vs. Culture in Hiring Philosophy

Let me be very, vet clear about this: If you only have time for one podcast in your life that podcast should be the HR Happy Hour Show. We are closing in fast on 250 shows in the HR Happy Hour archive, and Trish McFarlane and I have lots more great stuff to come this year and beyond.

 But if you are like me (a little bit of a podcast nerd, admittedly), you like to mix up your podcast diet and sprinkle in some other choices. For me, one of the podcasts I almost always catch is the Bill Simmons podcast, which is probably 85% about sports, but mixes in enough other topics (pop culture, politics, tech and business), to make it a good listen even if you are not a massive sports fan.

Recently, Simmons did a show with Silicon Valley investor Chris Sacca, most well known for being an early investor and advisor to companies like Twitter and Uber. Prior to his pivot to investing in startups, Sacca was a relatively early employee of Google, (from about 2003 - 2007), helping the search giant build out its data center infrastructure. 

In the podcast Sacca talks about life at Google and what makes Google so different as a company and a place to work. The most interesting part of the discussion starts at about the 13:30 mark, where Sacce talks about the hiring philosophy at Google, and why that was imporant. Have a listen, then some quick comments from me.

In case you didn't catch the key comment, I will repeat it here.

Sacca: 'One of the things they (Google) did that is kind of like an NBA team, is that they hired just for sheer capability, not necessarily for culture fit. And so they were just like 'If we get the smartest, most driven, ambitious people in the world all to work here and we will see what happens. 

And so other teams were like 'Well, I don't know if this guy is going to work well with this other guy, you know a lot of raw talent but, if you look at Eric Schmidt and Larry and Sergey the owners and general managers, they said 'Let's just get the smartest people in the world here and then see what happens.'

In the podcast Sacca goes on a little more about what the focus on talent and raw capability above this idea of 'fit' meant for Google, but I think you can get the idea from the excerpt above.

Looking back through all the posts I have done on this topic over the years, I would say at least philosophically that I come down way towards the Google/Sacca point of view on this. I think raw talent, the ability to assemble enough of it at one time and in one place will have the most significant impact on organizational success, certainly when a company is smaller and growing.

Focusing solely on talent and ability may result in hiring a few bad apples, and Sacca admits as much in the podcast, but in the end whether its the NBA or a tech company, the team with the best talent almost always wins.

Have a great week, and make sure you check out the HR Happy Hour Show too!

PODCAST - #HRHappyHour 244 - Global HR Technology Trends from HR Tech China

HR Happy Hour 244 - Global HR Technology Trends from HR Tech China

Hosts: Steve Boese, Trish McFarlane

Guest: Madeline Laurano

Listen HERE

This week on the HR Happy Hour show, join hosts Steve Boese and Trish McFarlane as they talk with Madeline Laurano, co-founder of Aptitude Research Partners.   Fresh from the HR Technology Conference in Zhuhai, China, the three talk about the trends in HR technology and how they are similar around the globe.  

Specifically, the conversation covers having Talent Acquisition as a priority and the Chinese focus on services.  With that focus, there is great interest in acquiring and using the best and most relevant HR technologies.  We also talked about the way that China officials brand their city and the benefits US organizations could gain by having that focus.  

We also talk about the way that China uses social media in their organizations.  The perception is that they ban most of the sites we use in the US.  And while that may be true, they have alternatives that may be just as effective.  In fact, the US contingent all embraced WeChat and loved it.

You can listen to the show on the show page HERE, or by using the widger player below:

This was a really fun and lively show, and we hope you give it a listen.

And many thanks to everyone at LRP Publications and China Star for putting on the HR Technology China conference and for inviting us to participate as speakers.

Reminder: You can listen and subscribe to the HR Happy Hour Show on iTunes, and all the major podcast player apps for iOS and Android - just search for 'HR Happy Hour' to subscribe and never miss a new episode.

Who makes better hiring decisions, man or machine?

Despite two-plus decades of innovation, billions of dollars spent by organizations on HR/Recruiting technologies, and (adding in this one), 139,927,434 blog posts on the topic, hiring still remains stubbornly difficult, is often lengthy and costly, and all too often results in disaster.

There are potentially dozens of individual reasons why this sad state of affairs persists in 2016, but I want to talk about just one in this post - the question of whether or not hiring could be improved if we relied upon people (mainly hiring managers) less, and machines, (automated job fit assessments and similar instruments) more. The source of the rest of the data in this post is from a 2015 NBER Working Paper titled Discretion in Hiring by Mitchell Hoffman, Lisa B. Kahn, and Danielle Li.

In the paper's abstract, the authors set out to answer a simple question:

"Who should make hiring decisions? We propose an empirical test for assessing whether firms should rely on hard metrics such as job test scores or grant managers discretion in making hiring decisions."

A pretty good question for sure.

Who (or as we shall see soon what), should have the final, or at least the most influential voice in determining which candidate to hire for a given role?

According to the authors, hiring is hard and prone to error for two primary reasons. One, resumes, profiles, even interviews are usually not perfectly complete and able to reveal with a high degree of confidence and accuracy who is the best candidate for the job. And two, the people the firm entrusts to make hiring decisions are simply not that good at making these decisions.

They start with imperfect information, then apply (sometimes subconsciously), there own views, preferences, and biases that may not be congruent to the organization's goals to the decision process.

Bad information + inaccurate, possibly biased decision makers = way too many bad hires.

So what might a remedy be to combat the 'bad information' and 'bad decision makers' challenge?

How about improving the information, (not very controversial, surely), and removing the decision makers (possibly more controversial, as most hiring managers will claim they like to, you know, hire).

More from the NBER paper on what they did and what they were able to find:

In this paper we evaluate the introduction of a job test, and develop a diagnostic to inform how firms should incorporate it into their hiring decisions. Using a unique personnel dataset on HR manager, job applicants, and hired workers across 15 firms that adopt job testing, we present two key findings. First, job testing substantially improves the match quality of hired workers: those hired with job testing have about 15% longer tenures than those hired without testing. Second, managers who overrule test recommendations more often hire workers with lower match quality, as measured by job tenure. 

This second result suggests that managers exercise discretion because they are biased or have poor judgement, not because they are better informed. This implies that firms in our setting can further improve match quality by limiting managerial discretion and placing more weight on the test.

Less manager input/discretion in hiring led to better hiring outcomes. Across the board in this study.

A few caveats worth mentioning, (and you should, if you are so inclined, read the entire paper here).

This study was performed across a dataset of 15 firms hiring for high volume, lower skill kind of roles - think something like data entry, call center, that kind of thing. The kinds of jobs where it is relatively easier to come up with an accurate job test/assessment, and ones where the primary measure of hiring success is often retention.

Also worth noting is that the researchers controlled for other measures of employee success like productivity, i.e., they were able to determine that when hiring managers overruled the job test scores in making hiring decisions that they were not in fact sacrificing longer tenure for increased near-term efficiency.

Essentially, for this category of low to mid-skilled service roles, the researchers were able to show that all things being equal, additional managerial input and discretion into the hiring decision process only served to lead to worse hiring outcomes.

I will close with one more line from the study's conclusion section:

In our setting it provides the stark recommendation that firms would do better to remove discretion of the average manager and instead hire based solely on the test.

But that conclusion only holds true for the 'average' manager, right?

I'm sure your managers are way above average when it comes to making hiring decisions.

Right?

Discretion in Hiring, Mitchell Hoffman, Lisa B. Kahn, Danielle Li, NBER Working Paper 21709, November 2015

CHART OF THE DAY: Trends in Labor Force Participation

It's been ages since I broke off a CHART OF THE DAY post and even longer since I talked about the Labor Force Participation Rate, so let's remedy both of these situations in one shot.

Courtesy of your pals at the Federal Reserve Bank of Atlanta, have a look at a recently published chart on participation, this one broken down by gender. As always, some insightful comments from me after the data:

Let's break down the data a little, and see if we might (Shock!) learn something. Some observations...

1.  Male labor force participation has been on a long and steady decline for ages. In fact, males, as a group, have been less and less inclined to participate in the labor market since at least World War II.

2. The female participation rate increased from about 43 percent in 1970 to a peak of 60 percent in the late 1990s, from which it has remained relatively flat over the last 15 - 20 years.

3. But despite the economic recession of 2007 - 2008 ending, the data show that between 2010 and 2013, participation declined even more steeply for both men and women. Average female participation in 2014 was 57 percent—the lowest level since 1988—and male participation was down to a record low of 69 percent.

What should we think about when considering this data? After all, participation is influenced by numerous factors like workforce age, prospects, disability rates, desire to continue schooling, etc.

Let's look at what the Atlanta Fed thinks is the near-term direction for Labor Force Participation:

"As a guide, the Bureau of Labor Statistics projects that the factors pulling down the labor force participation rate will outweigh those pushing it up, and that by 2022, labor force participation will be 61.6 percent, 1.4 points below its level at the end of 2014."

The trends and the predicted continuation of these trends suggest a labor market that is even tighter than we are experiencing currently. It seems also likely that the kinds of jobs that will be hardest to fill are not the ones that will be easily filled by simply coaxing more people back into the labor force. 

If anything, a declining participation rate makes even seemingly 'easy' to fill jobs that much harder to fill.

Long story short, this data suggests that filling all kinds of jobs is just going to get tougher. It's probably a good time to be a recruiter though.

A good recruiter I mean.

More from the 'Email is ruining our lives' department

I have not written about email and how horrible it is for some time, so I was kind of glad that I was reminded of that horribleness (probably not a word, but let's keep going), while reviewing a recent survey about after-work hours email habits published by the enterprise service management company Samanage.

It's a short, but informative report, and I recommend taking a few minutes to read the entire thing, but if you can't spare the 20 minutes or so (probably because you have to get back to your email), I will just call out the two most interesting survey findings and then because you expect no less, offer some FREE commentary about what these data points should make us think about as HR/business leaders.Ed Ruscha 'Actual Size', 1962

Finding 1:

More than 1 in 3 survey respondents (35.2%), said they spend more than 1 hour per day checking emails outside of work.

Implication: The demands and expectations on many of us are so high that we simply can never get 'caught up', at least to the point where we can enjoy a night, or heaven forbid an entire weekend, without work, (in the form of endless emails), continuing to roll in. 

When asked why we spend so much time after hours on email, almost all the responses are some version of the notion (and expectation), that if we don't spend at least part of your off-hours dealing with email, you won't be doing your job. That's pretty sad, and pretty frightening at the same time.

Finding 2:

20% of survey respondents reported that checking after-hours email produces negative feelings about work, including feeling overwhelmed and frustrated.

Implication: Of all the findings in the survey, this is the one that I think bears the most consideration by HR and business leaders. The long-term, heck even medium-term effects of this email overload into all hours of the day and night are taking a toll on the workforce, at least 20% of them anyway. And that is not an insignificant figure. How would you feel if you knew that 20% of your team was 'overwhelmed and frustrated?' 

And it is not just the employee's feelings and welfare you should think about. What about their friends and family members who all too often find themselves taking a back seat to your employee having to answer her email during dinner or at the ball game or when they are meant to be doing something, anything that is 'not work?'  

Ugh. But I know that email is never going away, not in our working lifetimes anyway. I have finally resigned myself to that reality.

However it can be less terrible. And we can do better to make sure it is not ruining our free time, filling us with anxiety, and tethering us to our work and workplaces no matter where we may be and what we are doing.

I don't think I am going to write about email anymore, at least for some time. I am kind of tired of thinking about it. But after all these years and the many, many hours I have spent writing about the tool I guess the simplest conclusion or recommendation I have reached to try and make things better is this:

Before writing another email, especially one after hours or on the weekend stop writing and think for 30 seconds or "Do I really, really need to send this message, with this information, to these people, right now?"

Followed closely by a this follow-up:

"How do I want people to feel about me, their job, the team, and the organization when they see this email?"

Think about both of these questions before you hit 'send' at 11:30PM on Friday night.

Actually, think about them at 10:20AM on Tuesday as well.

Have a great week!