Cost of Flawed Interviews
What is the real cost of a recruitment mistake? The Chartered Institute of Personnel and Development (CIPD) estimates the average cost of filling a vacancy to be £8,200 when associated labour turnover costs are also taken into account.
A significant sum in its own right but more worryingly, the cost of failure, or the cost of selecting an incompetent candidate, is very high. Not only does it include the cost of time and money for the hiring process, it also includes the costs associated with the loss of productivity. It is estimated that hiring the wrong person – and then having to replace them – can cost an organisation up to three times the individual’s annual salary.
When there is a skills shortage, as there currently is in the accountancy profession, employers can feel under pressure to hire any candidate who presents the right skills, running the risk of taking on someone who subsequently turns out not to exhibit the values and behaviours that are actually required. This situation will be uncomfortable for both employer and employee. Unless matters are resolved, there is a likelihood that the employment may be terminated leading to the cost of re-recruitment. Organisations have been known to repeat this mistake several times, hiring appropriately qualified and experienced people who do not actually suit the post, the team or the organisation.
In 2001, Larry Bossidy, the CEO of Allied Signal described the recruitment interview as “the most flawed process in…business”. Candidates are offered extensive coaching in interview technique whether they are graduates looking for their first training place, or qualified professionals making senior career moves. They are helped to hone their interview technique, shown ways to answer difficult questions, and practise presenting their weaknesses in a flattering light. Line Managers carrying out interviews need to be given the same sort of help and support. There is a science to designing effective questions, and a skill in listening to the candidate’s responses to recognise and sift through the evidence being presented.
Most companies expect their line managers to undertake the task of interviewing candidates despite the fact that these individuals’ skills lie in other areas, and that they may only have to carry out recruitment interviewing occasionally. This is one of the potential weak points in the recruitment process. Line managers tend to focus on candidates that have the qualifications, professional knowledge, technical skills and experience for the post to be filled, or in other words, they tend to conduct interviews that primarily explore the question “Can you DO the job?”
This is unsurprising, since questions to explore technical and professional competence are relatively easy to frame, and evidence of technical and professional competence is relatively easy to recognise. However, what is more difficult to interview for, and harder to spot evidence of, are the underlying behaviours and soft skills that each candidate demonstrates. Often this means that the interviewer does not take due regard of the candidate’s suitability to fit into the culture, values and behavioural norms of the team or company that they are joining – in other words, they frequently fail to ask the question “Are you the right person for the job?”
Competency-based interviewing, also known as behavioural interviewing, gives interviewers a method of exploring the behavioural traits of their candidates, answering this all-important second question. It is a technique that is fair to all candidates and probes candidates’ experience for evidence of past behaviours in order to effectively predict likely future behaviour.
Imagine two accountants who, on paper, look to have exactly the same qualifications, and comparable commercial experience. In traditional interviews, the focus would be on probing their experience, testing out their ability to resolve job-related problems, and exploring their ideas for the future. These angles all help to build up the essential bed-rock of recruitment decision-making – “Can you DO the job?”
However, let’s say our two accountants prove to be equally competent, but the employer has a need for someone who will make a particular contribution to the team, or has a certain attitude towards risk and creativity. Without a method to test these behaviours, many organisations rely on gut instinct to make their choice between the two candidates. Competency-based interviewing will give the interviewer the method to interview for these kinds of attributes, and many others ranging from leadership or inspiration, to problem-solving and adaptability.
Companies can significantly improve their ROI in the recruitment process by educating their line managers in competency based interviewing techniques. This would significantly improve the ability of line managers to make a better choice of recruit, reduce the risk of wrong selection via flawed interviewing techniques, and save the business major costs by reducing staff churn.