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March 16, 2020
One thing that contractors are not particularly distinguished at is recruiting, hiring, training, and retaining outstanding talent. Because this situation is so critical in our industry now, it's time to address some of the pervasive flaws in construction hiring.
What are some of the root causes that cause contractors to have weak, atrophied muscles when it comes to recruiting and hiring, and, more importantly, what might they do about it?
Poor Hiring Can Hurt your Business
First, what's the downside of a poor hire? It's hard to put a figure on an opportunity cost like this, but talent management firm TEKsystems claims that replacing a terminated employee costs an employer between two and seven times the employee’s annual salary! The firm also says that hiring and training a new person cost between 25% and 200% of that individual's annual compensation. There are all kinds of similar statistics floating around out there, but the bottom line is this: Getting the wrong people on or off your bus is expensive!
What are some of the reasons that contractors remain poor at hiring?
Avoid the Unstructured Interview
Contractors dramatically over rely on the most flawed evaluation tool known to mankind—the unstructured personal interview! The book Sway: The Irresistible Pull of Irrational Behavior by Ori and Rom Brafman details some of the hidden psychological forces that lead usually rational contractors to disregard facts and logic and behave in surprisingly irrational ways.
The Brafmans liken the unstructured interview format to falling in love with a college sweetheart. Their research discovered that objective third-parties (e.g. college roommates and parents) were far better than the sweethearts themselves at predicting a budding relationship’s longevity. The reason for that is the parents and roommates were, write the authors, “observing the relationships from the outside without new love’s rose-colored glasses. Indeed, across-the-board, students were more optimistic about their relationship prospects than were their roommates. Least optimistic of all were the parents.”
“The unstructured personal interview is alarmingly like dating: There is only a small correlation between the first date (unstructured job interviews) and job performance. The marks managers give job candidates have very little to do with how well the candidates will actually perform on the job.
That's easy to understand: Anyone who has reasonable intelligence can do a fairly good job of making a business case for their hire during a 30- to 90-minute job interview. Most interview time is devoted to unproductive and uninformative talking and conversation, and we don't mean talking by the candidate.
In so many interview sessions, contractors act as if they need to sell the candidate on their companies versus the other way around. The Brafmans compiled a list of the top 10 most commonly asked interview questions, and they are usually open-ended ones like "What do you consider to be your greatest strengths and weaknesses?" or "How would you describe yourself?" These questions simply don't compel applicants to reveal very much about themselves in an honest or useful way.
An interviewee is never going to say, “I have a drug problem and I stole from my last employer.” No applicant with reasonable intelligence is going to throw him or herself under the bus!
How to Make Better Hiring Choices
It costs too much time, money, and emotional turmoil to allow your next hire to be a flop. Make getting the best people your focus, apply these three techniques, and save yourself a lot of trouble while simultaneously improving the quality of the people with whom you work.
Wayne Rivers is the president of The Family Business Institute