Last month, I showed you how to calculate the return on your investment in human capital—the knowledge, skills and experience of your people. This month, we look beyond the numbers at the factors in your hiring process that either maximize or reduce your return on investment.


Selecting the right people


After decades of experience in the job market as both a candidate and business owner searching for the best candidates, I have concluded that many components of the hiring process are ineffective and inefficient. Make sure you are not wasting your time and money on irrelevant methods and tools.


Resumes and cover letters


As an employer, know that resume formats are outdated. Many candidates are advised to truncate or omit short-term or very old positions that show useful skills or experience. Dates are seldom relevant but can be used to reject applicants based on age. Career search websites teach candidates how to use keywords in resumes and cover letters to trigger algorithms in screening software, and posted job descriptions contain overbearing job requirements and little or no salary information.


If your company uses an online application, design it to be flexible. Make sure there is enough room for all degrees or certifications and enough space for notes. Be careful about making assumptions based on the number or variety of jobs the candidate has held. A generalist who learns fast may be more valuable than a person with one narrow skill set. Someone with extensive history might be willing to work for less money if the total compensation package is acceptable. An applicant might really want to work for your company without knowing which position would be the best fit.


Referrals vs. references


An employee who refers a candidate is risking his or her own credibility, and the applicant is pressured to retain the goodwill of his or her benefactor. References, however, are almost meaningless, unless they are credible and tailored to the situation. The applicant is unlikely to provide a reference who would say anything derogatory, and the reference may not have direct knowledge of a skill set applicable to the job. If you don’t know the reference, why should you believe what he or she says? Pay attention to employee referrals, and don’t ask for references without a specific reason. Checking social media accounts, such as LinkedIn and Facebook, is more useful for gaining character insight.


Background checks


Don’t pay for unnecessary investigations. A credit check might be useful for someone who will have financial control but not for a driver. A motor vehicle record is appropriate for the driver but may have no relevance for an employee who has no access to a company vehicle. Fingerprinting teachers is commonplace, but a criminal background check is more likely to be valuable to your company. Know why you are using these services, and provide the results to applicants to allow them to correct any errors that might affect their chances of being hired.


Assessments


Screening tools, such as personality and skills assessments, are useful if they are specifically targeted to job requirements. You should have a clear objective for using each type, or it is a waste of your money and the candidate’s effort. At various times, I have taken every kind of screening test imaginable, and it was seldom clear what relevance they had to the company culture or my potential to succeed as an employee. Assessments can provide a basis for further exploration in an interview or point out gaps in skills such as math or writing, and again, you should provide the candidate with the results. Keep in mind that test anxiety can often affect subject performance.


Interviewing


Most interviews are too short to provide more than a first impression of a candidate and are often held with a human resources manager instead of someone who would have direct contact with the new employee. Tailor your interview process to the position. Know why each question is being asked, and allow enough time for deeper conversation. The candidate should talk, and the interviewer should listen. Ask what the applicant’s preferred work environment feels like, what he or she most values from an employer, and what he or she has done that was most rewarding. Avoid trick questions or “sudden-death” scenarios that require the candidate to solve a problem during the interview, unless you are hiring for a position where this kind of emergency-response thinking is required.


If possible, structure a mini “job shadow” and allow the candidate to talk with someone doing a similar job or to explain how his or her background and skills would match the job requirements. If possible, have the person provide work samples. The best craftspeople we interviewed carried a small portfolio of photos of their best projects. Writing samples, teacher portfolios, presentation slides, and audio or video clips can all provide evidence of professional accomplishments.


Next month, we’ll explore your investment in training and development.