Have you been guilty of hiring the 'Stud to Dud' candidate? You know, the one who shined in the interviews, but didn't deliver as expected once hired? You aren't alone! We hear this often from business owners who contact us for hiring assistance.
Although there is no foolproof way to completely eliminate this from happening, here are some common pitfalls and behavioral biases than can unwittingly impact the process, and how to avoid them:
- Consistency Bias - All interviews should be uniform (within reason).
Avoid: Adjusting the interview process too much from one candidate to the other. While it might not be possible to have the same interviewers conduct the interview in the same setting during the same point during the work day, strive to keep these variables as consistent as possible to ensure a consistent point of comparison.
Do: Consider taking a structured interview approach (where you ask the exact same questions of every candidate), but realize you might have to go off script occasionally. For example, a candidate once told me they worked in a university call center trying to secure alumni donations, so I immediately put them on the spot with a role playing exercise where I had them pitch to me on why I should donate. Not all candidates had this particular position and if I had not explored further, I would have failed to gain some valuable insight about that candidate’s skills and whether the candidate was a fit.
- Familiarity Bias- Be sure to remove your personal feelings when interviewing and dealing with candidates much like you do (or should be doing!) when making investment decisions. Recognize that if you’re more familiar with one candidate over another, you may have a natural bias towards them because of the comfort of familiarity.
Avoid: Going easier on a familiar candidate by not asking them tough questions because you “think” you already know them well, or they have a similar background, or you feel that you "mesh" with them from the start. This is a very easy trap to fall into due to our empathetic nature as financial planners. Many interviewers are not aware they have these biases, but they can cloud judgment and adversely affect hiring decisions. A similar problem is allowing fluffy answers to your questions slide by unaddressed because you think it could be a good fit, and you do not want to bring up something that might be an issue. Just like in any relationship, potential issues that are just ignored early on often become an even bigger issue later!
Do: Strive to ensure all candidates endure the same amount of scrutiny while interviewing (again, a more structured interview process helps). Deal in facts as frequently as possible; e.g. candidate showed up/called in on time, answered questions thoroughly, researched firm, asked probing questions about role, followed up, etc. Also, have someone else conduct the interviews if you know you are prone to these biases, and/or if you know you may be uncomfortable witnessing candidates struggle in the hot seat.
- Anchoring - A candidate's past performance is not the whole story, especially if they are a new planner and do not have a lengthy past to review, as is the case most of the time. But be cautious about anchoring to a limited set of appealing information that leads you to miss out on asking probing questions.
Avoid: Placing too much emphasis on resume, interviews, and references alone; e.g. hiring the Summa Cum Laude business student from the prestigious institution who was polished, then find out they have no idea what a dividend is nor how it works.
Do: Incorporate job skills assessments so you have an idea if the candidate can meet your expectations. If they cannot, determine what level of mentoring or training you will have to provide. Resumes are like online dating profiles - everyone is a perfect ten in their own eyes - and as a result they are becoming obsolete. Unfortunately, references are often bound by legal concerns from speaking freely, while interviews are much like a first date where neither side dare to reveal that they are really difficult to work for/with. The logical step is to have candidates complete job-specific exercises in the role you are looking to hire. If you understand why this makes sense, but you neither have the time nor inclination to create job-specific exercises, you can always utilize our Candidate Screening Solution https://newplannerrec.wpengine.com/candidate-screening/
As a reminder, just because someone seems to communicate well, has great grades, and appealing credentials, does not mean they will be a top performer at your firm. Reduce your risk in hiring by placing less emphasis on interviews, resumes, and references and more on how they actually perform on the job task assessments, specific to your firm that you set up for them. Also, remember to start the hiring process when you reach ~70-80% of capacity. If your firm is growing, you do not want to feel the added pressure to bring someone on when you’re in a desperate situation, which can increase your risk of a 'Stud to Dud' hire.
When you or your colleagues are ready to hire, consider using New Planner Recruiting to increase your odds of success, or view more of our free resources online at www.newplannerrecruiting.com
- Michael and his wife, Ellie, had their second daughter Rose Eunhae Kitces on December 27th!
- Caleb is speaking at FSI OneVoice in Washington, DC January 28th http://www.financialservices.org/onevoice/
- Caleb will be attending the TD Ameritrade Conference in Orlando January 28th - February 1st