Tuesday, September 21, 2010

Other People’s Money: The Truth About The Cost Of Hiring

“What constitutes a successful hire?” is a question that interests both recruiters and managers while the question “How much does it cost?” is the one that plagues managers and their managers. I was a “special guest” at a seminar run by my former colleague Ms. Nirit Hadar who was addressing the overall hiring process and this specific aspect therein. I’m sure at least three answers spring to mind as you’re reading- hiring someone who suits the role, hiring someone who fits the company and hiring someone who stays with the company “long-term.” Some of the more sophisticated answers offered by the seminar participants were cost of hire and time to hire, both of which need to be low in order to constitute a successful hire.

The latter suppositions are indeed accurate, and should be key performance indicators on which we evaluate our recruiters, however, these answers- and those preceding them- typify individuals who are too far removed from an overview of the business entity to understand that all the above are actually subsets of the one correct answer: ROI.

Return On Investment was The buzzword in the last decade, used to excess and then discarded. However, its exactitude in answering this question is absolute. I shared with the seminar participants that, as an owner of a profit and loss, business unit and bottom line results, what determines if a hire has been successful is whether I am able to say no to the following question: Did I invest more into acquiring this resource than the output it delivered for me?

“Investment,” in this case, spans three main areas. The first is money- how much money did I spend on the hire? This is a quick and dirty, easy calculation of agency fees, job board fees, referral rewards and the like. The second is time which is actually, as the adage states, money but separated here because of the challenge in precisely quantifying it. Within “time,” various factors should be examined including: How much time did I spend on this hire? How much of other people’s time (read: money) was spent on this hire? How much time did it take to fill this position? If I’ve been looking for 6 months, that might mean the work included in the job description wasn’t get done or wasn’t getting done properly which is detrimental to the overall productivity (read: profitability) of the firm.

The aforementioned two elements- time and money- can be estimated and calculated prior to the hire but the third encompasses post-hire costs which are also integral to understanding the truth about the costs of hiring. This third component centers around the new hire’s contribution and productivity. Did s/he improve or detract from the work environment (read: productivity) and how quickly (read: time, read: money) did it take? Did s/he encourage others to work harder, better, smarter or incite dissent and discontent? Was s/he able to do the work with minimal coaching, supervision, guidance or did the firm need to invest time (read: money, again) in hand-holding and a long learning curve? Did we discover, after bringing him/her in, that we did not need this function? Did we invest more time/money only to lose this individual before their output outweighed our input?

And the ROI doesn’t end when an employee’s lifecycle does. Employees contribute to a company even after they leave. If the parting is amicable, the firm’s reputation will be enhanced; if it was acrimonious, then it’s likely to have been detrimental to the work environment and company reputation. Severance pay is also a factor and it’s the one which rankles me.

As someone who has been part of management for almost my entire career, I can empathize with the “other side” in a limited way, for the following reasons. Most employees who are leaving the firm are focused only on themselves- seeking to extort as much financial gain as possible, be it earned or not- and totally disregard the welfare of the individuals they are leaving behind as well as the health of the company which continues to provide for those individuals.

Furthermore, even in today’s difficult economic times, leavers often have another job before giving notice so they have an assured future income and are merrily on their way; given their situation, focus on draining every penny from their soon-to-be-former employer seems excessive and unnecessary. Their self-centered perspective means they take away money which is not rightfully theirs and that could/would have been invested into the remaining employees and the company, to make everyone more successful and happy. Exiting employees need to understand that they cannot be an “exception” because once an exception is made, a precedent is set and the company will struggle to justify not repeating their actions. Thankfully, my faith is restored by those employees who have earned their severance package/exit terms in full and by those who go about getting fair settlements without defamation or scapegoating.

So now that we have the three elements to ascertain ROI on a hire, who should be answerable for it?

Well, recruiters- on all levels- need and are able to manage the monetary and time factors correctly, meaning achieving whatever is optimal for the particular role and firm with the weight of each component varying per position and company. An additional factor for which recruiters should be held responsible is the new hire integration period which is part of the third element. The benchmark for a new hire integration period to which I’ve been held and to which I now subscribe is six months for senior-level individuals and three months for others. If the new hire leaves (voluntarily or not) within these time frames, then the recruiter has failed and worse, there is almost no possibility of having achieved ROI.

Exceptions do occur. In some countries, France, for example, the penalties of terminating an employee after their probation make cutting one’s losses early an appealing and cost-prudent option. Another exception can occur when an individual introduces the firm to valuable contacts with which the company is able to nurture relationships thereafter. However, because of the intricacies and expenses associated with hiring, only an individual with a company-wide spectrum can be held accountable for the third element in its entirety and therefore, for ensuring ROI is attained.

So “What constitutes a successful hire?” and “How much does it cost?” are actually the same question. And the answer is that a successful hire is one where the newcomer’s output exceeded the firm’s input. As is now evident, the spicy ingredients of the ROI dish make hiring one of the most costly and complex processes a firm undertakes. Managers and recruiters alike will benefit from more accurately measuring and weighing the above recipes and then, as they say, the proof is in the pudding.

Monday, August 9, 2010

Erring On The Side of Caution

I’ve often regretted being human, what with all the mistakes I’ve made and my propensity for excessive self-berating. Some have been big, some small, it all depends on the eye of the beholder (lucky for me, my boss thinks they’ve all been little). We are “reassured” by peers that we learn from our mistakes, become stronger, better, smarter…or at least we should. After all, as Alexander Pope wrote, “to err is human” so there’s no avoiding it.

Or is there?

According to the majority of available literature, interviewees are strictly prohibited from acknowledging a mistake or weakness. Ford Myers’ Get the Job You Want Even When No One’s Hiring repeatedly decrees, “Never state anything negative.” Ros Jay’s Brilliant Interview echoes this sentiment and advises replying with one (or more) of the standard four “defenses:” humor; something personal; something from a while back from which you can demonstrate a lesson-learned; something the interviewer will perceive as a strength.

Despite several good points, Ellen Reeves’ Can I Wear My Nose Ring to the Interview? also falls prey to this popular opinion and she takes it a step further saying, “Interviewers aren’t really expecting you to [reveal a real weakness]. If you do, don’t be surprised if an offer isn’t forthcoming. But you need to answer.” Indeed, denial or “sanitizing it” as Casey Hawley puts it in his Job Winning Answers to the Hardest Interview Questions (of which the illustrations are the best part) is common.

I would like to protest on behalf of hiring managers and recruiters everywhere but perhaps I am the exception in seeking a candid answer to this question.

I am consoled by the handful of writers whose approach differs from the aforementioned. Pierre Mornell’s Hiring Smart, an excellent resource for interviewers and interviewees alike, recommends interviewers derive their own conclusions about an applicant’s frailties based on their self-proclaimed strengths and other shared details. Prevailing interviewee behavior aside, Mornell’s approach is smart as is Jeffrey Fox’s book Don’t Send a Resume, an inspiring, creative and thought-provoking compilation of insights that stand the test of time (he published in 2001 prior to the onslaught of the internet). Like Mornell, Fox acknowledges that interviewers have concerns but he reminds us that the interviewee does not know what those are! A smart interviewee will look for clues to understand where the interviewer has concerns and, Fox says quite simply, “if you know how the company will benefit from hiring you, then with planning and creativity, any hiring concern can be handled.”

When I’m interviewing an applicant, I heed Fox and Mornell as well as doing my utmost to obtain a ‘confession.’ I do this because I need to know if I can compensate for and/or manage your shortcomings when I hire you. Because by definition everyone has deficiencies, it helps to remember that, like beauty, their severity is in the eye of the beholder. Maybe you’re a night person and that will work well for me since the other team member is a morning person and the combination gives me longer coverage. Maybe you’re a bit too blunt which will serve me well since the other team member is a bit too reserved and I want more feedback. Furthermore, disclosing an imperfection indicates to me that you have some modicum of self-awareness.

One of my cardinal rules is to not hire anyone who does not admit to making a mistake. To be clear, by ‘admitting’ I mean I need to hear the words ‘I was wrong’ or ‘It was my mistake.’ Saying ‘I should have’ or ‘I could have’ fails to demonstrate an acceptance of one’s wrongdoing. As a hiring manager, I need to know that you take responsibility for your mistakes and do not blame your boss, subordinates, colleagues, neighbor’s pet. Since rectification is preceded by acknowledgement, your admission assures me that I will be able to trust you when you’re on my team. Additionally, if you have no mishaps with notable consequences, I will surmise that it is likely you have not held significant responsibility in your previous roles.

Truly, it’s to the benefit of all parties to know the truth. When one enters a job for which s/he is ill-suited, it is an ill-fated relationship that will cause frustration and unpleasantness on both sides before the short-lived affair comes to a bad ending.

Even bearing all this in mind, in my experience, chemistry, cultural fit and personal compatibility are the ultimate deciding factors. Employers will often take individuals who are less than 100% qualified vis-a-vis the specifications when there is a ‘click.’ Forgive the analogy but it seems to be like dating. You might have a checklist but if there’s chemistry, the so-called requirements are often cast aside (hence, perhaps, the current divorce rate?).

There is no such thing as the perfect person- each of us brings flaws, faults and foibles to our work place. I’d like to forcefully protest erring on the side of caution when disclosing our frailties but I’m not convinced our ‘reality’ obsessed marketplace is ready for real reality. So instead I invite you to take the concept with you for when we get there and…someone at home will undoubtedly thank me.

Monday, August 2, 2010

International Intrigue

Embarking on international business pursuits? Already enthralled or embroiled therein? Insights from ten years of working in Paris, Tel Aviv, London and New York will ease, enlighten and amuse you on your way to better business behaviors.



Ah, the glamour of jet-setting across the globe! It’s probably more fun from afar although after almost a year without the stress, discomfort and inconvenience of international travel I am missing it.

If you’re embarking on international business pursuits or already enthralled or embroiled therein, perhaps a few insights garnered from ten years of international business-related travel and activity will be of use to you. Paris, Tel Aviv, London and New York have been my frequent pleasures and I believe understanding the different cultures is easiest when viewed through one concept: personal space.

Well, since the Israelis and French may be asking themselves at this point, “what is that?” let’s make it two concepts; the second being driving. While I exaggerate somewhat with the former to make a point, allow me to substantiate.

To the Americans and British, personal space is a practice held near (pun intended) and dear to our hearts. It is the space afforded between bodies when walking down the street, traveling on the subway/underground/metro and during face-to-face conversation. Even in bars, the Americans and British maintain that sliver of space which constitutes a comfort zone. In Israel, the opposite extreme dominates. Generally, the physical space between persons is absolutely minimal, if at all. Walking on the street means bumping into people, public transportation means being in physical contact with your neighbor- the expression “getting close and personal” takes on real significance here.

France is similar; the French are passionate people and like proximity although they tend to crowd less than Israelis. No doubt in Israel it stems from the close confines of the country whereas the US is quite expansive in size and subsequently mentality. That being said, how amazing is it that the city of Manhattan there are the same number of people as there are in the entire country of Israel and yet no one bumps into you at Grand Central Station during rush hour? I even had someone once apologize to me for walking too close to me- and he hadn’t even brushed up against me. And people say New Yorkers are rude?!

If the personal space analogy doesn’t speak to you, let’s talk driving. Americans tend to be polite in their driving, especially when driving anywhere but New York City. (Remember, most of the cabbies are foreigners). By polite I mean, signaling, maintaining a decent distance from the cars in front and to the side of them, usually not moving faster than a speeding bullet. The British too drive in a guarded and cautious manner, even more so than the Americans, although it could be that the “other side of the street” driving is disorienting me.

If you’re visiting France or Israel, make sure your seat belt is fastened! One might think reaching the destination is a matter of life or death. I called a dear business colleague who was, at the time, a passenger in a car driven by an Israeli. “Where are you?” I asked. “On the way to the hospital,” he replied. (He was, actually, on his way to a business meeting but the driving had him terrified.)

These concepts and associated behavioral patterns echo the different patterns of life and confrontation which exist in these regions. The French live as they drive- they savor and enjoy their experiences. Lunch is a two-hour delight starting no earlier than 1:00 pm; dinner after 8:00 pm and long into the night, with wine and crème brulee for dessert. As they drive, the French dive into business topics, attempting to understand the reasoning and motivation behind the proposed course of action. Israelis also dive into business topics but from another angle. They are doers and problem solvers, usually spontaneous and almost unthinking in their responses. With highly tuned instincts and an inbred survival mentality, Israelis are ready to jump without a parachute. The French like their parachutes and want to know how many might be needed. So expect discussions and meetings in France to last long enough to address and resolve these questions while in Israel you’re likely to find people going off “half-cocked.”

In America and in England, there is more of a “yes-man” mentality. Because politeness and civility are sacred, it is rare to for individuals to share their true thoughts and even more rare for a confrontation to occur. As a result, meetings usually lead to participants saying yes, even if they don’t mean it and have no intention of doing it. While this is a generality, it is something to bear in mind so as to encourage all participants to voice their true opinions.

Among the four, Israelis are- by far- the most comfortable with confrontation. Israelis generally speak their mind and almost no topic is off limits. You can expect someone to ask you how much you paid for your house or car and how much you get paid as early as the first time you meet. In business, there are advantages to this straightforwardness. I always know where I stand and what the speaker is truly thinking. It is common to hear other ideas and suggestions. The disadvantage is that this aggressive, almost threatening proximity is so unfamiliar and therefore uncomfortable to American and British societies that it often backfires into a distancing between the parties and cessation of progress.

And it is progress we are all invariably seeking. We live and work in a global world. We need to be educated in international cultures in order to bring about productive interaction more rapidly. Perhaps the most important thing to bear in mind when you do business abroad- there is no right or wrong; there is only what we’re used to. Opening ourselves up to experience the business practices of others is enriching and rewarding, both personally and professionally. Enjoy the ride.

Separation Anxiety in the Corporate World

Comings and goings are a normal part of every company. Both involve varying levels of trepidation, anxiety, excitement and, almost always, consulting with persons we trust before deciding. Even in today’s market, there are people who choose to leave their jobs for another.

True story: Rebecca (not her real name) recently left her firm after four months of deliberation. Less than a year prior, she had been headhunted and joined this 50-person firm with a sign-on bonus binding her from voluntarily leaving for two years. After the initial few months, her workload slowed dramatically and what little work there was failed to meet her expectations in terms of career progression and challenge. She expressed her discontent to members of the management a few times. The months passed and Rebecca began arriving at 10:00 or 11:00, sitting idly at her desk, heading out by 4:00 or 5:00, taking long weekends and finally, interviewing elsewhere. But her plan was to wait for the yearly review before letting them know she had accepted an offer elsewhere, knowing the firm would award both raises and bonuses. As she sees it, the firm failed her and she worked, so why shouldn’t she get paid? Things got messy because the firm decided to take action only a few days before the bonus was due despite months of clear warning signs. I have to ask- How did the firm not recognize the pattern of behavior and take the right steps to handle the situation? (PS- The firm is, of course, in the financial services sector where such nonsensical common practices as sign-on bonuses and almost guaranteed promotions exist).

To be clear, I do not advocate Rebecca’s behavior (in fact, I am strongly opposed to her lack of work ethic) however she conveyed her feelings to her employer thereby inviting them to address the issue. One of the battles I, as a manager, waged was that my staff grant me similar opportunity to be part of their decision making process. We all consider new and different paths during our lives. And while today’s balance of power lies with the employer, it will shift back. So while this article may seem a bit anachronistic now, when the tide turns, firms that have cared will succeed in retaining their talent which will result in higher profitability in part because employee churn is one of the greatest unquantified and underestimated detractions from the bottom line.

A brilliant counselor advised me to remind myself every day while walking into the office or starting the day that my staff have a choice - they don’t have to work for me! I should make sure that while we’re all working hard- and be assured we did- we were feeling good about ourselves and our place of work. Part of making this happen is cultivating a work environment which is conducive to communication, one in which employees share their career aspirations. When an employee would share with me their deliberations, I committed first, to no repercussions and second, to responding truthfully. If we, the company, could help you achieve your goals, we would and when we couldn’t, we would let you know, so you could then find the best way forward for you.

Employees benefit because this conversation opens the door to possibilities, both those they have considered and ones that their managers may be contemplating. In this regard, employer-employee relations are similar to that of parent-child. Parents, like managers, tend to know what’s happening in other departments and have plans for the future, information to which the employee may not be privy and which may be influential in the decision making process.

As managers, we benefit from this practice because it facilitates smarter, more accurate planning. (In the case of Rebecca’s firm, they should have understood her leaving was inevitable, planned appropriately and saved themselves a decent amount of money to put towards employees who were vested in the company’s future). Furthermore, for decades now, research and studies in the western world have decreed that one of the top three factors in an employee staying with their firm is the relationship they have with their direct manager.

For me the equation is simple: happy people are productive people and happy, productive people make for happy clients.

It therefore follows that every firm benefits from supporting its employees in achieving their career goals (provided they are viable), just as every employee benefits from fulfilling their commitments to the best of their ability. In this regard, employee-employer relations are similar to that of husband-wife or whatever partnership exists. Each and every one of us contributes to our success as an individual and the success, or failure, of the unified entity.

Like a marriage, acknowledging that the possibility of separation exists is a constructive part of this relationship. It can be incorporated into the employee evaluation process to ensure it’s regularly but not excessively addressed. I’m an advocate for making it a part of our mentality. A workplace which fosters open and constructive interaction is one where separations, when they do, are better managed it is an amicable parting with pleasant memories.

Nevertheless, despite all good intentions, acrimonious exits occur. When they do, we need to remember that wherever we are, our behavior, both in and out of the workplace, builds our image, as individuals and as employees. In her book entitled Women Make the Best Salesmen, author Marion Luna Brem refers to Carl Sewell, a large luxury car dealer in the US, who includes the following in the code of ethics he has for his employees: “If you wouldn’t want your actions printed in your hometown newspaper, or shown on the local news, don’t do them.”

If you think about it, it’s understandable why this applies both during and after employment. If we speak poorly of our previous place(s) of employment, it reflects poorly upon us- as we were part of that organization for a recognized period of time. (The reverse is equally applicable). Shakespeare said, “All the world’s a stage.” In our world, where so much of it is virtual yet ironically indelible, this is especially true.

Recruiters, Headhunters and Employed Elitists- Shame On You!

Daringly disgraceful behavior characterizes our hiring world today. Join me for a brief trip down the rabbit hole to UnemploymentLand.


After 13 wonderful years with my employer, I recently resigned (gasp!). It was a difficult decision but one I felt necessary. I was looking forward to exploring unemployment, the lazy morning cups of coffee and eyeing the job boards. So, down the rabbit hole I went…

Linked In is a reputed good place to start and there I came across an interesting discussion called “Good Manners Matter, Don’t They?” The numerous tales of how people are quick to request work be done for them but slow to respond (if at all) are disturbing. Work hard on preparing a proposal or material for a prospect and apparently, unless the answer is yes, most opt to say no to saying no.

And we, of the Unemployed, are no more worthy of attention. We work hard when applying- researching the designated place of future joy, customizing our resume, following up with emails/calls/letters. Yet, publications abound with iterations that the Unemployed should or do feel ashamed of their situation.

Well I say - Shame On You, IABC magazine Communication World which compared and contrasted the aftermath of a natural disaster to the wake of a layoff. According to the article, the former elicits sympathy and support. As for the latter, “Those employees who have been let go may be ridden with guilt, embarrassment, shame and a lack of self-confidence. They are often politely shunned by former co-workers, neighbors, and even family and friends”

On Alice’s trip down the rabbit hole, her drink from the vial literally shrinks her to ten inches tall. My trip- our trips – down the rabbit hole to UnemploymentLand should not do the same. After all, who among us has never been fired, dumped, betrayed, used or abandoned?

While most of the aforementioned article addresses the physical and mental state of employees who have survived layoffs, at no point does the author point out how invalid and unacceptable it is (and it is!, in many cases) that this state of mind is the Unemployed’s onus. Be it self-inflicted or, in the reverse of the Shakespearean greatness, thrust upon us by publications like this one or one appearing in Fortune Magazine’s April edition. “How Do I Get a Headhunter Interested in Me” interviews a headhunter who is portrayed as saying, “Don’t Call Us: It doesn’t help.” Shame on You! The Bible says “Ask and ye shall receive.” Even disregarding it, how will we- the qualified, competent individuals with strong work ethics- get noticed if we don’t ask, call or write?

Shame On You, hiring managers for allowing this behavior to proliferate. Your in-house recruiters are a direct reflection on you. The people who answer your phone (and don’t return calls), whose names are connected to yours (and ignore personally addressed emails) and those from whom you request follow up be done (and it’s simply not) are how we perceive you. Maybe you practice “do unto others,” but if those around you do not, you are guilty by association. In my eight years as a hiring manager, I made sure that my team and I treated all applicants as does Nabisco (see below).

Yes yes I know- you’re swamped, overwhelmed; you get so many calls, applications, inquiries and emails. Poor you of the Employed! Because I have yet to meet a working person who cannot easily improve their daily productivity by 10% (let’s just start by you shutting Facebook or whatever social media/internet site is your weakness and yes, I mean keeping it closed for the entire workday), I cannot empathize with you. It’s always a question of priorities.

Some people do understand this and therefore practice it in their organizations. Thank You to those headhunters, almost always of small firms, who are graciously responsive. Thank You to those of you who are Employed and care- You know who you are and you are the true elite, far superior to your colleagues,

Thank You to the New York Times which published an article expounding on the discourtesy and disregard characterizing the hiring world today and the few, unique companies who refuse to cow to this trend. It was titled “Be Nice to Job Seekers. (They’re Shoppers, Too.).” How right the writer is! I, for example, will no longer shop at Ann Taylor given their treatment of me as an applicant. The write-up included the following:

“I recently heard a story about a manager from Nabisco...When he declared that his company responded to every resume it received — solicited and unsolicited — he was met with incredulous stares from his peers.
“Why respond to every resume when that’s clearly not necessary?” someone asked.
The Nabisco manager smiled and replied, “ Because — everyone eats cookies."

How delightful- and insightful- a response. So why are such wonderful individuals and companies like Nabisco and Southwest Airlines apparently in the minority? Perhaps this wake-up call is all that’s needed! Then again, it could be that the failure to reply and say ‘no, thank you’ is an unfortunate side effect of the manners we hold so dear. The word “no” is one which invokes a multitude of unpleasant associations and many of us seek to avoid it at all costs- including not saying it to others. Maybe it’s time for our optimistic society to embrace the usually-chastised naysayers for the level of comfort they have developed with uttering the N-word. Chances are that receiving an appropriately customized “no thank you but we appreciate your time” would leave us all much more satisfied and inclined to continue purchasing...be it cookies or clothing.