According to Dr. Brad Smart, the founder of Topgrading Inc., global HR leaders for the Fortune 100 companies only rate their hiring effectiveness at 20%. This means they deem only 20% of their hires to be top performers. Companies of all sizes routinely (and usually) make hiring mistakes on inferior employees.

For smaller companies, the effects of mis-hires are even more pronounced due to the fact that the organizations are smaller and each person contributes a bigger percentage to the success of an organization. For example, a mis-hire of a $100,000 executive at a mid-sized company can be catastrophic to the payroll, opportunity cost, and culture of the company.

Here are 5 common hiring mistakes most companies routinely make:

1. Not Having a Defined Job Description.

Let’s face it ‒ 99% of job descriptions are poor. This is a key reason you are not attracting the quality and quantity of candidates you desire. As a side note, this is also a key reason why many of your current employees are not meeting your expectations! Here is a simple and effective rule. Do not allow a hiring manager to post without updating and conducting a thorough review of the job description linked to the posting. They will protest and argue that they need a person immediately, but you will be very happy you followed the process.

2. Not Looking at Enough Candidates.

In the rush to fill an opening, most companies tender offers to the first reasonable candidates they find. Then they follow the adage “bad breath is better than no breath.” The other related problem is that companies tend to be very stingy with their recruiting budgets. This is a huge paradox considering that most companies espouse “our people are our most valuable asset.” There are many practical strategies that should be employed to generate large candidate pools. Our recommendation is to deploy a portfolio of strategies to ensure you are looking at 100 quality applicants per opening.

3. Not Having a Robust Interview Process.

Most companies use what we call a “Round Robin” competency interview or a “Tell me About Yourself” interview. Both of these shallow interview techniques are ineffective and are easily gamed by even the most inexperienced candidate. They simply go to your website and play back in the interview what you want to hear. Poor interview techniques that do not effectively identify high performers from B and C Players are a key reason companies so often mis-hire underperformers. Only a robust, results-based structured interview process like the Topgrading interview improves these odds. This interview technique accurately determines what the candidate has actually done and not what the candidate thinks you want to hear.

4. Not Conducting Sufficient Reference Checks.

Because they are not looking at enough candidates and have an ineffective and drawn-out interview process, when they do find a candidate they like, many companies tender a job offer before reference checks are made. This mistake happens all the time. We recommend that you actually conduct detailed reference interviews and collect information on how to best on-board your prospective employee during this time. Have a formalized questionnaire with questions on their performance prepared. By all means, do not tender a formal offer until the detailed findings of at least four reference interviews have been compiled and reviewed formally with your team. As a critical final step, in addition to the reference interviews, be sure to conduct a criminal background check and a credit score check. Many candidates with dubious criminal histories are professional liars and can fool even experienced interviewers.

5. Skipping Your Own Process.

After improving their hiring process using the techniques outlined above, companies often become complacent and either overtly or inadvertently skipping or shortcutting their own processes. We see this all the time. Inevitably, skipping or shortcutting the process leads to mis-hires. One of the many reasons to employ a talented search consultant is to ensure you follow your own process. It’s too easy to make shortcuts without a talented professional guiding and holding you accountable.

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