July 20, 2023 – Recruiting the right top talent is one of the biggest challenges in business today. Recruiters say that regardless of the ups or downs of the economy or changes in the workplace environment due to cultural trends or a worldwide pandemic, finding, hiring, and onboarding the people who will positively contribute to your team for the long haul remains an utmost priority for companies. A mis-hire in this process can cost a business a great deal of money but, equally important, it can cost a great deal of time, says Tim Gardner of Teamalytics in a recent interview with Hunt Scanlon Media. “For private equity firms, this negative impact is doubled,” he said.
When the speed of success is of the essence, there is more to pay attention to than simply getting good people in the front door; you must also attempt to ensure they are a good team fit as well as provide a structure that closes the back door and works to keep them from bailing out at the first new opportunity that comes along, according to Dr. Gardner. These are such critical issues, he says, that most business leaders wonder whether or not there is a better way to approach this problem other than the well-worn methods that often leave them regretting the new hire who initially appeared so promising.
“We believe there is,” Dr. Gardner said. “HR professionals and recruiters know that there is an arsenal available to use in the attempt to win the talent war. Medical benefits, retirement plans, career development pathways, remote work policies, and, of course, compensation, are all important parts of the attraction equation. Additionally, there is the sincere attempt to discern how the candidate is going to perform if they are actually hired. This is where things get tricky.”
Dr. Gardner says that there are many questions to ask. Can they get along well with others? Will they be fun to have on the team? Can they give and receive effective feedback? Are they confident without being cocky? Will they be a leader and a team player? Are they task-driven and will get things done without leaving bodies in their wake? Ultimately, will they behave in the way that we need them in order to contribute to our success?
“In reality, this is where the traditional résumé, references, and interview process falls short,” said Dr. Gardner. “Resumes provide you with a candidate’s personal highlight reel. References are picked by the candidate to knowingly give a positive review. And interviews give every person the chance to be on their best behavior. If you think about it, these are the basis for which we conventionally hire people. Does their résumé look good? Did the hand-picked references give us a thumbs up? And did they pull off a passable interview? If yes, we hire them.”
Tim Gardner, SVP of consulting at Teamalytics, is passionate about helping people live their best lives in every area. Since the early 1980s, he has worked extensively as a leader and innovator in the fields of human relationships, organizational culture, and leadership development. At Teamalytics, Dr. Gardner brings his straight-talking, highly interactive and humor-laden style to create lasting personal and team change, blending the latest in scientific research with unique individual data.
Dr. Gardner asks why do we often terminate people? “Behavior,” he said. “And this is where the need for a better approach comes in. What if we could predict that? What if recruiters and HR leaders had the ability to accurately forecast how someone is going to behave before they hire them? What if PE partners could have deeper insight into exactly how a candidate is going to act with the team once they join their portco? They can.”
A New Way to Predict Future Candidate Behavior
Beyond interviews and résumés, those involved in the hiring process often rely on some type of personal, self-assessment tool to predict performance, according to Dr. Gardner. “The hope in these appraisals is to determine how someone will interact with and perform on a team; they seek to predict behavior based on the understanding that personalities help determine behavior. However, even though an individual’s personality helps drive behaviors, they do not guarantee behaviors. They do not identify behaviors that can be leveraged for team acceleration, nor do they highlight behaviors that could be highly detrimental if not modified or eliminated. Furthermore, they are self-assessments and therefore fail to inform you how this particular person has impacted those they’ve worked with in the past.”
In short, Dr. Gardner says that these assessments don’t fully predict how someone is going to behave in certain critical areas after an offer letter is signed. For any organization, this can be highly detrimental. For PE firms, this can be devastating.”
“The best predictor of someone’s future behavior on a team is not someone’s personality; rather, the best predictor of future behavior is past behavior,” Dr. Gardner said. “But how can you measure those behaviors, both productive and counter-productive, in a quick, scientifically validated manner that includes collecting multi-rater 360-degree.”
Related: Why We Make Bad Hires
“Whether the economy is up or down, or if things are changing in the workplace due to cultural shifts or unexpected events like a pandemic, companies are always focused on bringing in people who will truly make a positive impact on their team for the long haul,” Dr. Gardner said. “It’s not just about the money lost from a bad hire, but also the broader impact across the organization and the valuable time that goes down the drain. That’s why it’s crucial for companies to have strong recruitment strategies in place, with thorough screening and effective onboarding processes, to minimize the risks of hiring the wrong person. By using smart methods to assess the right fit, businesses can set themselves up for success in a competitive world and create a thriving and productive workforce.”
Avoiding Bad Hires for Private Equity Portfolio Companies
Making the wrong C-suite hire is the biggest risk facing any portfolio company. Besides wasting compensation, a mis-hire in the C-suite can result in strategy mistakes, broken processes, and poor employee morale. But even worse for a private equity portfolio company, a bad C-suite hire consumes precious execution runway, the time that the company should be implementing the value creation plan. That means even one bad C-suite hire can increase the hold period or even derail the investment thesis entirely.
Teamalytics offers a candidate selection tool uses a statistically validated 360-degree assessment that pinpoints behavioral characteristics and predicts future behavior and performance. The instrument combines a user’s self-assessment with other 360-degree assessments by colleagues, integrating all perspectives into a proprietary report that catalyzes personal growth. The 360 report was developed from psychological techniques and measures that have been validated and researched.
“All-in-all, the Teamalytics candidate selection tool applies an approach for discovering exactly where a potential hire has had a positive impact on teams in the past… and where they may have held themselves and the teams they’ve been on back,” said Dr. Gardner. “It provides a quick, yet comprehensive view of how each candidate scored on each behavior, giving you the opportunity to identify the strengths and risks of each candidate as well as dissimilarities, trends, and potential areas of conflict with the existing team. In the end, finding the right top talent is still a major challenge for businesses today.”
Related: 4 Steps to Avoid Making a Bad Hire
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media