I recently read a report by PwC that said that one in four CEOs are unable to pursue a market opportunity, or have to cancel and or delay a strategic initiative, because of talent challenges.
Plus, according to a productivity report by EY, not only are CEOs finding it hard acquiring great talent but when they do hire; 1 in 3 of those staff members let the team down due to low productivity, costing Australian businesses over $40 Billion in wasted time. Yes that’s B for billions!
As I sat there in my office reflecting on this information, I started thinking about the various businesses I have operated over the past 12 years and, it all really made sense to me.
The four businesses I failed in earlier on in my business career were mainly due to bad recruitment decisions, either employing the wrong people or hiring the right people for the wrong role.
On the flip side when I looked at the businesses I had sold, I quickly noticed the big difference. While there were many reasons for our successful exits, none of them were as profound as the impact our employees made to the business.
Whether you are a small business, in a family owned business or operating a large corporation, competition is so fierce and change so fast, that any competitive edge gained by the introduction of new processes or technology can be short-lived if competitors adopt the same technology.
But, to implement change their people must have the same skills, abilities and passion in order to be able to execute. This is why I believe the new competitive advantage in business is: human capital.
Noble prize winning economist Gary S. Becker, who coined the term “human capital” says that “the basic resource in any company is the people in it.”
In my opinion, the most successful companies in the 21st century will be those that are able hire great talent for their business. And there in lies the issue.
In July 2011, a report by BRW they found that the number one challenge for fastest growing small businesses is hiring quality talent with over 70 per cent of them struggling. I think this would also be true for many larger companies. And what’s even worse is that approximately 44 per cent of new hires are considered “unsatisfactory” by employers.
To gain a deeper insight and understanding into the reasons why so many companies face these challenges, I recently spoke with Julie Bowden, founder of True Colours PEOPLE Solutions.
Over the past three decades they have worked with some of the biggest brands around the world helping them reduce staff turnover, recruitment and training costs, using a proven, scientific system that has totally reinvented the recruitment process, bringing it into the 21st century!
While there are many reasons that contribute to the challenges employers face when hiring and maintaining great talent, it is often because of outdated recruitment processes, going back 50 years.
There are the three mistakes that have the biggest impact:
1) Relying on outdated recruitment systems that have not changed since the 1950’s, such as using resumes when selecting candidates. According to a recent survey to 23,000 businesses, 56.7 per cent have come across candidates who have lied.
2) Using gut feelings to help decide if this is the right person for the role in question. How can you possibly decide if they will be highly productive or won’t make costly mistakes and are able to build strong relationships with clients and with the current team?
3) Not having a measurable, proven, hiring system. Over 80 per cent of our behaviour is driven from our sub-conscious signature strengths. Would it be useful to have a benchmark of the scores of your current best people to compare against applicants, before even looking at resumes?
This was a real eye opener for me. I can’t tell you how many times I had personally made these same mistakes when recruiting staff for my own businesses without consciously being aware of it.
That’s the scariest part of it all; at least if you know your making a mistake you can fix it right? You can’t fix what you don’t know.
Not only did this cost me money but, it also a lot of time and resources trying to recruit someone else to get up to speed with the knowledge and experience necessary to succeed.
Having gone through this process many times, I am now of the opinion that the knowledge, experience and attitude employees bring to work is probably the single greatest driver of an organisation’s success.
The combined knowledge bank of your employees helps build your organisation as well as preserve, maintain and improve it.
In my time, I have met hundreds of successful CEOs and founders across so many different industries and, to this date, I have not come across one CEO who won’t credit the success of their organisation to the help of their staff and employees within their organisation.
The prioritisation of the value of human capital has changed the profile of what a successful candidate should look like. Even in the most technical roles, as the value of ability of human talent is becoming more recognised and appreciated.
To help you find, hire and retain more quality staff, here True Colours PEOPLE Solutions top five tips on how this unique system can not only take the frustration out of hiring, but ensures that you never have to employ the wrong people ever again.
1) Create a benchmark of the success drivers of your current best people or team. Provide scores out of 10 and overall scores out of 100. Understand what creates success and what causes frustration
2) Identify the essential sub-conscious signature strengths that drive your best people and high performers.
3) Define the candidate signature strengths you must have, based on the success traits of your best people.
4) Benchmark candidates to discover whose scores either match or exceed your champions. Based on roles and our extensive experience, only 3-10 per cent of applicants are the right match.
5) Create a permanent and strategic people plan. Align it to your business plan and only hire people whose strengths either match or exceed the score levels of your very best.
That’s right. You need to create your very own A Team.