Why Companies Should Hire Inexperienced People

Standard

I was listening to a Knowledge at Wharton podcast recently in which Peter Capelli was being interviewed. He described the mismatch in the USA between those who are looking to hire talent and those who job-seeking.

At the same time, my wife and I have been sharing about the number of friends we have in the USA who are jobhunting in their 50’s, having recently been laid off. Most are being replaced by younger staff – less expensive, better users of technology who are likely to improve their productivity faster.

Jamaica (and most of the Caribbean) doesn’t have that particular problem, but our youth would argue that we do little to develop new talent. That’s the topic I decided to focus on in this week’s article.

 


 

It’s a human resource mistake that appears, at first, to be a smart strategy: only hire people who can hit the ground running, without any training. Unfortunately, your company could be sowing the seeds of mediocrity in the form of a short-cut that draws long-term blood.

In the wake of the global recession, U.S. companies are complaining that they cannot find the workers they need. As a result, a huge number of jobs are going unfilled. At the same time, the unemployment rate among recent graduates is disturbingly high, as it is in Jamaica. According to business author Professor Peter Capelli, the reason is simple. Companies are looking for candidates with at least five years experience.

The logic, which also applies to local companies, is understandable. To fill an open position, just find someone with all the experience required. This is an extremely expensive option as these qualified people usually aren’t floating around looking for employment. They already have stable jobs and their employers are willing to go to extraordinary lengths to keep them happy.

This predatory approach is, according to Capelli, a way of compensating for a lack of internal training. In 1979, a young employee received 2.5 weeks of training per year on average. By 2014, only 29% had received any training whatsoever in the past five years.

My observation is that companies are expecting employees to train themselves.

This is not crazy thinking. Back in the 1990’s, thousands of workers sat in classrooms to learn Windows, Excel and Word. Today, almost no-one is trained to use these programmes… instead, without a single paragraph of explanation or a minute of video they get themselves and running in an instant. Today’s employee has learned how to teach themselves.

Unfortunately, this miraculous, modern-day skill doesn’t scale to include other areas of learning. Even the most adept self-learner has a difficult time picking up decent “soft skills” such as negotiation, time management and leadership. Furthermore, the horror stories I hear coming from university departments lead me to think that more academic education doesn’t help.

The ultimate answer is simple: change the way your company conceives of human resources and their role in the enterprise.

Unlike a computing or financial resource, a human resource has the innate ability to learn and grow in stature. However, in most companies how this happens is a mystery. They may have excellent internal processes for tracking every penny, but have no clue how a leader develops within their own walls. The actions required and the time someone needs to invest to learn these skills are the stuff of myths and anecdotes.

Many human resource professionals argue that it’s better to have the perfect training system than to be forced to search for the perfect employee. Yet, your company is cutting back on employee development and doing little to leverage the low-cost training available via the internet. Why is this happening?

Reason #1 – All Costs and No Benefits
Perhaps your internal management systems, like many others, is lopsided. It reports primarily financial metrics which highlight all the costs of a training intervention but none of the benefits. As a result, employee development is the first item your organization cuts from every annual budget. Making a balanced decision to offer training requires different tools, which your company lacks.

Reason #2 – Hiring for the Short Term
Disney and Southwest Airlines are a few of the companies known for their policy of hiring primarily for attitude. This is especially true in customer-facing positions where months (not years) of technical training are required. Their stance is that specific skills can be taught, but the right frame of mind cannot. This particular tactic makes perfect sense when your company takes a long-term perspective.

Reason #3 – Hiring a Whole Person vs. a Functionary
Your company may be typical in these recessionary times, hiring people for jobs they can perform right away. However, it runs the risk of staffing itself with people who are expert at soon-to-be-obsolete functions. A better strategy might be to hire fast learners who can pick up any technology quickly while changing their behaviour to suit new circumstances. Oftentimes, these nimble employees lack experience due to their age, but are better able to transform the job itself. Some of them may already be in your company, stuck in a dead-end job. Most companies are weak at identifying talent that is sitting right underneath their noses.

The trap of mediocrity can be avoided but great companies aren’t built by cherry-picking talent from outside. Instead, they build training systems that take available people, building enduring cultures around them. In these times, this approach “costs” more but there is no such thing as a company cost-cutting its way to market dominance. That only comes from investing in people with the highest potential.

Francis Wade is the author of Perfect Time-Based Productivity and a management consultant. To receive a free Summary of each of his past articles, send email to columns@fwconsulting.com

Click here to read the article on the Gleaner website.

The low-pay productivity trap

Standard

Is Your Company Made Up of Thirds and Fourths?

Some Jamaican executives are caught in an unproductive trap of their own making. By investing as little as possible in their people’s development, they have produced cultures of low productivity. How long does it take for such a policy to bear bitter fruit and how can it be reversed?

Most of us are shocked to hear of a seemingly mediocre acquaintance or colleague who migrates, then accomplishes something miraculous. It’s hard to pinpoint why in every case, but one answer may be that many local companies stifle their staff’s development. By systematically failing to invest in their growth, they reinforce low standards.

In some organizations, the problem starts even earlier. As a former client’s executive team complained: “Our company is filled with under-performers – we only hire thirds and fourths.” That is, whenever they bring people in for interviews to fill a position, they invariably end up hiring the third or fourth choice; never the first or second. The reason? They simply aren’t paying enough.

When asked why they don’t trust their own process, thereby hiring better people then helping them to perform, they further complained. “If our people were to find out how much that new person was being paid, there would be a riot!” With that retort, by the end of the meeting it was clear that the current staff complement would be unable to implement the breakthrough strategy the company needed to ensure its existence. The unplanned choices they had made to hire “thirds and fourths” had become a huge problem that could not be easily fixed.

Like many other companies, they were stuck in a trap
of their own thinking, committing their company to low standards that were now inescapable. What can the average company do to prevent this from happening?

1. Seek out Global Best-in-Class Behaviours
Somewhere in the world, there is a company that’s doing the same work, using less people at a lower cost. In some industries, like insurance, benchmarking resources like www.opsdog.com are easy to find and can be used as a ready comparison. Whatever your industry, you need to discover what the best in the world are doing, and use them as a standard. If you find a large gap, you should be alarmed as your industry may be ripe for disruption.

Before a tragedy takes place, use the information to set new goals for your company. Even if you cannot find a direct comparison, understand that a viable business must conduct a relentless search for ways to reduce costs and create value for customers. To fail to do so is to invite disaster.

2. Reeingineer Core Processes
One of the easiest ways to reduce costs and create value is to identify and reengineer the company’s core processes. The effect of mediocre staff is only amplified when they are stuck doing things they shouldn’t, in processes that are outdated. It’s tempting to bring in new technology but it’s a mistake to rush into an automation project when the underlying ways of doing work are not well understood. Even the best employees in the world can only do so much when they are limited by poor workflows.

The steps involved in process reengineering are easy to find but most companies can’t summon the will. They fail to see that by not improving their processes, they hasten their own demise as technology changes accelerate.

3. Give up ego
Even companies that see the need to make process changes don’t have the courage to bring in the right staff to lead such efforts. Too many Jamaican executives use all sorts of tricks to make sure they are the smartest people in the room at all times. They shy away from hiring staff who appear to be brighter, or more intelligent. This sometimes unconscious behaviour is in stark contrast to that of the best managers. By contrast, they encourage younger staff to continuously step up to duties requiring greater responsibility and skill. This requires an investment in training but it also represents a willingness to place the company’s welfare over your own personal interests.

4. Develop staff aggressively, for free
As I have mentioned before in this column, too many managers give up on developing their staff because they lack a “proper” budget. The fact is, the on-line world now provides a number of free learning opportunities that can be used in creative ways. Human Resource professionals must sometimes be pushed by executives to find these alternatives, rather than waiting for the funds for classroom training to be made available.

A handful of well-trained, hyper-productive employees can outperform an organization overstuffed with “thirds and fourths.” But the place to start for some companies is by looking and making room for the best. They will never, ever be the least expensive but they may be the ones who more than make up for the extra pay required to bring them in and keep them around.

Francis Wade is the author of Perfect Time-Based Productivity and a management consultant. To receive a free Summary of each of his past articles, send email to columns@fwconsulting.com
http://jamaica-gleaner.com/article/business/20150705/francis-wade-low-pay-productivity-trap