4 Hiring Mistakes and How to Prevent Them

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

Advertiser Disclosure ▾

This page contains affiliate links from which we receive a compensation. Like many publications Wise Bread is supported by affiliate commission from partner companies whose products appear on our site. This may influence which products we write about and the location and order in which products appear. We aren't able to cover every product in the marketplace.

Wise Bread Picks

• Travel Rewards Credit Cards
• Cash Back Credit Cards
• 0% Balance Transfer Credit Cards

Two out of three new hires will disappoint you, partly because 95 out of 100 of them exaggerated to get the job, and one in three companies will be involved a labor-related lawsuit this year. These Bureau of Labor Statistics (BLS) numbers are sobering, but they reflect hiring mistakes that could have been avoided. Here are my top four mistakes and some advice on how to avoid them.

Mistake #1: Relying Solely on Interviews to Pick Candidates

Did you know that interviews are about as useful as flipping a coin to select candidates? Let’s say you decide to hire someone if the coin comes up heads — 50 percent of the time it will. A University of Michigan study showed that using typical, “So tell me about yourself,” job interviews you’ll pick the right candidate only two percent better than the coin will, a whopping 52 percent of time.

Why are interviews so bad at helping you pick the right person? Because they’re typically only used as a process to evaluate the “chemistry” between the interviewer and the candidate. That’s worth knowing — you generally don’t want a jerk around even if they’re good at what they do. But to really predict how an employee will perform (and act) once they’re hired, you need to use a structured interview with questions that have been validated as good predictors of performance.

Behavioral descriptive interviews (BDI) are available as old-fashioned paper and pencil forms, web-based questionnaires, and fully automated online interviews tailored to your company’s needs. They’re easy and economical to integrate into your hiring process — especially when you consider the difficulty and cost of employee turnover — and they can help you avoid the mistake of relying on subjective interviews to make hiring decisions.

Mistake #2: Assuming Superstars Are Good Models

If you have a top-performing employee, it stands to reason you’d want to try to hire people just like her or him. Only one problem: what makes people successful is practically impossible to determine by looking at their characteristics. In one study, for example, the three main characteristics of the best and the worst sales people were identical, right down to the fact that they both could be reliably identified by their black wingtip shoes.

But the difference between high performers and poor performers does tell you something. You can avoid the mistake of trying to clone your superstars by finding someone who has done the work to validate the critical skills for success. For example, if you’re looking to hire someone to manage a remote workforce, there’s a terrific Conference Board study, that teases out the key competencies for remote managers and employees by looking at the differences between successful ones and less successful ones. I did a webinar on the topic recently; you'll find a summary of the study and a recording of the webinar on our website at TeleworkResearchNetwork.com.

Mistake #3: Assuming You Know What Skills Are Required

The trouble with common sense is it’s often wrong. Or as Robert Heinlein put it, “The truth of a proposition has nothing to do with its credibility. And vice versa.”

All of which is to say that common sense suggests certain personalities are required for someone to be a successful manager, salesperson, etc. That seems credible, but it’s not true. Even producers of personality tests, such as the Myers Briggs Type Indicator (MBTI) assessment, will admit their tests are only useful for training or self-awareness, but not for hiring. The only way you can predict success for certain tasks is through skills-based or job-knowledge tests that have been validated with solid research. Find them and use them, and you’ll avoid this costly mistake.

Mistake #4: Failing to Do a Careful Background Check

Pre-screening for, say, salary expectations, can save you a lot of wasted time. But failing to carefully check candidate’s claims of employment, education, and experience can cost a lot more than just wasted time. As many as one in three resumes leave out important information and some estimates suggest as much as 40 percent of all information on resumes is false or misleading.

Besides trying to determine if someone is a good fit for the organization in terms of personality and skills, you also have to assess the risk they represent to your organization. In fact, some jobs including those involving children, the elderly, the disabled, and the government require background checks. Failing to exercise due diligence can cost you plenty in a negligent hiring lawsuit if an employee harms someone else.

When you consider that the cost of hiring a new employee is estimated at 75 to 200 percent of salary, careful hiring decisions represent money you can take to the bank.