Hiring is one of the most important things you'll do as a manager or executive. But it's also one of the most difficult things to do well.
For most of our history, RentVision used the same standard hiring practices you see in any other company: When a job opened up, we created an ad for it and posted it on all the usual online listings. We'd sort through the predictable deluge of responses and, eventually, pick someone from that pool of applicants to fill the position.
The Failure of Conventional Hiring Practices
Here's where it got us: A huge chunk of those hires didn't work out. In some cases, an employee started really strong but tailed off dramatically in time. In other cases, it was a trainwreck from the start. But the thread that tied all these hires together is that eventually these employees were no longer performing. Of course, we had other employees hired through conventional practices that were spectacular, but the ratio of successful hires to failed hires was still not what we needed it to be.
In early 2012, I was fed up with having to manage these kinds of problems with employees and was desperate for a solution. The only obvious one I could see was to make the process a bit more drawn out and introduce new assessment methods. Late on a Friday evening, I finished my work and had come up with what I naively thought of as a foolproof hiring system. My plan was to experiment with this system for a position that was currently open for a new sales guy. And then fate intervened.
My brother went to a church event that night and met a guy who he thought would make a fantastic sales guy for the company. So we brought him in the next week for an initial interview. My hope was to use that as a first meeting to launch the many different phases of our new hiring process.
There was just one problem: The guy had another job offer on the table and, though we were his first choice, he couldn't keep that other company waiting for weeks for a decision while we went through our lengthy hiring process.
After a bit of thought, I decided to ditch my newly developed system and take a risk. We offered a job to this guy the same week of our first interview with him, based simply on the fact that he impressed my brother in a non-work setting and everyone in the interview in our office was impressed with him. That employee has turned into our company's top seller and is now a member of our leadership team.
Not only has this employee been a great success, but the positive experience of hiring him taught me something invaluable about the hiring process.
What are you looking for when you hire?
I heard from an HR consultant once that when you're hiring for a new position, you're looking for three things: competency, culture, and character. Competency should be self-explanatory. Culture refers to the applicant's fit with your company culture. Character is their dependability, trustworthiness, etc.
Conventional hiring practices struggle to really address those final two factors. Competency you can usually judge up front. You can construct interview questions to assess it and you can bring in different sorts of assessments you have applicants take. Plus you can usually get a decent idea of their skills based on their prior experience, any commendations or awards they've received, etc. You won't get a perfect picture, but you can get a decent one. And if you're a good interviewer, you should also be able to learn about the cultural fit during the interview process.
Unfortunately, conventional hiring doesn't tell you a ton about character. Applicants will obviously be on their best behavior at interviews and they aren't going to give you references that would say bad things about them.
A Better, More Human Way to Hire People
So how can you create a hiring process that gives you reliable information about all three needed qualities? You do what we (unintentionally) did when we hired our sales representative: Hire based on the personal relationships and connections of your employees. At RentVision, we call this network hiring.
With network hiring, you never post want ads online and never list your openings in a newspaper or on job sites. Instead, you go to your employees and say, "Hey everyone, we have an opening coming up in account management. Do you know anyone that would be a good fit?" The benefits to this system are numerous:
- You start out with plenty of knowledge about the applicant based on personal interactions in non-work settings. You've essentially been interviewing the applicant all along without you (or them) knowing it.
- You hire people that already have at least one friend in the company. And as multiple studies have shown, having friends at work is enormously important for work engagement, employee morale, and employee retention.
- It gives current employees a greater degree of ownership in the company and helps them connect their work for your company to the rest of their life.
- Finally, your hires are likely to be more loyal to your company because your company isn't just another step on the professional ladder, it's a place where they do work that they share with friends they have from outside the office.
There are a few technical things to think about in building a culture of network hiring in your company. It's important to remind employees to not think only of currently unemployed friends, but of any friend who'd be right for the job. You don't want your employees thinking, "who do I know that needs a job?" You want them asking themselves, "who do I know that would do this job well?"
You might also suggest that they go through their Facebook friends and look for people since they might not be able to remember all their friends who could be a good fit. As a manager or executive, you might also use Facebook's Graph Search feature to help find people. For example, if you are hiring a programmer, you might search "friends who like PHP" on Facebook or "friends of friends who like PHP."
To put a bit of skin on what we're talking about, we have doubled in size as a company since our first network hire in February of 2012. And in that time we have not had a single employee hired through network hiring leave the company. That's zero employee turnover in almost two years. That sort of stability is a huge benefit for any company.
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