Strategies to Avoid a Bad Hire

Recruiting, training and onboarding any insurance or financial advisor or a marketing or engineering leader- name the role- can be expensive, time consuming and, when exiting a bad hire, potentially filled with grievances, court filings, settlements or residual bad feelings.  Since non-compete clauses have been largely reduced to having no meaningful impact in recent years, this set of circumstances reminds us of the essential challenge: how to do we recruit more capable and committed talent and avoid a toxic person or underachiever?

While there’s no perfect answer, we have learned much at Insurex from our clients and our individual experiences as CEO’s.  Here are thoughts for you to consider and share with your recruiting and field force:

1.         Since most people who resign voluntarily because they dislike their supervisor, not the company, have you used the probationary period to ask meaningful questions, notably if the personality and performance standards are being met?  If not, exit that person as early as possible to ensure they can rebound quickly and yes, with sufficient severance and even consider a release of legal claims if appropriate.

2.         Thinking about number one, it’s out of order, isn’t it?  The question we should be asking first is: does the person have the skill set, personality and work ethic needed to succeed?  There are personality tests that are legal in most jurisdictions such as the Hogan Personality Inventory that can be incredibly insightful.  Some major financial institutions now have their recruiting firm insist that a CEO, CFO or COO take the most empirically proven test of all, the Minnesota Multiphasic Personality Inventory (MMPI-3).  This test can only be interpreted by a clinical specialist for you but it can help a Board of Directors better understand the potential for massive success or personality disorders, addictions and someone who thrives on conflict.   It has been successfully used by leading employers since 1943.

Quick case study: a mid-size insurance firm followed typical protocol and was on the verge of offering an EVP role to a dynamic individual who served in similar role in two peer firms with generally excellent results.  Two lawsuits regarding sexual harassment were noted by the recruiting firm, but both were settled with little information available.  We suggested that an MMPI be administered to potentially uncover whether any personality conflicts may emerge. Remember that the MMPI has been so rigorously tested that it’s accepted in a court of law, similar to DNA, for its reliability.  The psychologist who interpreted the results and reported to executive leadership shared issues that included propensity for sexual harassment, bullying and a specific mental health issue that was not discussed with specificity to protect the candidate.  A potentially devastating hire was avoided.

3.         In interviews, it’s not uncommon that recruiters focus on “is this person a good fit? Are they likeable? Can they mimic past success within our culture?”  Those are good starting points, but here’s a question that smart companies are embedding into their recruiting DNA: “Tell me about a highly stressful situation involving a former employee and how you managed that situation.”  It’s a powerful question that we have embedded into well over half of the Fortune 100 with astounding success. Why?  The person has already revealed through their credentials their very best projects and educational credentials. What could derail them is if they have had interpersonal problems with others and if they are willing to openly discuss, through this question, what they constitute as a stressful situation.  I often tell employers: “if any candidate responds- ‘well, I’ve never had a stressful interaction with a co-worker’ you should move on to someone whose candor is refreshing.

4.         Social media scans, background checks for criminal and financial infractions—these and many other standard efforts are expected and they can be useful.  But think about this: you may be making a commitment to a person who could spend the next decade or more helping you grow your business, generate leads, deliver results and be a brand ambassador.  Isn’t it worth an extra two or three hours of time to have a few more interviews in person with this candidate with others in your firm who are not in your circle of trust?  Seeking new insight from these persons- at all levels- can be refreshing. They may validate that your instinct towards this great fit is correct.  But what if they share a few hesitancies- and you find a common thread in such? 

Human Resources should never own recruiting and hiring alone. The CEO and Board of every organization is increasingly being asked by stakeholders: “what did you know, when did you know it, and what did you do about it?” not only after scandals, but when employees are accused of embezzlement, abuse of power, sexual and other harassment and yes, selling competitive intelligence.  Dig deeper. Think about testing protocols.  And go back and look at your turnover in recent years.  If it’s unacceptable to you, just imagine the trickle down impact on your credibility.