Recruitment insights

What Kenyan employers want — Digging into our 2018 data

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When an employer works with us to recruit for an open position, we tailor an online application to include screening questions and assessments that gauge for the must-have skills they’re looking for. Once they’ve reviewed their list of top performers on our Talent Gallery, hiring managers get to provide feedback on their reasons for rejecting and or moving a candidate forward to the interview stage. After running over 200 jobs in 2018, we have a ton of data on what pushes a candidate over the line from “maybe” to “I need to meet them!”

On our Talent Gallery, employers give us feedback on why they decided to advance or decline candidates

Here are some of the main reasons, and corresponding tips for both hiring managers and candidates:

Assessment scores: High performance on skills assessments was one of the top reasons that hiring managers decided to move a candidate forward on the Shortlist platform. Prioritizing candidates based on assessment scores is a smart way for recruiters to spend their valuable interviewing time with candidates who have already shown they have the ability to perform on the job. After all, last year we found that SMEs in Kenya are spending around 19 hours conducting interviews for a single role!The Shortlist assessments approach is based on 85 years of research that show that cognitive tests, work samples, and structured interviews have the highest predictive value in understanding how someone will perform on a job.

Tip for hiring managers: How can you increase the value of assessments in selection? Learn from our white paper on Science of Hiring on Kenya.

Relevant experience: Experience remains a top factor in why an employer would choose to move forward with a candidate. This is because it gives the hiring manager the assurance of the candidate’s ability to apply relevant skills in the job for productivity. A degree qualification used to be a major deciding factor in who got the job, but since there’s been a rise in the acquisition of degrees over recent years in Kenya, employers are forced to focus more on experience.

Tip for candidates: Highlight key experiences in your job application and resume to avoid the chance of an employer discarding it without a second thought.

Potential: Candidate potential appeared to stimulate greater interest than actual accomplishments. In every instance that a hiring manager highlighted the potential of the candidate on our platform, the candidate ended up getting hired! For the hiring managers, candidates who had demonstrated an initial aptitude for their technical abilities and behavioural competencies stood a higher chance if they were considered to have future potential to make a bigger impact than the role they were applying for at the time.

Tip for candidates: As an applicant, use this to your advantage by emphasizing your future value, in addition to past achievements when applying for a job.

Tip for hiring managers: You probably know that performance is what you do, potential is what you could do. Here is a guide on hiring for potential over experience.

Culture Fit: Like potential, culture fit was a sure predictor of getting hired in 2018. What is even more interesting is that all the hiring managers who highlighted the culture fit were from Small and Growing Businesses (SGBs). Culture fit is crucial for SGBs mostly because they require a different approach from bigger companies, often seeking candidates who take initiative, seek growth opportunities, and are comfortable with ambiguity. The impact of hiring a great fit or a mismatch if often amplified in SGBS due to the small number of staff. Further to this, a study also shows that 84% of recruiters agree culture fit is an important factor in recruitment compared to skills.

Tip: Is the candidate someone who will perform well in your work environment and collaborate effectively with your existing team? If your answer is yes, then they are most likely a good fit. Successful companies such as Netflix and LinkedIn are already hiring for culture fit!

Stability: Although the least considered factor in recruitment, hiring managers remain cautious of profiles full of short job stints as they may be a sign of being unstable or disloyal. However, our data shows that if a candidate has the right experience and high assessment scores then hiring managers are likely to overlook the job-hopping. There’s no doubt about it — you will have to invest resources for a winning recruitment process, and wasting time, money and energy to hire someone who may not stick with you can be frustrating.

Tip: Before you write off candidates with meandering job history, adopt techniques for assessing job hoppers to ensure you don’t miss out on a star recruit.

All in all, recruitment is a test for both hiring managers and applicants. Candidates need to bring their best foot forward to stand a chance of being selected, while recruiters need to pick the best talent to ensure productivity and avoid spending so much time and resources in rehiring.

Two tried and tested ways to recruit all-star teams

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Imagine you’re the coach of a basketball team (a dream that my high school self imagined all the time). How would you run your try-outs? Would you look at the list of other teams the athletes have played for, or awards they’ve received, or ask them about their aspirations to play professional basketball? Would you have them talk about a time they missed a shot and needed to bounce back?

Probably not. Most likely, you’d put them on the court and see how they play.

Sure, past experience and accolades matter, but resumes (in sports as in life) are rarely as good a predictor of performance as good old “show me what you can do.” The idea of selecting someone without gauging her or his performance seems nonsensical, but in the absence of a different framework, and with limited time to make decisions, this is actually how many small and growing businesses (SGBs) approach talent acquisition.

Hiring is hard

Startups around the world struggle with human capital. In fact, when Village Capital surveyed its portfolio of over 400 entrepreneurs, the respondents cited talent acquisition and retention as their number one barrier to growth, even higher than financing. And without following best practices, it can also be incredibly time-consuming: a report we published this year with FSD Kenya shows that for a single mid-level hire, Kenyan SMEs are spending around 18 hours screening CVs, and then 19 additional hours interviewing candidates — and if anything this number feels low!

I saw this dilemma firsthand while investing in fintech startups for Accion Venture Lab: Many organizations are so focused on raising financial capital that they are blindsided by the difficulty of running effective hiring processes, a necessity for scaling successfully. They would spend hours screening hundreds of CVs, interview some of the candidates (often selected based on university, brand name company experience, or personal connections), and make a decision based on who they liked the most. Not only is this method rife with bias, but it does little to predict who will perform best on the job.

What’s an SGB to do?

At Shortlist, we use competency-based assessments and structured interviews to hire high-performing, best-fit candidates for our clients (and also to build our own team). Aside from being tried and tested through our work with over 100 organizations, these methods are also backed up by countless studies, including this meta-analysis of over 80 years of research. Let’s take a closer look at these two approaches and how you can adopt them in your organization:

Assign work sample or competency-based assessments to test candidate ability: There are two ways to go about this: 1) Give candidates a sample assignment that mimics what they would do on the job (e.g., Excel exercise or social media drafts), and score their performance. Or, 2) Identify the core competencies needed to perform on the job (whether hard or soft skills) and create exercises that test them (e.g., present a fictional situation around reaching deadlines and ask applicants to prioritize actions, to assess for project management skills). At Shortlist, we use a mix of the two.

Here are some tips for implementing assessments at your organization:

  • Avoid making an exhaustive list of competencies and skills your ideal applicant would possess — instead, hone in on the top 3–4 that are absolutely critical.
  • Make sure you can objectively measure assessment performance — make a grading rubric, or create multiple-choice questions that have one right answer.
  • Implement this step (or at least part of this step) before an interview, not after. That way you’ll only spend valuable in-person time on pre-vetted candidates.

Start doing structured interviews: Studies show that judgments made in the first 20 seconds of a job interview can predict the outcome; interviewers often spend the rest of the meeting asking leading questions and interpreting answers in a way that confirms their initial hypothesis about the candidates. A great way to overcome these subconscious biases is the structured interview method, which keeps interviews consistent, predictive, and fair. These are the key elements of a structured interview:

  • Every candidate who is interviewed is asked the same set of questions, regardless of the interviewer, and interviewers agree in advance what they are looking for in a good answer.
  • Questions are explicitly linked to key competencies required to do the job, avoiding common “getting to know you” questions that perpetuate biases.
  • A standard rating scale is used by interviewers to grade candidate answers.

Why does this matter?

Getting hiring right is important for all organizations, but is especially true for SGBs. Let’s go back to the basketball example. With only five team members on the court at once, every player counts. Similarly, in a startup or small organization, every new hire is critical to building on your momentum and solidifying your team culture. On a macro level, looking past pedigree and refocusing on potential is the first step towards a world where everyone gets a shot at fulfilling professional experiences.

I hope this was a helpful starting point for you to reframe your hiring practices and find your next all-star! For more hiring tips and resources, visit our blog and follow us on Twitter.

Paul Breloff is the CEO and co-founder of Shortlist, which helps growing enterprises in India and East Africa hire based on skills and potential, rather than pedigree.

Looking to build your own all-star team? Let Shortlist help you; we offer a wide range of recruitment solutions that help companies build great teams.

Build your all star team with Shortlist

Past blogs in this series on hiring:

Upcoming blogs:

  • Martha D. Karimi and Manuela Müller, Founders, Edge Consulting — Onboarding, setting up for success in a resource constrained environment
  • Lyndsey Vandament, Kerry Nasidai and Sarah Ngima, Head of Talent Practice, Open Capital Advisors — Where do you want to be in 5 years? Leveraging SGB-tailored talent tools.
  • Rebecca Harrison, CEO and Co-Founder, African Management Initiative — Moving from entrepreneur and hustler to manager and leader: How to embed the management practices that will support your business at scale
  • Caroline Gertsch, Director, Amani Institute— Is your team performing to the best of its potential?
  • Ayla Schlosser, CEO and Co-Founder, Resonate — How can you use storytelling to drive results?
Hiring in Kenya

Hiring in Kenya: Three takeaways from our new report

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“How much time are growing companies spending on hiring?”

“What is most challenging and time-consuming about the hiring process?”

“Can we quantify the benefits of making a great hire?”

As we help growing companies built high performing teams, these are a few of the questions that we keep being asked. Despite how basic these questions may seem, there’s actually very little reliable data out there to answer them, at least in an emerging market context. To begin to change that, we partnered with FSD Kenya and Open Capital Advisors to learn more about how small and medium-size enterprises (SMEs) in Kenya are hiring. We’re excited to release the report and share its findings with you. In case you don’t have time to read it in full, here are three takeaways:

1. Hiring is extremely time-consuming

During the decade we spent — before and after we created Shortlist — helping SMEs source and screen talent, we have become acutely aware that hiring is massively time consuming. From figuring out what to put in a job description, to sourcing candidates through multiple channels, to sifting through hundreds of applications, to organising and managing interviews, to all the follow-up needed to negotiate a final offer — the hours add up. But most companies that we’ve observed, including the ones we interviewed for this research, aren’t actually recording or analysing the time it takes them to hire, and consequently don’t know what it’s really costing them.

We found that for a single mid-level hire, companies are spending around 18 hours screening CVs, and then 19 additional hours interviewing candidates. Unfortunately, many hiring managers report feeling that much of the time spent before the interview stage is being wasted.

How can organisations screen and interview candidates more efficiently and effectively? A few solutions:

  • Rather than filtering candidates based on CV data, implement a competency-based screening approach to objectively filter out candidates who don’t possess the core requirements needed perform on the job. Much of this process can now be done online.
  • Generate discipline around what you will screen before an interview and how you’ll spend valuable interview time. Many assessments are more effectively administered remotely and scored by machine, equipping hiring managers to interview candidates who have already been pre-vetted in ways that can be tough to do in an interview setting. Cognitive ability, for example, is highly correlated to job performance across job categories, but is often harder than we might imagine to assess quickly in a short face-to-face setting.
  • Use a structured interview method to significantly increase the chances that your interview will actually predict on-the-job performance.

2. Too many high-level staff and non-HR employees are involved in hiring

When companies consider their hiring costs, they often only consider direct expenses, such as job board posting fees. In fact, we found that the key cost driver is time, and 85 percent of hiring time is spent by non-HR staff.

In practice, this means that non-HR staff are involved with screening CVs, because functional knowledge is needed for identifying the right skill sets and experience, though CV screening can be a futile task. Business managers often lead the interview process as well, and up to 3 interviews are often conducted.

We’re sometimes asked how business managers can spend less time on the hiring process, and we often provide the following guidance:

  • Define the “must have” requirements that will drive high performance (and by “must have”, we mean a maximum of 3 requirements, not 20).
  • Collaborate on designing an assessment that mimics a key task that a candidate would need to excel at if you hired them (not a theoretical exercise).
  • Agree in advance what will constitute a “good answer” to your interview questions, such that business managers don’t need to be present in each interview round.

3. A high-performing hire is exponentially more valuable than a low performer.

We all know what it feels like when we make an amazing new addition to our team. As soon as they join, we’re often instinctively aware they will have a net positive impact on the company. We wanted to back up that instinct by quantifying the difference high-performing employees make. We found that top-performing employees have a an exponential — not linear — effect on their organisation’s bottom-line, especially in sales or credit roles:

  • A high-performing sales agent can generate around two and a half times the margin of a low performer in the same organisation.
  • For one of the companies consulted, the difference between a high and low performer amounted to a difference of approximately US $30,000 in revenue per agent per year (in a business with sub-$1,000 transaction sizes).
  • High-performing loan officers can generate up to seven times the annual margin of low performers.

These figures show that for growing SMEs, hiring high-performers should be prioritised with great urgency. If this sounds obvious, you may be surprised to know that the vast majority of HR departments are measured based on cost-per-hire or speed-per-hire rather than quality-per-hire.

We recognise that this research isn’t exhaustive, but we hope it will at least begin to point to ways that you can help your organisation hire more effectively, and we would welcome your questions and input.

Download the full report here — Hiring in Kenya: Current Methods, Hidden Costs and the Value of Top Performers — and check out our Business Daily op-ed on the research findings. Want to spread the word? Share your favourite fact from the report on Twitter using #HiringinKenya, and tag us @Shortlisthires!

4 Hiring challenges and opportunities facing Indian companies today

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At Shortlist, I’ve had the chance to get to know dozens of fast-growing companies in India spanning sector and stage — from 6-person startups to a multinational advisory firms — and learn what’s working for them, what’s not, and what hiring challenges they are facing on a day to day basis.

The sheer scale of India’s market is overwhelming. Not only is there a staggering one million people coming into the job market every month, but there is also a lot of turnover — according to LinkedIn, India has the highest percentage of the workforce that is “actively seeking a new job”. Clearly this is an extremely liquid, massive market — but one that also has many frustrating inefficiencies.

These are the top four challenges that I’ve seen companies face when it comes to hiring. If these issues go unaddressed, they could seriously impact economic growth in India. But with every challenge comes an opportunity for improvement, so I’ve also included some potential ways that we can shift our thinking and practices to address these challenges head on.

Challenge #1: Separating serious candidates from the pack

In April, with the new financial year, professional across India gear up for the bonus and increment. Many professionals apply for as many jobs as possible leading up to their review, hoping to get an offer with even a marginally higher salary that they can leverage during negotiations with their current employer. It’s not hard to take this “spray and pray” approach, given that applying to a job typically entails nothing more than uploading your CV to a job board post, hoping that some employer somewhere will see it.

This system is detrimental to hiring practices in India for two reasons. First, it makes it nearly impossible for hiring managers to discern which applicants are genuinely interested in the role, and which have no intention of accepting an offer. It ultimately slows down the entire hiring process and leads to a whole lot of frustration for growing companies.

It also changes the mindset of recruiters. With the assumption that a candidate may not even interested in the job, recruiters find it hard to invest the time in reviewing each application thoroughly, let alone give a thoughtful response to each applicant. This perpetuates a vicious cycle: Candidates are used to employers not responding, so they do the only rational thing and apply everywhere they possibly can.

The opportunity: To separate serious candidates from the pack (or in this case, stack — of CVs), use applications that force candidates to have skin in the game. If a candidate is genuinely interested, they will invest the time to write a cover letter or complete a case study. Assessments like this not only weed out the applicants who aren’t truly interested, but are also much better indicators of ability and fit than a CV alone.

Many top corporates have built their own application portals with a structured system of qualification rounds. Companies like BelongShortlist, and Entelo (in the US) are using social media and other data streams to identify and engage “passive” candidates. Those who engage back consistently and proactively, particularly through multiple rounds of assessments, are most likely to convert into employees.

Challenge #2: Making sense of candidate CVs

There is no standard CV in India. Instead, when reviewing CVs for one job you’ll see everything from a Western-style, one page, achievement-based resume to 20 to 30 pages of everything a candidate has ever done — including primary school achievements! Partly as a consequence of the high volumes of applicants for any opening, candidates will often stuff their CV with as many keywords and buzzwords as possible in hopes of being picked out of a database or catching the eye of a recruiter.

What’s more, many people don’t even write their own CV — there’s a whole business for this here in India! You can walk into any internet cafe in Bombay, give someone your qualifications and target sector and they’ll whip a CV for you. This practice makes it really hard for any differentiating details or personality to shine through on the page.

The opportunity: It’s no wonder that we think the CV is dead! Unfortunately, asking a workforce of 100 million professionals to reformat their CVs will be really tough. But what companies can do is stop relying on CVs in their own hiring processes. Instead, decide on the mandatory qualifications and core competencies that are absolutely necessary for success on the job, and use a standardized method to screen based on these factors.

Challenge #3: Knowing that candidates can do the job before you hire them

Most of the hiring happening in India is experience-based recruiting (“Does the candidate have at least two years’ experience in solar industry?”) rather than competency-based recruitment (“Can the candidate perform the tasks that the job entails?”). Sure, sometimes past experience indicates that you’d be great at a job, but you might be surprised to learn how often it doesn’t match up.

We saw this firsthand during a partnership with an international management consulting company. They were working with a number of recruiters, and as expected, some of the candidates that went through the Shortlist process were also brought to the client by other recruiters. Many of the candidates who had impressive experience were being advanced by the other recruiters, but when they took the Shortlist assessments they didn’t perform as well as others did. Ultimately, we were able to recommend a number of candidates who were hired — but on the basis of how they performed on our suite of assessments that measure demonstrated skill, not just where they went to school or worked.

The opportunity: Lazlo Bock, former Head of People Operation at Google, uses research to show that the single biggest predictor of an employee’s performance in the workplace is the “work sample.” This is to say — the best way to see if someone will be good at the job, is to see them actually do the job!

Sounds obvious, but it’s surprising how often an unstructured 30 minute “chat” with a candidate substitutes for a rigorous technical and capability assessment. Don’t you want your PR Manager to be able to write a good press release? Shouldn’t your Category Manager know how to create a demand forecast? Should you be waiting until the interview to find out?

Competency assessments including case studies or work simulations will increase the likelihood of hiring talent who will be high performers on the job. At my previous role as an Investment Officer at a financial technology venture fund of Accion International, we gave every single applicant a case study before the interview. If they couldn’t write an intelligent analysis comparing a handful of investment opportunities, there was no point in an interview. Today, companies like Mettl and Jombay are helping companies add more objective assessments to the hiring process to increase their hiring efficiency and success rate.

Challenge #4: Willingness to invest in talent and finding the right recruitment partners

This last challenge will be the hardest to tackle, but I think will result in the greatest change for Indian companies in the long run. Across the board, there is a mindset that talent is an afterthought, that hiring is a mere necessity of running a business, not the core of what makes its successful.

One way this manifests itself in outsourcing to any external recruiter who can fill an empty seat as quickly as possible. There are over 20,000 “mom and pop” recruitment agencies in Mumbai alone. The cut-throat commission-based model these agencies work on — one months’ salary if you successfully place someone — creates terrible incentives. Recruiters tend to send their clients the highest priced candidates for a role, not necessarily the ones who are the best fit for a role.

The opportunity: As with any fragmented market, technology and business model innovation will play a big role in consolidating the long-tail of sub-scale recruiters.

In the meantime, we hope that all companies will take a thoughtful approach to their hiring. Carefully consider the mix of processes you build in-house, the human resources you deploy, and the technology and trusted recruiters you bring on. Your in-house team shouldn’t be manually reviewing thousands of resumes — it’s 2017! Plan your hiring in advance — don’t start searching today for someone you needed yesterday. Think about how to incorporate assessments, work samples, and on-site interviews into your process.

And always remember — the lowest cost solution is often not the best choice. Shortlist estimates that closing a mid-level hire can take as many as 70 hours and cost as much as 2.5 lakhs (USD 3,700) in time and fees — and if you make a rushed or sub-optimal choice — you might find yourself having to start over.

We’ve had the privilege of working with dozens of clients who truly value talent. And you can see how it pays off — not just in their awesome team culture and employee retention rates, but also for their bottom line. I hope that more companies in India will turn these hiring challenges into opportunities and enjoy the same benefits for their growing businesses.

Structured interviews

Everyone should be using structured interviews — here’s why

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Interviews are often less predictive of on-the-job performance than we imagine, a problem we wrote about here. Despite their ubiquity, unstructured interviews — where we ask candidates different questions in different sequences that may or may not be tied to job requirements — have been debunked as an effective predictive technique.  The interview process is vital to the hiring process and using structured interviews may be a better approach.

Structured interview 101

Decades of research tells us that using a “structured interview” is more than twice as effective than its unstructured counterpart in predicting on-the-job performance, and even more so when combined with competency-based assessments. The evidence is clear, and yet it’s extremely rare to see structured interviews employed in practice.

The idea behind a structured interview is underpinned by the objective of keeping the interviewer focused on questions that can predict performance and reducing the variance of scoring that exists when different interviewers prioritise different attributes in a candidate. They are best suited to interviews for junior and mid-level roles involving multiple interviewers.

Anatomy of a structured interview

  • Candidates are asked the same questions, in the same order, by every interviewer.
  • Questions are explicitly linked to key competencies required to do the job.
  • A standard rating scale is used by interviewers to grade candidate answers.
  • Interviewers agree in advance what they are looking for in a good answer.

When used correctly, the structured interview reduces the risk of bias affecting the interview outcome, increases consistency in ranking candidates, and minimises the interview time.

The key to using this concept effectively is crafting predictive questions and understanding that you’ll only have time to ask a few. Forcing ourselves to prioritise which two or three competencies actually drive 80 percent of the performance in a given role is a good place to start.

Reducing the time we spend on the interview process

We often hear hesitancy to adopt structured interviews because they can be perceived to take more time. “We have to hire 50 people this month. We don’t have time to implement a new structure,” is a common justification. Some may be surprised to learn that adopting a structured interview process actually reduces average interviewing time, particularly when more than one interviewer is involved. This is achieved both by reducing the pre-interview preparation period (because the questions are already prepared and optimized for an efficient interview) and by reducing the time to make a final hiring decision (because interviewers are clear about what they’re looking for).

Pathway to building a predictive question bank

Ultimately, building discipline around data collection throughout the interview process will help move beyond improving just our “hire rate” to something far more valuable: improving the rate at which high performers are selected. Hasty bullets written in our notebooks from 6 months ago are all but impossible to link to the ultimate performance of a candidate down the line (“What did we ask her again?”). If we have consistent interview data — meaning which questions were asked and what the responses were — we can baseline those questions with their teams to identify which interview questions and corresponding answers are most predictive of identifying high performers. We’ll also be able to pinpoint which questions are ultimately uncorrelated and can be dropped in the future.

Why are structured interviews so rarely used?

The ultimate benefits of a structured interview process can take months to materialise. Responsibilities are spread across multiple people on the team. Half a year may have passed by the time the candidate has been onboarded and we’ve had a chance to evaluate performance. The original interview seems like a distant memory at this point. Taking a decision to adopt a structured interview process will probably require a push from senior management along with commitment to enforce the practice.

We often have a related challenge of convincing hiring manager colleagues to change their interviewing practices, particularly when our colleagues don’t necessarily perceive interviewing to be a process in need of fixing in the first place.

At Shortlist, we have worked with clients ranging from start-ups to large multinationals. We also design competency-based assessments to further enhance screening outcomes before a candidate even reaches the interview stage.

Not all organisations will transition off of the unstructured interview as a screening tool, but the evidence to do so is clear. It’s time to implement a better way to interview.

About Shortlist Insights

Shortlist Insights helps companies build capacity to improve how they recruit and manage talent. We combine best practices from industry experts, research, and our experience to deliver practical and tested solutions and thought leadership. Ultimately, we help our clients build a competitive people advantage.

Related: Unstructured Interviews: Less Predictive Than We Think