HR

why good employees quit

Why do good employees quit?

1000 666 Mita Mandawker

Losing a star employee can feel devastating (no matter the size and scale of your company). So it’s not surprising there’s a plethora of research on why good employees quit their job and how to mitigate that outcome. Many say that people don’t quit a job, they quit a boss, but as I dug further into the research, I found it’s a lot more complicated than that…

In particular, Facebook’s internal research about why good employees quit their job at that company, recently published in Harvard Business Review, tells a really interesting story about how to lose, and keep, great employees.

Some key takeaways on why good employees quit Facebook:

Good employees quit their job at Facebook for a few main reasons:

  • The employee no longer enjoyed their job
  • Their strengths weren’t being used
  • They weren’t growing in their career

On the flip side, this means that managers can retain great employees by customizing experiences for their people, including:

  • Enabling team members to do the work they enjoy most
  • Helping team members play to their strengths
  • Carving a path for career development that accommodates personal priorities

What does this look like in the day to day?

It’s things like making sure you know whether a top individual performer on your team actually wants to become a manager, and if they don’t, thinking through how their role and responsibilities can grow in other ways.

I’ll close by noting that that most of the research about why good employees quit – or employee turnover in general – has focused on the United States and Europe. However, at Shortlist, we recently conducted a survey with almost 6,000 Kenyan jobseekers which touched on these topics.

We found that the two most important things jobseekers are looking for in a new opportunity are (1) career growth (69.2% of respondents) and (2) alignment with company mission (14.4% of respondents). When you contrast this with those who stated the most important things were salary (only 8.5% of respondents) and stability (only 4.2% of respondents) — clearly, jobseekers are looking for a lot more than your standard 9-to-5!

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Related: Happier Workplaces: Four Essential Ingredients for Building Them

paradox of choice

When Deciding Is Hard: The Modern Recruiter’s Paradox of Choice

1200 900 Paul Breloff

When Barry Schwartz first wrote and spoke about the “paradox of choice” in the early 2000s, he was grappling with the cute problems of an analog world, like how to sort through the varieties of jeans at a Gap, or how to choose among the bottles of olive oil at a supermarket. I wonder what he makes of our modern digital cornucopia of options and decisions, of all the choices beamed directly to our computer screens available for one-touch purchase. If he thought he had it tough then…

What is the paradox of choice?

Quick reminder: Schwartz’s idea is that, paradoxically, more choice is often worse for us, not better. It seems counter-intuitive — we like to be in control, we like it our way, right away, so the more options the better, right? Wrong.

Research continues to show that beyond some minimum threshold of optionality, more choice leads to trouble in three ways:

  1. Too much choice leads to paralysis, not liberation, as we try in vain to sort through options and make the “best” decision
  2. Too much choice leaves us less satisfied with our decision (when we can actually make one) because we’re confronted with a bewildering array of opportunity costs in the paths-not-taken
  3. Too much choice sometimes even leads us to make objectively worse decisions, because our brains grasp onto faulty heuristics to guide us through the data and variables.

The reality is, deciding is hard! Deciding requires cognitive effort, of which we have limited reserves. Ask Barack Obama, who as President of the United States was charged with making hundreds of critical decisions every day, and wisely found ways to reduce non-essential decision-making to a bare minimum. As he told Michael Lewis, he limited sartorial hemming and hawing to preserve energy: “You’ll see I wear only gray or blue suits…I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.”

How does the paradox of choice effect recruiting?

So, imagine the double-edged sword of the modern recruitment marketplace. Job boards and social media have succeeded in aggregating jobs and job-seekers so that candidates are inundated with hundreds of what-might-have-beens and the-grass-might-be-greeners. And now, employers can often generate candidate pools into the thousands. The thousands! For a split second, this could sound like a recruiter’s utopia — and then the paradox of choice is front and center. The reality of stacks and stacks of CVs sinks in and we’re reminded of the scientific reality that this will almost certainly lead to a sense of paralysis, dissatisfaction, and poor decision-making.

Sure, you say, reviewing a thousand resumes would suck and might lead to a creeping dissatisfaction with whomever one ends up choosing. But does this proliferation of options actually lead to worse decisions?

More decisions = worse decisions

I’d argue yes, in most cases. When a recruiter or hiring manager is confronted with a thousand resumes, she or he must figure out a quick way to make sense of the pile, a strategy to quickly screen. Unfortunately, the most common strategy to triage a stack of resumes is to look for markers of familiarity, a thought process that sounds like, “Do I recognize the school names, do I recognize the company names, does this person seem like ‘us’?” Unfortunately, biases of this sort (which are often operating implicitly, not consciously) lead us to enshrine pedigree over ability and entrenches like-hiring-like, rather than diversity.

What can you do to simplify hiring choices?

At Shortlist, we’re hoping that our automated approach to screening big candidate pools will remove a large part of the bias creep and decision fatigue that hiring managers face as they grapple with the paradox of choice. Here are a few simple steps to reduce the number of choices you face on a daily basis, and improve your satisfaction with those decisions:

1. Establish upfront screening filters

For most positions, there are certain factors that are necessary to function in the role — things like speaking a local language, having a certain salary range or being willing to relocate. By pinpointing and filtering for these basic must-haves, you significantly cut down on your number of options to consider for a role, and save yourself the time of getting to know a candidate who ultimately couldn’t accept an offer or succeed on the job. We use an automated chatbot that asks candidates questions regarding basic fit (location, salary range, etc.). If they don’t fit the must-haves, we don’t advance them through to the next round.

2. Use competency-based assessments to identify top performers

Whenever possible, test applicants with competency-based assessments or case studies instead of relying on CVs and unstructured interviews to make hiring decisions. Generating data points on performance will help you objectively rank a long list of candidates and ease the stress of making choices.

3. Present decision-makers with essential information only

Whether you’re a recruiter sharing a list of candidates with a client, or a talent acquisition head who needs the hiring manager to make a decision, chances are at some point in the recruiting process you will be sharing information on candidates with others. Think about how much information you need to share on each candidate to help them make smart decisions without the stress. At Shortlist, rather than include every one of the hundreds of data points we collect on candidates, we share the important stuff while holding enough back to create a subtle sense of “magic” when the candidate who shows up for an interview is just right.

This article originally ran on People Matters.

4 Hiring challenges and opportunities facing Indian companies today

800 553 Mita Mandawker

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

1080 565 Simon Desjardins

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

unstructured interviews

Unstructured Interviews: Less Predictive Than We Think

1080 651 Simon Desjardins

Interviewing effectively is surprisingly tough. It’s a process that sometimes seems straightforward and yet often leaves us feeling like we haven’t quite gotten the clarity we were hoping for out of an hour-long session, or that we’ve simply made a gut decision. The main reason for this feeling lies in fact that many people use unstructured interviews, which makes it much harder to reach a conclusion about whether the candidate would actually perform well or not.

In this series, we will explore some central challenges we face in the interview process, and highlight best practices and tools to make immediate improvements.

The statistics about interviews are both counterintuitive and somewhat alarming: the chances that unstructured interviews will accurately predict a candidate’s performance is less than 25 percent. You’d actually be better off flipping a coin, and would have saved several hours in the process!

Anatomy of unstructured interviews

  • Candidates are asked different questions by each interviewer.
  • Questions are not necessarily linked to key competencies required to do the job.
  • Candidates are not assessed using a standardized rating scale.
  • Interviewers haven’t aligned on acceptable answers beforehand.

With dozens of studies across multiple geographies and timelines showing them to be one of the worst ways to predict on-the-job performance, the evidence against using unstructured interviews is overwhelming. Yet we continue to rely on them almost exclusively to make hiring decisions. What’s going on?

Limiting the effects of bias

Bias plays a huge role in how we rate candidates in an interview setting. Humans are naturally and strongly predispositioned to favour people who are like them, which is a hazard when our objective is to build diversity on our teams.

Compounding this problem is our susceptibility to “first impression” bias, where we consistently end up asking easier questions of people who form a strong first impression, and harder questions for those who don’t. In their now-famous study, Tricia Pricket and Neha Gada-Jain showed how snap judgements made in the first 10 seconds of an interview could predict the outcome of that interview.

Mere awareness of these biases does little to counteract them, even for experienced interviewers. Asking candidates to complete a competency-based assessment process before the candidate reaches the interview stage adds a layer of objectivity to the screening process and can help put interview results in context.

Linking interview questions to competency requirements

Unlike unstructured interviews, great interviews start with the interviewers aligning on what competencies and other requirements will actually drive performance in a given role. It may sound obvious, yet we often see a majority of an interview being spent asking questions without a clear competency in mind.

Brain teasers, for example, are a perennial favourite, though they have been shown (most conclusively by Google’s HR team) to have no correlation to performance. By a similar token, academic scores (and by extension — questions about them) have equally little bearing as predictors of performance, unless we’re hiring people immediately after they graduate.

Asking questions that actually force a candidate to reveal a key trait can be risky without preparation and thought. For instance, if we wanted to understand a candidate’s “motivation to join,” we might be tempted to ask the basic question, “Why do you want to join our company?” This question, however, is easily answered by a clever candidate who has done their research. A less obvious but more revealing question, such as “What preparation did you do in the time between when this interview was scheduled and today?” might give us a much more meaningful data point on the same subject.

Interviews and the Stanford prison experiment

Back in 1971, Stanford University psychologist Philip Zimbardo led a set of experiments that changed what we know about human behaviour. Zimbardo arbitrarily assigned participants to play the role of “prisoner” and “guard” in a role play exercise, and the inhumane behavior of the “guards” revealed the extreme psychological effects of perceived power. The results were replicated many times across multiple countries and cultures.

Interview rooms aren’t prison cells, of course, though much of what was learned in those studies applies to this context. Given that employers have a job to offer, we sometimes assume a position of authority in relation to the candidate, and act accordingly, without realising it. Imagine, however, that we’re interviewing a top performer who has multiple employment options. In this situation, we’re being interviewed as much as we’re interviewing. Leaving five minutes at the end to answer a candidate’s questions won’t be enough to properly address concerns and communicate why the candidate should join us.

Interviews driving improved performance

Admittedly, interviews tend to be high stakes environments for both parties. We’re under pressure to make the perfect hire. The candidate is nervous. Skepticism, hope, and bias are at risk of permeating every exchange. If you leave time to “sell” the candidate at the end, we’re down to 40 minutes at most to ask five to eight questions. Given the exponential impact that high performers have on organisations, these 40 minutes are crucial.

Putting more thought and structure to that time will separate you from the vast majority of other hiring companies, including your competitors how are using unstructured interviews.

If unstructured interviews don’t work, then what’s the answer? In the next article in this series, we outline the basics of the “structured interview” and when combined with competency-based assessments, will save time and significantly improve the outcomes of the interview process.

About Shortlist Advisory

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: Everyone should be using structured interviews — here’s why