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Make Selection
Your Top
Priority

The selection process is the key to your success and to the success of your company. Nothing is more important to your future than your ability to select the right people to work with you to make that future a reality. A mistake in selection, in itself, can lead to underachievement and failure in a critical area and often to the failure of the entire organization.

The first Law of Management concerns selection. Fully 95 percent of the success of any enterprise is determined by the people chosen to work in that enterprise in the first place. If you get this right, everything else will usually work out all right as well. If you select the wrong people, nothing else will work.

The rule is that if you select in haste, you will repent at leisure. Many of your worst problems in business will come from having hired a person too quickly. Once the person has started the job and turns out to be inappropriate, you then have to spend considerable time, energy, and emotion justifying your decision and dealing with the difficulties of having the wrong person in place.

One of the rules for good hiring is this: “Hire slowly and fire fast.” Take your time to make the right decision prior to hiring in the first place. But if it becomes clear that you have made a mistake, move quickly to reassign or get rid of the person before he or she does any more harm.

I have hired someone on a Monday and fired him on Tuesday, as soon as it became clear that I had made a mistake. Remember, people always look the very best during the first job interview. They will say or promise almost anything to get hired in the first place, but as soon as you give them an actual job to do, they often turn out to be very different from what you expected or from what they led you to expect.

The very best time to fire a person is the first time the thought crosses your mind. If you have made a poor selection decision, don’t compound the mistake by keeping the wrong person in that job. Have the courage and common sense to admit that you have made a mistake, correct the mistake, and get on with the business of running an efficient, effective workforce.

Hiring is an art. It cannot be rushed. It requires focus, concentration, and unbroken thought. You must take your time if you really want to hire well. All personnel decisions require a good deal of reflection before you make them. Fast hiring decisions usually turn out to be wrong hiring decisions.

A successful manager, a man with a great reputation for having hired many of the top people in his company, told me that he had a simple rule for hiring anyone: Once he had decided upon the candidate, he waited thirty days before he made an offer. He found that the very act of delaying a hiring decision made it a vastly better decision when he finally made it.

This might be a totally inappropriate strategy for you, or for a job candidate, in a dynamic marketplace. Nonetheless, the basic principle of going slow whenever you can is solid and irrefutable. It will greatly increase your overall success rate in hiring.

As a manager, your natural tendency is to hire a person as a solution to a problem, to fill a hole in the lineup, or to do a job that suddenly needs to be done. This is like grabbing a bucket of water and throwing it on a fire. Sometimes, however, if you are not careful, the bucket can turn out to be full of gasoline, and the situation you create can be worse than the situation you are trying to correct.

Ask yourself, honestly, have you ever hired a person quickly with little thought? How often have you had problems as a result? There is nothing wrong with making a mistake as long as you learn from the mistake and do not repeat it. It is true that occasionally you will make a good quick hiring decision, and it will work out well. But this is like a miracle, and as Peter Drucker once wrote, “It is not that miracles don’t happen; it is just that you cannot depend upon them.”

Poor selection is very expensive. Experts in the field of personnel placement estimate that a wrong hire costs a company three to six times a person’s annual compensation. This means that if you hire a person for $50,000 a year and the person does not work out, the overall cost to you and your company can be between $150,000 and $300,000.

What are these costs? First of all, there is your lost time, the time that you spend interviewing, hiring, and training the person to get him or her up to speed. There is also the lost time of all the other people who are involved in the hiring process, both inside and outside your organization. When you calculate the hourly rates of these people and add the costs of the work not getting done while the wrong person is being selected, trained, placed, managed, supervised, and eventually fired—with all the attendant costs of separating him or her from the company—the direct and indirect costs can be heartbreaking.

Second, there is your lost money, the actual cost of the salary, benefits, and training expenses of the person who eventually doesn’t work out. You may even have considerable costs for advertising or placement fees to an outside agency. All this money is wasted in that your company receives no return on investment in terms of actual work performed and results generated. The money is gone forever.

Finally, there is your lost productivity while you are busy finding a replacement for the person whom you shouldn’t have hired in the first place. In addition, your own personal time, emotion, and energy have been wasted on an activity that actually has had a detrimental effect on your company.

There is also the lost time and productivity of the various people in your organization who get together and talk about the mis-hire. They rehash what happened and feed the rumor mill. Often, they become demoralized when they see people being hired and fired around them and wonder if they might be next. Their productivity suffers as a result.

Companies with high levels of turnover always underperform their better-managed competitors. In fact, high levels of staff turnover as the result of poor hiring or poor management of human resources can be fatal to a company. The excessive costs and accompanying confusion and inefficiencies can drive the company into bankruptcy.

The very best companies and the best managers have the best selection processes. This not only saves them a good deal of time and money in personnel costs, but it creates a reputation for them in the marketplace as being good places to work, making it easier for them to attract more and better candidates in the first place.

It therefore behooves you to think carefully before you bring a new person on board. Sometimes the best hiring decision you ever make is the one you decide not to make in the first place.