Popular belief states that you should hold out until you find a perfect fit to fill your open position. Especially at a startup. Nobody has the time to train someone. Not to mention that a cultural misfit can be toxic. A good manager has to hold out for the spot-on candidate, right?
My completely unsubstantiated theory is that people are simply risk-mitigating in the guise of appearing like an uncompromising manager. Hiring someone without the picture-perfect background brings risk along with it. What if they don’t work out? How will that reflect on me? How will it affect what we are trying to accomplish? What will our investors or our board think? In fact, will it affect which investors will even talk to us if they don’t see the correct credentials on an org chart?
The problem with all this risk-mitigation is its long-term negative impact. It’s backed people into a very teeny tiny box of acceptability, and has atrophied a hiring manager’s muscle to assess potential. It deteriorates opportunity for your team to mentor and lead others more junior to them. It decreases diversity. And all of these factors roll up into a lack of psychological safety, increased turnover and a weakened culture.
Let me tell you two stories from my recruiting agency days:
- There was a certain founder of a certain LA-based social media company that wanted us to help him find mobile engineers. He would not consider any candidate that did not graduate from 1 of 5 specific universities (none of them in LA — not quite good enough), and they had to have a 3.95 GPA or higher.
- Someone referred a software engineer to me. After vetting him out myself, I submitted him to two clients. Both passed on him — didn’t even speak to him, just passed on the resume — and essentially said “not good enough, can you just find me someone out of Google?”. Guess who ended up hiring the guy? Yep.
Granted, if someone has a 3.95 out of a top tier university, or if they worked at Google, they are probably good. However, what about the jillions of other candidates that are equally good that didn’t/couldn’t attend one of those 5 universities — perhaps they couldn’t afford it? Or what about the person that was smart enough to work at Google, but couldn’t because they had family obligations which prevented them from moving to the Silicon Valley?
Most hiring managers don’t know how to hire for potential, or they just don’t want to spend the time required, so they just avoid it. It’s easier and less risky to let someone else (a University or The Google) assess potential for you. But if you learn to do it yourself, you’ll be able to back yourself right back out of that teeny tiny perfection corner, yielding a slew of benefits.
· You’ll open up your candidate pool significantly. The market has been high demand/low supply for years with no letup in sight. It can take months to fill a position. Honing your ability to spot potential gives you a huge competitive advantage over other companies unable or unwilling to do so. A study by the Society for Human Resource Management (SHRM) states that the average cost to hire an employee is $4,129, with around 42 days to fill a position. Anything you can do to reduce the number of days to fill a position will reduce that hit to your bottom line.
· It allows you to build in career development for your prized senior staff. Many would love the chance to mentor and lead others. It also allows them to train staff using the more mundane bits of work, allowing them to focus on more meaty projects. This career development path and opportunity to focus on the most interesting work will increase retention. And trust me, you don’t want your best people walking out the door. If you’re replacing someone instead of filling a new position, stakes get even higher to fill the role. Research by SHRM states that it takes up to 50–60% of an employee’s annual salary to find a direct replacement. Conservatively, that means for a $100,000 employee, it typically costs $50,000 to replace that person.
· Cross-training is a natural by-product of mentoring. You never want any single person to retain 100% of the knowledge of anything in your company.
· You’re inherently opening the door to more diversity by taking down the narrowing effect of hiring people who bring particular credentials to the table. This HBR article shows you why this is a good thing.
· Hiring managers that can spot potential don’t have to be as rigid about ensuring a candidate has the exact right amount of the exact right acronyms. By chilling out a bit on the hard skills, you can put more emphasis on ensuring the person is smart, capable and melds with your culture. You can teach someone how to code in a new language. You can’t teach them to share your core values.
· Remember all those fears I listed up top? If those fears rule your hiring, it’s a sign that your company lacks psychological safety. Giving yourself and your team the freedom to fail, tell their truth and be human yields much more innovation and success. It also plays a big part in employee retention.
So how do you hire for potential?
· According to this HBR article, the hallmarks of potential are:
o Curiosity — can this person demonstrate how they seek out new experiences, information and knowledge? Are they resourceful?
o Insight — can they give examples of how they intake and assess information and data?
o Engagement — are they able to communicate with presence, listen, connect, persuade?
o Determination — can they provide examples of when they have had to push through to a goal despite obstacles? How have they bounced back from adversity in the past?
· On a more tactical level, do the following: Create a method to assess the person’s current abilities with the hard skills of the role. If it’s for a Software Engineering role, do a test to assess core coding discipline, understanding of logic, etc. Have it be less about if they know how to code a very specific thing in a very specific language, and more about how clean their code is, if they use the logic to solve the problem in the most efficient way, etc. If it’s for a Marketing role, have them describe how they might approach developing a marketing plan for a new product, versus having them show you a marketing plan they did in the past for a unicorn product. If it’s a PR role, give them a situation to write a PR release for so you can see how they think and write. You get the picture.
· Make sure you have a solid approach in place for assessing culture/values alignment. Even if the hard skills are not 100% walking in the door, the person should be someone who will enhance your culture.
The benefits of this approach are significant and far-reaching. It’s not just going to get this one position filled for you, it will positively impact your culture, feelings of psychological safety, overall career development, your diversity and its inherent benefits, as well as keeping your turnover rates lower.