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Hiring Case Study: Resumes are a waste here’s what’s better

As crass as the above image is it hits the nail right on the head. At the end of the day as business owners we must take responsibility for everything that happens within our business. I personally was sick and tired of hiring the wrong people for mine. What I’m about to show you has saved me thousands of dollars in outsourcing to the wrong outsourcers or hiring the wrong employees as well as countless hours of frustration, resentment and basically everything that makes me procrastinate and hate what I do.

Have you ever hired someone to build you a landing page or a website? And instead of making your life easier it just made it harder? and instead of saving you time and money it made things more expensive and consumed more of your valuable time? This used to happen to me all the time. Keep reading on as I show you the EXACT processes and systems I developed for screening and hiring employees till it reached the point of minimum effort and maximum gain (Typically called the Pareto principle but you get the idea).

The most commonly used methods to screen applicants when recruiting and hiring are also the most useless yet somehow most companies persist in this idiotic behavior.

You don’t need to be like them, you can improve your hiring results and decrease your time spent extremely easily through some simple changes to your process.

Today we’ll explore one of them – the alternative to resumes.

I should mention in advance this particular technique is designed for low and medium skilled positions.  Although it can in theory be applied to high skill and executive positions the application there serves a different purpose.

We’ve used this method successfully to screen:

  • Labourers
  • Sales people
  • Engineers (electrical, mechanical, geotechnical, etc.)
  • Trades people (welders, machinists, mechanics, etc.)
  • Technical people (computer programmers, technicians, etc.)
  • Many others

 

You can grab our whole step by step process with examples by downloading our recruiting process templates

 

Background – The Screening Problem

bad hire

I owned a recruiting company for 7 years we screened tens of thousands of applicants, often we’d get literally hundreds applying for a single job.  There’d also be times where we wanted to go back into our database to find someone who fit what we were looking for…how do you do that when you’ve got literally tens of thousands to weed through?

This was an exhausting process to say the least.

Let me do some quick math for you.

If you sit down and review resumes thoroughly say they are on average 2 pages and you read 1 page per minute that’s 2 minutes per resume to read it over.  Frankly, some are longer and you probably won’t be giving much attention to detail but consider what this does to your hiring costs.

2 minutes per resume multiplied by say 200 resumes is 400 minutes of time…just screening resumes.  That’s over 6 hours!  And that’s without accounting for distractions, etc.

If your time or the time of the person screening is worth $50/hr (it’s almost certainly more by the time you consider operational overhead, etc.) that’s over $300 you’ve spent and for what?  You’re not going to remember most of those, at best you’ve got a very long short list.

What’s the alternative?

Most people develop biases that allow them to screen resumes faster.  I’d train our staff to screen a resume in about 20 seconds each looking for very specific things based on the position.

What’s the problem?

The biases are almost always at least partially wrong, things like “do they have a university degree” becomes a way to screen because you’ve got to do something to narrow the candidate list even if a degree has absolutely nothing to do with whether they’ll make a good hire.

The other solution involves technology.

Software can parse the resumes and make them searchable, decreasing how much time you spend opening files and reading through information.

The problem?  The resume itself is the problem!  It doesn’t matter if you can parse it, it rarely includes the information necessary to properly screen the person for the next step.  Search works based on keywords and a great applicant might through no fault of their own not use the keyword you’re searching for.

Why?  Because they don’t know what you’re looking for.  The candidate has created a form resume designed to be submitted to dozens of possible jobs so it’s generally generic and often includes irrelevant information while missing key points that matter to you.

What often ends up happening is whoever is screening the resumes doesn’t look through all the applicants but just settles for one near the top meaning they could be missing someone way better but because they don’t have the time to go through them all they’ll never know.

I’m as guilty of this as anyone and it felt bad to know that the squeaky wheel would get the grease or someone really good was missing out because they weren’t as aggressive in following up.

 

Resumes are Irrelevant

 

There are some voodoo consultants who claim to have magical powers to determine candidate fit from resumes.  It’s rubbish.  Complete and utter nonsense.  Here’s why:

  1. Often resumes aren’t even written by the person applying for a job they might have used a template or gone to a third party resume writing service so what you think you’re gleaning from that resume might have little to do with them.

 

  1. Often the best candidates have poor resumes because they aren’t used to having to write resumes because they are busy doing great work, they are throwing one together quickly to apply when they are otherwise busy. By contrast some of the worst candidates are professional job seekers who might have great resumes.

 

  1. A good resume is designed to sell you not give you objective information about whether the candidate is a good hire so it’s at worst lies and at best highly filtered data, neither of which tells you accurately whether the person is a good candidate or not.

We tried all kinds of fancy voodoo, language profiling, NLP writing analysis, learning for different personality patterns in the writing, etc.  We consistently got the same result…frustration as what the resume said or how it was written failed to correspond to on the job performance.

Think a spelling mistake or grammatical error means the person is a poor candidate?  First, in the real world a spelling or grammatical error is rarely high impact, second, anyone can make a mistake and it doesn’t prove anything as much as you’d like to think it does or should.

These are the kinds of biases people form reading resumes.

Bottom line isn’t to bash on resumes it’s to point out that they are a waste of time…quit wasting your time.  You’re literally throwing money down the drain unnecessarily.

 

The Disqualification Process

The goal of the resume or what we’ll call the application process isn’t to select someone to hire it’s to decide who not to move to the next step in the process.

Ideally, this step helps you build an easy to reference database and gather some market data.

The way to do this is to determine your “disqualifiers”, which are objective in nature and then screen out anyone who doesn’t meet them as quickly as possible.

Please note, these disqualifiers should be data driven, meaning there’s no interpretation involved.  A huge part of the problem with resumes is they are so open to interpretation that you can out think yourself.  You want to eliminate thought from the process and make it robotic.

What does this accomplish?

It means you can outsource this step for $2/hr. saving thousands.  It means it can be done extremely quickly saving thousands.  And it means you can make better quality decisions, which will likewise save you thousands.

 

If you’d like you can download our disqualification templates here.

 

The Resume Alternative

We generally refer to the resume alternative as a disqualification email simply because we deliver it by email but it could just as easily be an application form you have applicants fill out on your website or in person when applying (less practical today).

What you’re aiming to do here is to reduce your cost per hire and decreasing the time to hire while simultaneously increasing your quality of hire.

Bottom line your objective here is to improve your hiring ROI.  Remember everyone you hire should be making you money not costing you money and the less they cost you including the cost to hire and manage them the better off you are.  Literally, hiring can be a huge competitive advantage.

When we started doing this it felt so much better.  It’s more efficient, it’s clearer, and more organized for the future.

Process wise what you’ll do is have everyone who applies fill out this form you’ll create for them.  Literally you’ll never read an email they send or look at a resume those are both a waste of time.  On your website or in your ads you’ll encourage them to fill out the appropriate form and if they send you a resume you’ll reply with this instead.

It’s highly efficient and actually will allow you to give better service to the candidates, which they appreciate.

Literally, for the initial point of contact you can use an auto-responder or templated email.

Download a sample in our copy and paste recruiting template pack here.

 

Disqualification Form

Really it’s very simple.  You’re going to ask them for every objective piece of information you’re looking for rather than relying on them to guess what you need to know.

You’re going to remove emotion from the screening process by standardizing how you gather the information.

The key here is to ask for OBJECTIVE information.

In other words, you’ll never ask something like “are you a hard worker?” or “are you a team player?”

You’ll ask about whether they have particular certifications and ask them to provide a copy or a certification #.

You’ll ask logistical questions like what schedule they are available to work.

You’ll ask about experience only in an objective manner like “please name 3 projects of such and such type that you’ve worked on” or “please list the heavy equipment you’ve operated”.

The idea here isn’t to provide perfect screening on the quality of how well they’ve done it only to establish with relative accuracy that they have done it so it’s worth your time to screen further.

These questions should be tailored to the individual position you’re hiring for and not be generic though of course you’ll have some overlap between positions.  What this should also do is match

What you’ll end up with is a form you can fill out that corresponds to the position profile you created so you can see at a glance the quality of match.  It all works perfectly together.

To get a copy of the position profile, disqualification form template, etc. download our copy & paste recruiting template swipe file here.

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When The Cat Is Away The Mice Will Go Play

There is a holy grail of business pursued by many who don’t love what they do and that is the idea of a business that runs without you.  Arguably, a good business, a strong business, should run without the owner to a certain extent.  It’s possible to achieve this feat in even small businesses if you have well trained staff, strong systems and can easily keep an eye on details.  This is almost never truly hands off in the absolute abdication sense but can certainly become low maintenance requiring no more than  one to four hours per week to maintain.  Ironically, there’s a bit of a sweet spot it seems in most businesses where this can be achieved beyond which more energy is required and below which more energy is required.  However, what you’ll learn is it is never so straight forward on a sustainable basis.

Energy input is required for growth, you can either put it in yourself or you can have someone else put it in, but one way or another it is required and if it’s to be to your benefit you’d better provide at least enough energy to direct it.  This brings up a very important principle, not so much a rule because it isn’t always true, but it’s a generally wise assumption.  People will tend to act in their self-interest.  People also tend to fall into routine.  What does this mean for you?

If you ignore your business one of two things will tend to occur, perhaps not immediately, perhaps not universally, but in general it will take place.  Either people will get lazy doing what they can get by doing as opposed to pushing the boundaries to do better, or they will take advantage of what is given to them to benefit themselves.  Three real examples from businesses I’ve owned:

  1. Staff were given a list of duties to complete daily and standards to live up to, certain amounts of work they were expected to get done by the end of each shift, however, in the absence of an on-site manager staying on top of what was done and what wasn’t done they started to slip, they’d leave something for the next shift, they would fail to get it all done, they’d let the standards of how well they were doing one thing or another slip, all of which cost us money

 

  1. Staff would clock themselves in for additional hours, not that they were lying about being present but the company really didn’t need them if everyone was doing their job efficiently,the business had no policy to pay them for those hours, they weren’t authorized to come in during those hours and it would cost the company money for them to be there for extra non-revenue generating hours

 

  1. Some staff would steal clients for their own private work outside the company taking them for on the side services competitive with what the business was offering saying “the prices will be lower”

These are startling examples from just one company of the kinds of things that occur when you’ve got absentee management, when there isn’t someone actively in place watching the numbers, the staff, the performance constantly.  It’s sometimes under appreciated by small business owners just how much difference being on top of the details constantly can make in a business.  In the case of extra staff hours I audited the time sheets and discovered inefficiencies due in part to staff spending extra time beyond what they should be and partially due to inefficient scheduling was adding an additional 20% to payroll costs, all of which would be pure profit with the right management.  In the case of staff who slacked off the estimate was somewhere around an additional 5-10% boost in revenue if the staff were only diligent.  These are small examples but they are also short term examples, factors such as these erode and grow building momentum until they eat a company, a $10 000 monthly profit can quickly turn into a loss if not carefully monitored.

There’s an expression that “people respect what you inspect”.  It doesn’t necessarily have to be you doing the inspection but there is an enormous cost to not remaining on top of the numbers and the people, not constantly optimizing and tweaking.  When you are absent people behave differently, they think and feel differently, they start talking in ways you probably won’t like.

Bottom line, for any business to succeed at a high level it needs effective management, whether you or someone else make sure there’s a manager in place who takes ownership, has the will and the skill to make the organization thrive.

If you’ve got business management or growth or any other questions we’d love to hear from you.  Contact us with your questions.

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Are Business Coaches a Good Idea?

Today we’re going to discuss an interesting topic, are business coaches a good idea?  The discussion is prompted by a comment a business owner recently gave to someone advocating business coaching in response to “what was he doing to keep more money every month to build wealth?”  His response was “I now keep $4000 each month rather than giving it to a business coach”.  It’s an interesting point is a business coach just another expense or does he/she provide real meaningful value?

Generally, the people talking about this stuff are the coaches, authors, speakers, consultants, etc. those who have an invested interest in you paying for their services and that of their colleagues.  On the other hand it can’t be denied that top athletes all have coaches is that just a sports phenomenon?  Or have the sports coaches pulled the wool over the eyes of the athletic community?  It’s also noteworthy that major business leaders (former Google CEO Eric Schmidt is one of the most prominent examples of someone who publically advocated it as one of the best pieces of advice for a business leader).  Then again maybe that applies for high level business leaders and athletes and not those starting out?

It’s certainly undeniable that coaching can be a significant expense for a small business owner where $1000-$10 000 per month can make a huge difference.  By contrast for a company like Google affording a coach is really a non-issue it’s more a question of the leader’s time and focus than the actual monetary cost and the gain can be phenomenal because it’s leveraged over a much larger organization.  But is this an argument against coaching in low level business?

The simple answer is “it depends” on both the coach and the person being coached.  If you’re not coachable then having a coach is a waste of money.  There are also a lot of crap coaches out there and business tends to suffer a higher percentage of them than sports.  What’s the problem?  The process.  If you look at a professional athlete the way they are coached is the coach runs them through drills over and over, observes what they are doing and corrects.  In the case of business coaches most tend to operate by meeting with you every so often, sitting down to talk about the business generally with no hard data such as actual numbers and ask you questions to try to get you to do something different.  Not very surprising when the process is less effective than it is in athletics since sports coaches are generally training you the way you actually get better at things, business coaches are often like a friend discussing business issues with you, not that this can’t be effective but it tends to be less effective.

If you’ve got a great coach the coach can be worth their cost many times over.  Why?  Because it can drastically shortcut your learning, which is the most costly and difficult part of success for most people.

So how do you select a coach that’s going to be worthwhile?  Focus on someone who has already solved (either themselves or with someone else) the problems you are facing, someone who can tell you “hey this is what you need to do right now and here’s how to do it”.  That kind of insight is immeasurably valuable.  Want to rank on Google?  You better have someone who can look at your webpage and tell you specifically the exact fields that need to be changed, what they need to be changed to, and how.

Next, if you’re going to get a coach get someone who will delve right into the metrics of the company with you and provide those metrics.  Someone who expects to sit in a boardroom across the country somewhere spilling out advice without direct information about your business isn’t the right person.  If you’ve got a problem with staff you want someone who can spend time in the environment with the staff and make an assessment.  If they are going to coach you on how to manage and lead those staff members they need to be able to watch you do it not just hear about what you think happened but observe it directly.

Of course all of this means nothing if they aren’t going to hold you accountable and you’re not going to trust them and do what they say so make sure you’re coachable.  If you put all of those together a great coach can be one of the best investments you’ll ever make.

If you’d like to learn more about about how to select a good coach or how to make the most of a coach or have any other business or wealth building questions please contact us by clicking “Ask a business question” floating at the bottom right of your screen.

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The Wrong Reason to Hire Someone

Today I got to re-witness a story I saw play out many times in my father’s life and business.  It’s a hard won lesson that some of you are going to take hard and be resistant to.  In spite of this I promise you it’s the right advice…especially for those who resist it.  Hopefully you’re not someone who has fallen into that trap and for you this advice will be self-evident.

I’ve had the good fortune over the last little while to know someone who has been struggling to find work.  My naturally tendency is to be soft hearted, generous, kind, etc.  All good qualities and in this case qualities I have to resist.  See my desire is to hire them for something, to come become a chef for me for my home meals (something I don’t need right now) or an internet marketing assistant (something they have zero qualifications for and would require massive training which their not motivated to undertake) or who knows what else.  The problem is this would do two things:

  1. It would be charity on my part effectively representing not a fair exchange and definitely not beneficial to me in fact likely costing me far more than the money

 

  1. Not serve that person even though they think it would and would like me to do it it would be a short term service at long term expense

 

Some problems simply aren’t solved short term and some problems are solved in the macro not the one off cases and this is painful for people who want to fixate on the small scale.  Not helping someone by paying for their trip to Mexico to a family member’s wedding, it’s hard they have to stay back (don’t get me wrong, you can do these things but they are pure charity and they aren’t addressing a root cause so the problem creating the situation will perpetuate, the best charity creates productivity but that’s for another discussion).  There are lots of examples.

Growing up I saw my father do this again and again in his small business, take pity on someone, see how he could help them and give them a job for which they were ill suited and resulted in a loss for him.  On the surface this seems kind hearted, it is in a sense, but it’s a bad move for everyone for a number of reasons:

  1. It’s just plain a stupid financial decision, there’s a stage and time for philanthropy and a way to do it well and this is not it
  2. It denies someone more skilled, motivated, and capable from having the same job
  3. It hurts your company reputation and brings the whole organization down
  4. It doesn’t build up the person you’re hiring so it perpetuates behavior that needs to change
  5. It leaves you with less to give in areas that you can have a higher impact

Among other faults it’s much like the give a man a fish vs teach a man to fish analogy.

I’ve made this mistake on a few occasions both lending money and hiring people sometimes literally to the point where I took money I legitimately needed (possibly as much or more so than them) and gave it away never to be returned.

The best result for everyone comes from win-win interactions, from creating the best net effect so there’s more abundance to go around in the long run.  This is a microcosm approach that seems good up close but hurts overall.

Learn the lesson, hire the best people you can every time and if you’d like to do charity or philanthropy do that separate from business and do it in a way that maximizes the impact you can make with each hour and each dollar and you’ll have the biggest possible effect in changing the world.

If you’d like some assistance or mentorship on how to hire the best people or on other business issues contact us and we’ll be happy to help.