In my last column, I explored Jim Collins’s “hedgehog” principle and how powerfully it can be used to attract great employees. After many dozens of interviews with CEOs, I am convinced that leaders with well-defined hedgehogs implement the most successful hiring models.
Recent job growth numbers mean more companies are competing for the same talent. This puts additional pressure on us to determine how we can minimize burnout on our best people.
I interviewed CEOs of successful small and midsize companies to find out how they are addressing this trend. They had to meet two criteria: first, they had to report consistent profitable growth over the past 3-5 years, and second, they had to demonstrate a passion for attracting and retaining good people.
Rod Walker, president and CEO of Knightsbridge Technology, a Chicago-based consulting firm, meets the criteria. According to Walker, “Recruiting top talent is my number one priority. As we’ve experienced a 41% CAGR, we’ve challenged ourselves to attract top-tier people quickly while maintaining our culture.” It’s no wonder Knightsbridge boasts a 15% voluntary turnover rate, much lower than the current service industry average of 25%.
I also spoke with Janet Amirault, president of the Software Consortium in Towson, MD. This firm provides strategic IT consulting services to clients such as Black & Decker, Sylvan Learning, and Marriott Corporation. They have achieved annual growth of more than 15% in the last 9 out of 10 years. Of the two good workers who quit last year, both became corporate clients.
These leaders shared common strategies:
1. Design the position first, then recruit. Amirault suggests: “Document the key knowledge, skills, and behaviors you need for each position.” In my experience, many companies still rely on job descriptions to attract good people and skip this critical step. Some positions will always require certain credentials and education. What’s often missing are the key behaviors you’ll need to quickly align this person with your company’s culture, processes, and values.
You will also need to review your interview questions. For example, if you want to make sure that this person has a commitment to lifelong learning (a behavior), how would you know? Amirault recommends that you “ask very specific questions, such as ‘what were the last two courses she enrolled in while working at ABC Company?’
2. Implement multiple candidate data collection methods. Consider personality surveys (such as PDP/Dynapro and Myers-Briggs) and external background checks (such as Kroll America). Most of these programs require less than 30 minutes of your time and can cumulatively cost less than $500. The investment is a fraction of the cost of a bad hire, ranging from $100,000 in IT to millions for mortgage brokers.
3. Harden your systems and enabling technology. According to John Walsh, president of Del Mar Database in San Diego, “Creating your own leaders can be a very effective strategy, but it requires very good business processes and technology. Internally promoted teams need better tools due to their lack of experience.” The Mortgage Bankers Association projects an IT capital budget increase of 47% in 2004, two-thirds of which is programmed to streamline processes for loan origination professionals.
4. Increase your commitment to consistently provide professional development. Knightsbridge invests more than $1 million a year in training, paying special attention to the development of new employees and junior consultants. That’s almost 3% of the revenue. Software Consortium has shifted a solid percentage of its training budget from standard technical skills to leadership and sales disciplines.
These great examples prove that if you treat your recruiting system like gold, and your hedgehog is strong, you can outsmart your competitors!
