For the Factoring and Asset Based Lending Industry
I would love to present you with a special and magical formula that could guarantee every person you hired would be wildly successful and extremely productive, instead of costing you money. The truth is Ponce De Leon had a better chance of finding the ‘Fountain of Youth’ than of anyone ever finding a formula to guarantee that every hire you make will be the perfect fit. As someone who has been involved in placing over 14% of the entire ABL and Factoring industry in the past 20+ years, I can assure you a magic formula does not exist and never will.
However, you can take steps to decrease your risk of failure, just as you can take steps to ensure that the accounts you book don’t have fraud attached. Since hiring involves people, personalities, attitudes, and company cultures, each case will be unique, but you can learn from past mistakes and find specific procedures to help control the risk.
I would like to present a few tips that I have found to be successful in limiting the peril of a bad hire.
Fully Define the Role
First, when starting the hiring process, it’s best to fully define the role and responsibilities of the position. It’s much harder to determine if an individual is the right fit when you haven’t taken the time to consider the duties they will be preforming. This definition is sometimes called a job description, but to maximize your odds of a successful hire, you should also detail the attributes you believe necessary for an individual to possess in order to be successful within your own organization. To this effect, you should ask yourself questions such as: What is the culture of the company? What are the personalities of the people a new hire will be working side by side with every day? What is your personality and what type of individual do you work with best? What will new staff members have to accomplish in order to be successful? How will you measure this success?
If the vacant position was created when someone left or was promoted, analyze what made the last person in the role either successful or unsuccessful. This kind of evaluation takes time and thought but helps us look at the situation as a whole and not concentrate on only a single skill set. In most hiring cases, little to no consideration is given to finding a good fit for the culture of the organization. I have witnessed candidates, who have been highly successful in previous positions, fail in new ones because either the role was not defined correctly or the company culture was not conducive to success for that individual.
Define the Hiring Process
Secondly, it is important to define the hiring process. This means that you decide ahead of time how long you will spend with the candidates, who else needs to speak with them, what questions you want to ask, and how you want to explain the position. You should ask each of the candidates the exact same questions so that you are able to evaluate them on the same playing field. Also, don’t forget that while you are interviewing the candidate, they are also interviewing you. Presenting a well-structured interviewing and hiring process will help impressed the candidate, which means that when you decide you want them, they will be more likely to say yes to you as well. One of the major mistakes, primarily made by larger companies, is that they forget that the candidate needs to be sold on the position just as much as the hiring authority needs to be sold on the candidate. Hiring is a two-way street.
The next step is to remove emotion from the hiring process. Lou Adler, renowned author of many books on the hiring process, said, “More times than not, we hire the candidate who interviewed best, not the best person for the job.” What he means by this is that we let our emotions control our decision-making when hiring. We’re more likely to hire a person because they can sell themselves for a one-hour interview or because you personally clicked with than because they are the best person for the job. Distancing yourself from the situation can be a challenge, but it will help you make the best choice for your company.
If you implement the steps above by defining the position, assessing each candidate against a set standard, following a uniform hiring process, and objectively evaluating each potential free of emotion, then you should see an improved outcome. Now you are probably thinking, ‘all that sounds great, but how can I know if the candidate is a good match for my company?’ There are two more techniques that can help with this, which I highly suggest implementing before anyone is hired. One is an independent reference check and the other is the use of psychological testing.
An independent reference check does not involve asking the candidate to give you three references, but rather looks outside of the given three. I practice this method extensively in my own recruiting efforts. The key is to get unsolicited references, because no candidate is going to give you a reference who is going to say anything but a glowing rendition of what they want you to hear. In Factoring, the old age adage is ‘trust but verify’, although some would probably completely remove the ‘trust’ and say there are no ‘buts’. The same practice should be followed with a new hire. Always get a FCRA (Fair Credit Report Act) released signed and check references.
It helps, in our case, that we know nearly the entire industry. Rarely, do we come across a candidate who has not worked for a company or individual with whom we have built a relationship. Unsolicited references are gold, if you settle for less you might end up with fool’s gold.
So, why do I favor ‘The Test’?
Psychological testing is the other nugget, and it is probably the single most ignored measure that can be taken to increase the chances of a successful hire. Now, some recruiters would take great offense if they heard me give you this advice, because these tests can cost them money. In fact, many recruiters vehemently despise ‘The Test’ because it slows down the process and costs them placements.
I advocate a psychological profile because it allows you to look beneath the surface and provides you with a clear, concise picture of an individual’s strengths, limitations, motivations, and potential. You can learn a lot about the candidate and, if an entire department or company has been profiled, it allows the manager to evaluate if he or she is a good personality match for the culture of the company. From my viewpoint, I want each hire to be successful, hence I am in favor of any tool which will get us closer to the goal. I would rather lose a few placements due to ‘The Test’ than have candidates hired only to fail, which ultimately effects my reputation. If a recruiter is involved, guess who gets the blame if the hire is not a good one. Therefore, I highly recommend a psychological profile be done for both credit and sales positions. Sadly, there is no magic bullet to hiring, but if you follow these suggestions, I feel very confident that you will be able to lessen the risk a considerably degree. Good hunting and remember, people are the key to a successful business.