Should Companies Hire for Potential or Past Performance?
It’s tradition for business leaders to focus on past performance when hiring. However, a person’s performance in a previous role isn’t always indicative of their future success at the company.
When Fast Company magazine first launched in 1995, founding editor William C. Taylor took the traditional approach to staffing by hiring writers with past business-writing experience from esteemed publications like Businessweek and The Wall Street Journal. About a year into the company’s success, however, the publication changed its attitude.
“What we found was as smart as those people were and as experienced as they were, they had all grown up in a certain environment, a certain point of view about what business publishing was all about,” Taylor said.
Taylor started Fast Company in an effort to challenge traditional views of business publishing, so hiring workers with traditional business-writing backgrounds meant he had to “untrain” their already-established ideas around how to report and write on the subject. As a result, Taylor began hiring bright people who believed in the mission of the publication but didn’t necessarily have the technical skills of seasoned business writers.
Hiring for potential success became more important than hiring for past experience. “More than anything, it’s hiring for a sense of shared values,” Taylor said. “Any company that feels it’s doing something really special or distinctive in the marketplace has to ask itself: How do we fill our workplace with people who believe in the same things we do, who are excited and eager to compete in ways that might not be standard operating procedure?”
Fast Company’s focus on hiring for potential vs. past experience exemplifies an approach other companies are taking in today’s business environment. Given how organizations are taking a more well-rounded to approach to hiring by looking for people who fit the organization’s culture and possess strong technical skills, it makes sense for some companies to consider looking beyond simply what a candidate has done in past jobs and instead focusing on their potential to learn and grow in the future.
This isn’t true for every role in the professional world, however. “I wouldn’t recommend that for airline pilots or surgeons, for example,” Taylor said. Still, it was right for Fast Company. As the magazine grew, the company looked to networks of their employees and avid fans of the publication; they then interviewed candidates about their interests, passions and values more so than their skills. Taylor and Fast Company’s other early leaders believed they could develop people’s skills over time.
This obviously proved successful for the now-popular business magazine. A similar approach is working at enterprise cloud applications company Workday Inc. Greg Pryor, the Pleasanton, California-based company’s vice president of leadership and organizational effectiveness, said it hires by evaluating the six attributes common in its most successful people. It then uses these criteria to develop interview questions for candidates in its hiring process. These questions are designed to see where candidates share attributes with existing employees so the company can identify their potential for success at Workday via its ratings system.
Although Pryor declined to share specific statistics of a study the firm conducted using a control group, he said performance and retention at the firm has improved thanks to this process. “I think selecting people is one of the most important things we can do,” Pryor said.
Hiring for potential performance could mean some workers lack information and skills needed for their new roles. Therefore, Workday’s selection process rates the capabilities needed and then uses the same scale and structure throughout the talent lifecycle — through onboarding, development, promotion, etc.
This isn’t without its challenges, though. There’s a huge responsibility on the interviewers to determine if someone will be successful. “The burden moves from the candidate, actually, to the interviewer,” Pryor said.
The natural alternative to this method of hiring is identifying successful candidates based on past performance. Pryor said Workday avoids this because focusing on metrics such as sales results at a previous company doesn’t portray the full picture of the candidate’s potential success at Workday. Those results came in a different business context than where the job seeker is interviewing. “I believe that identifying the underlying traits, the underlying attributes, the underlying capabilities, a sense of values and motivators for individuals, and saying, ‘those are right for us in our context,’ is really important,” Pryor said.
On the other hand, looking to past performance can still ensure that those metrics will apply to the next job, according to Brad Landin, president and chief compliance officer at Employment Screening Resources, a pre-employment screening and employee background check company based in Novato, California. With a standardized application, the right questions and professional references, measures of past performance can create an accurate outlook for future performance, Landin said. This approach isn’t just looking at the stats on a résumé and taking them at face value. Rather, Employment Screening Resources uses behavioral-based interviews that focus on a candidate’s past behaviors, which helps to uncover more accurate measures of past performance beyond what candidates put on their résumés. Landin said this is more indicative of future performance.
Particularly for roles that use metrics as measures of performance, hiring for past performance can be beneficial, he said.
“You want to be able to bring people into the organization that have that type of mindset and that have demonstrated that type of behavior in the past,” Landin said. Then, when activities at the organization align to specific goals, and each person shares a part in achieving that, along with leaders rewarding, promoting and terminating based on that criteria, the result is a more focused and successful workforce, he said.
Knowing when to let someone go is also an important part of the hiring process, Landin said. It’s important to be brutally honest about if the company has the right person in the job. After a reasonable amount of time — typically around 90 days — if the new hire isn’t performing, let them go and move on.
This is true when hiring for potential performance as well. Leaders should be willing to let people leave if they aren’t successful early on, said Fast Company’s Taylor. “No matter how hard you try at recruiting interesting people, evaluating them, some percentage of people, no matter how much work you’ve done, the fit just isn’t there.”
Lauren Dixon is an associate editor at Talent Economy. To comment, email email@example.com.