Seek These 7 Character Traits To Avoid The Risk Of Bad Hires
The cost of a bad hire is staggering. Here’s how to do it right.
The implications of a bad hire are staggering. The U.S. Department of Labor reports that the price of a bad hire is at least 30 percent of the employee’s first-year earnings. A five-figure investment in the wrong person, for a small company, could potentially threaten the business.
Tony Hsieh, CEO of Zappos, who has said that his past bad hires have cost his company “well over $100 million,” has even gone so far as to offer his new hires $2,000 to leave the company, weeding out those employees who are there just for the paycheck.
To avoid hiring the wrong person, the majority of companies issue screenings, thorough interviews, and even aptitude testing. But, from my perspective, there are seven non-negotiables to consider when hiring a new employee. Respect, belief, loyalty, commitment, trust, courage and gratitude are things employers value even more than skills and background.
Why are these characteristics vital to retaining new employees? Here are three reasons these non-negotiables are key to avoiding bad hiring decisions.
Improved hiring process
At Fishbowl, our hiring process is centered around these non-negotiable traits. During the interview, candidates are asked to share situations where they have exemplified each of the character traits. Because each candidate is interviewed by multiple leaders, decision makers are able to compare assessments on each trait. The candidate’s references are also asked how their colleague demonstrated those seven qualities in the workplace.
Many companies like ours hire first for character. For example, Robert Chavez, CEO of Hermes US, looks for personality, values and integrity in his hires. One of his favorite questions in an interview is “What’s important to you?” This helps him understand whether a potential hire has the non-negotiable traits he’s looking for.
Higher job retention
In my experience at Fishbowl, hiring for these traits has led to what some would consider unusually good hires. The result for my company has been near-zero turnover due to a bad hire — with many employees expressing the desire to stay with us for life. There are also academic studies that support the relationship between job retention and these non-negotiable character traits. One recent study, for example, found agreeableness (similar to “gratitude”) to be negatively associated to individuals’ intent to quit. Loyalty and commitment similarly lead to a higher job retention rate.
Discovery of hidden gems
At times, this nontraditional hiring criteria leads to employees with unusual backgrounds. Take John David King, for example. Now COO of Fishbowl, John David had no prior background in leading a sales organization when he was hired 10 years ago. He did, however, have heart, spirit and character, coupled with a law degree and a bachelor’s degree in communications.
We’ve filled our developer ranks largely by seeking out interns with the right characteristics who wanted to learn how to code. Those interns included a firefighter, an electrician and even a culinary student.
As Jim Collins stated in his seminal work, Good to Great, “Start by getting the right people on the bus, the wrong people off the bus and the right people in the right seats.” In every case, the right people have these seven non-negotiable character traits. Hire for these traits, and you’ll quickly notice your hiring process improve and retention rates increase. You may even discover hidden gems in your workforce.
Call to Action
Would you like to know more? You can follow my weekly Forbes.com columns (where this originally appeared) on life, leadership and entrepreneurship here.
You can learn more about my company, Fishbowl Inventory, by visiting our website here. I look forward to hearing from you.