Successful hiring is one of the key factors to operational success for large and small businesses alike. Executives should approach the hiring process as a means to both improve their existing workforce and to secure a candidate who will add long-term value to the organization. If approached merely as a step toward replacing a lost asset, the hiring process will squander considerable resources and forfeit significant opportunity value from a potential personnel improvement. The mission is obvious, yet, according to business owners, finding the right employees can be an elusive aspiration in a drawn-out process.

The results of the hiring search can be crucial for the future of small businesses and a poor decision can easily cost any organization well into the six figures. Every new hiring opportunity has the potential to advance a business’s interests or set them back significantly, and should be approached using the same level of data, knowledge, and preparation required for any critical business decision.

The “people decision making” process, however, is littered with intangibles. Nation-wide unemployment continues to hover around 9%, but we have yet to experience the expected talent surplus from this prolonged recession. Instead, talent managers continue to struggle to fill leadership roles and key positions with the people who are right for their organizations. Avoiding this quandary is paramount to every business’s success. To do that, organizations must adopt hiring methods that increase the chances of securing productive and “profitable” hires.

Sift Through the Facts

Identifying the right new employee should involve more than selecting candidates by resume strength, interview performance, personal references or “gut reaction”.  While the traditional big three – resume, interview, and references – can help drive an application, these factors alone cannot generate a comprehensive enough portrait of the candidate to justify the company’s investment of time and money.

The resume frequently serves as the sole initial source for determining candidate strength, and includes information about education, experience, and special skills. This document is, however, an imperfect guide to a candidate’s true strengths. Various surveys and research find that between 39% – 50% of resumes contain erroneous information, so they must be taken with a grain of salt until fully verified.

Despite the prevalence of inaccurate data, executives can still get some information from the resume. The reported candidate’s career arc can provide information about career path; roughly how loyal to the company he may be; what the candidate reports having accomplished at each previous job; how much time spent in areas that a company requires.

Weigh Strengths

Hiring managers should not give too much weight to years of experience and technical skills alone. A resume does not report how successful the candidate was – just that he held the positions. These indicators are far less likely to predict high performance than factors such as motivational fit, organizational culture match, and interpersonal skills. So, in looking at a candidate’s resume, it is important to conceptualize how an applicant’s prior organizations may have functioned, how their qualities impacted performance and demanded work, and how the individual connected with the unique company culture. And, with over a third of senior executives citing retention as a pressing talent concern, it may be important at this stage in the process to check for other such candidate traits as well.

Executives rarely give these important factors enough consideration in hiring new candidates. In a 2009 study, 43% of executives gave priority to relevant experience and technical skills, only 24% gave similar weight to an individual’s ability to collaborate in teams and 11% considered the candidate’s readiness or ability to learn new things, both of which are more related to success than skills.

This same pool of executives reported that their hiring practices relied heavily on subjective personal preferences, and their views about hiring differed varied widely. They disagreed on whether to hire insiders or outsiders, who should be involved in the hiring process, how to assess candidates, and the keys to successful hiring and retention.

Click here for part two of this discussion.