With limited resources and small (or sometimes non-existent) HR teams, hiring the right people has always been a difficult and time-consuming process for small businesses. But in the midst of a national talent and skills shortage, which has seen half of Australian SMEs unable to fill advertised roles, finding the right talent is more difficult than ever.
In a talent short market, it might be tempting to just put ‘bums on seats’ – but this would be a mistake. Hiring the wrong person can have devastating consequences, negatively impacting your business reputation, culture, and workplace morale. And with recent data showing the cost of hiring has skyrocketed to over $23k, selecting the wrong people is something SME s simply cannot afford.
Hiring bias
Most of us think we’re pretty objective and good judges of character. But as it turns out, we’re not. Research shows that humans are highly biased and we rely on our emotions much more than objective information when making decisions. The same applies when making hiring decisions, as much as we have good intentions and try to be objective our brain struggles to compare and contrast candidates.
Sometimes we get lucky and hire the right person, but oftentimes, we are pretty bad at it. Research shows HR leaders and hiring managers would only rehire 61 per cent of their recent hires and almost 90 per cent of people leave their jobs because their attitudes did not align with that of the business.
Many hiring decisions are biased due to the information candidates present in their CVs. It could be simple information like their name or the school they attended, their country of origin, or even their previous employer that triggers a subconscious emotional response that influences your decisions, either positively or negatively.
Affinity Bias, also known as ‘egocentric bias’, is one of the most common biases in recruitment. It is our tendency to prefer and hire people who are similar to us or remind us of someone we like. Ultimately, hiring bias results in good candidates being overlooked for circumstantial characteristics, and favouring other candidates for things that have nothing to do with their ability to perform the job.
Experience vs attributes
Another mistake businesses often make is hiring someone based on their experience rather than assessing their potential. A recent study found almost no correlation between a candidate’s CV and successful in-role performance, making the focus on experience over-hyped.
CVs typically give you an insight into a person’s work history and their technical skills and qualifications, but they are unable to adequately define the personal characteristics and qualities of a candidate (their job motivations, values, personality, working behaviours etc.) and the significant role those elements play in decision-making and performance at work. Combine this with time-poor hiring managers making quick, subjective decisions, and the result is bad hire after bad hire, negatively impacting the business long term.
A shift toward ‘intelligent recruitment’
Intelligent technologies and people data play a huge role in removing bias from the hiring process. By combining technology with a human approach, intelligent recruitment can create a process that is more informed, objective, quicker and more cost-effective.
Finding other ways to measure candidates beyond their skills and experiences is also key – tools like psychometric assessments allow businesses to evaluate a candidate’s fit for the role, as well as the company culture. These tools used to be out of reach for SMEs due to cost and requiring interpretation by a registered psychologist, but they have become far more accessible as technologies advance. Through the implementation of technologies that automate the ‘grunt work’ and remove bias, combined with psychometric assessments, SMEs will finally be able to stop making the same hiring mistakes and start building teams of people that work well together.
