SHOCK STATISTIC: 2 IN 5 NEW HIRES LEAVE WITHIN 18 MONTHS.

When you look at the statistics for the retention of new employees in today’s climate, the words of the old Phil Collins ballad “Doesn’t Anybody Stay Together Anymore?” start to ring in your head. Except unlike your typical number from the erstwhile lead singer of Genesis, the reality is anything but saccharine. But unfortunately, it is just as catchy. And painful.


1 The Retention Problem


The truth is that retention is an increasing problem in the world of recruitment. It turns out, according to research from REC, that 2 in 5 of all new hires turn out to be bad hires within the first 18 months of employment. This is staggering and extremely worrying.

What’s more, according to REC, the average cost of a bad hire can be as high as a staggering £132,000, depending on the seniority of the role in question. A colossal waste of capital, not to mention the cost in time and productivity. If you routinely threw £1000 per month into a fire for 18 months, it would cost you less and give you less hassle. Something familiar to many 1980’s Rover owners. And yet, 1 in 3 decision makers whose organisation has made a bad hire at some point in the past believe the total cost was £0. This perception clearly needs to change.

There are other costs too. Research by CareerBuilder shows that 62% of employers reported a bad hire, 27% of companies say a bad hiring decision cost them over £50,000 and 23% of employers reported a loss of productivity. Bad hires also have effects beyond what can be measured in pure numbers. In CareerBuilder’s survey, 22% reported bad hires having a negative effect on overall staff morale and 16% suggested there was also a negative effect on customer relations.


Most importantly, think for a moment what a mismatch between job and individual does to someone joining an organisation. Lower self-esteem, reduced motivation, stress, anxiety and impaired wellbeing are common experiences. Not good. Is this why The Stress Management Society found that two-thirds of employees (64%) have ‘poor’ or ‘below average’ mental wellbeing? Two-thirds! This is truly astonishing. Do you, as a recruiter or employer, want to do that to the people you employ? If you’re Mr. Burns from The Simpsons, the answer may be yes. If you’re a real life, caring human being and not a character from a cartoon series that should have been taken off the air in the late 90’s, I expect the answer is no.


In summary then, bad hires create detrimental effects in many ways:

·     Significant, unplanned increases in costs

·     Loss of productivity

·     Consumption of resources in the process of repeated recruitment activity

·     Poor morale within teams

·     Negative effects on customer relations

·     Lack of fulfilment and impaired wellbeing for the new employee


 Otherwise, they’re just fine.


To bring the scale of this home, let me repeat the statistic – 2 in 5 of all new hires turn out to be bad hires within 18 months of employment. This suggests that virtually every organisation is likely to experience this negative situation at some point. Many medium to large organisations are almost guaranteed to be struggling with this problem on a regular basis. Think of the costs.


2 The Method Problem


So why then, if the consequences of making bad hires are so costly in both financial and human terms, are we still recruiting using methods that have limited ability to truly change the situation?


Of what methods do I speak? Let me explain. Traditionally, we evaluate candidates according to three key measures:


·       Skills - Ability to carry out the tasks required to deliver the role (Can they do it?)

·       Experience - Demonstrable experience of successfully delivering the role in previous organisations (Have they done it?)

·       Personality - The appropriate personal attributes to interact with others in carrying out the role (Do they fit our culture?)


You will no doubt be familiar with all three elements. They have been the standard, in one form or another, for evaluating individuals against roles for decades. As a result we’re comfortable using them, they’re conventional and they’re easily understood.

These are the tools which allow us to ensure we hire the right person for the right job - that we put a round peg in a round hole. But they’re clearly not working. Figures from CareerBuilder suggest that 80% of employee turnover can be linked directly to bad hiring decisions. Yes, 80%.


These tools are not working for us as effectively as we would like. We’re putting square pegs into round holes. We’re hiring the wrong people. Then, they’re leaving us.

What are we missing?


I want to you imagine a metaphorical situation for a moment – imagine you own a microscope and you enjoy looking at tiny things through its lens, picking out the fine details that you may not otherwise see. Now imagine that there is one slide in particular that you regularly inspect through the microscope, as there are details about the object you are interested in.


Your microscope has 5x levels of magnification, which means you can see details up to 5 times larger. One day, you buy a new microscope which is capable of 10x levels of magnification. You place that slide on the microscope and zoom in to 10x – you suddenly see details about the object that hitherto were completely hidden. Your whole perception of the object is altered. You don’t see it the same way you once did because now, you know more about it. Your field of view is expanded.


The problem in recruitment today is that the criteria of skills, experience and personality have only taken us to 5x level of magnification. There is a limit to the amount of information they can give us about what a person will be like when they hit the ground running. Sure, we can finesse these criteria and improve the way we use them, but they are inherently limited to a certain field of view. We really can’t go much further.


For some roles, this may not be a problem. But for the majority, as the statistics show, it certainly is a problem.


3 Making Better Hires


To make better hires, we need a microscope with 10x magnification – in other words, we need a new way of assessing people which tells us more about them. That information needs to be crucial in determining whether the role they are applying for is right for them, as well as the organisation. It needs to allow us to differentiate between several candidates who look the same but have additional hidden attributes. It needs to be consistent in its language and framework so we can make easy comparisons. And it needs to represent an individual honestly, while being easy for anyone to understand.

To demonstrate this, consider a simple recruitment scenario - let’s say a Project Manager role in a growing Business Analysis team. Imagine you have three candidates who all have the following attributes:


·       Skills: PRINCE2 Certification, Degree education and sector knowledge

·       Experience: Over 10 years experience of Project Management

·       Personality: Extroverted personality with strong emotional intelligence


What additional information do you have at your disposal to differentiate between these three candidates? 


What insight do you have into their likely impact and contribution to the team they are to join? 


What data do you have to interpret how they will fit into the culture of the client organisation?


The answer is very little, if none at all. Sure, you can pick up insights at interview and through the application form. But how likely are you to be presented with consistent information between the three candidates that allows you to pinpoint exactly how they differ? What framework do you use to assess this?


So herein lies the opportunity for recruiters. If you were somehow able to harness an additional measure beyond skills, experience and personality, gain some additional data to inform your selection process, the odds of making the right hire first time would swing dramatically in your favour. You could go from 5x magnification to 10x magnification, to use the microscope metaphor again.


Wouldn’t it be great if someone had already solved this problem? Well it turns out, we have solved it.


4 The GC Index® - The Next Step Forward


A few years ago, my colleague Nathan Ott, Chief Polisher at The GC Index®, was faced with a growing number of clients asking his company to source “game-changers” - individuals who could bring that rare spark of creativity and invention to organisations. He realised that it was surprisingly difficult to identify an inclination to make a game-changing impact in individuals. There was no established means of measuring game-changing impact or indeed, more importantly, any form of impact.


It was clear that personality profiling would miss the mark, as who a person is does not provide an accurate prediction of what they will do.


The volume of these requests led Nathan to commission an academic research project with Dr. John Mervyn-Smith and Professor Adrian Furnham at University College London, which aimed to identify, profile and understand how individuals make an impact – what they prefer to do when put into a work situation. They discovered that each individual has their own combination of proclivities (their inclination towards making a particular type of contribution) which define how they make an impact.


The research identified that there are in fact five of these key proclivities, which can be identified and tested in all individuals. Let me share them with you now:



The Game Changer – Transforms the future (have great ideas)

The Strategist – Maps the future (make sense of ideas)

The Implementer – Builds the future (get things done)

The Polisher – Creates a future to be proud of (make things brilliant)

The Play Maker – Orchestrates the future (bring people together)


It turns out there is a distinction between individuals who seek to make an impact through ideas (The Game Changer / The Strategist) and individuals who are focused on making an impact through tasks (The Polisher / The Implementer). There is also an accommodation for individuals who prefer to contribute through relationships (The Play Maker).


We call this language and framework for understanding impact The GC Index®. Here's a visual representation of the model:


As a result of the research that went into developing The GC Index®, we now understand that everyone offers their own package of impact around these five proclivities. It is thiswhich defines how an individual will make a difference in an organisation. It has little to do with an individual’s personality or even their skills and experience, although these may of course, support the person in making their impact. It is all about what they do. And like a car flying through a red light at 60mph, we’ve been missing it all along.


5 Using The GC Index®


As an illustration of this – you have two candidates for Business Analyst role with a qualification in business analysis, around 10 years industry experience and INTJ personality profiles, but there could be marked differences in their impact:


·     Candidate 1 is a Game-Changer / Polisher – they like to work with creating radical ideas and then developing them to their fullest extent.


·     Candidate 2 is a Strategist / Implementer – they like to plan out how something can be achieved and then get on and make it happen.


As a recruiter you might ask - which impact does the role require? It turns out that this role requires someone who can write strategic plans, get out on the ground and conduct research, analyse figures and write reports. Who would you select? Who would thrive and feel potent in this role? Who would best integrate into the team?


Clearly, the answer is Candidate 2.


The beauty of The GC Index® is it offers an incredibly powerful and nuanced view of individuals but at the same time, it’s very simple to understand and highly relatable. When you put this in the hands of individuals and teams, it is truly remarkable how quickly they understand it and how the focus of their conversations shifts to pragmatic discussion about how best to get things done while ensuring everyone can play to their strengths.


Here's an example of a candidate comparison using the language of impact as provided by The GC Index®:



A further revelation – when individuals are in a role that allows them to play to their proclivities and make their preferred impact, they have a greater sense of wellbeing, are more productive and more successful. According to Korn Ferry, one of the top reasons new hires leave is their specific role isn’t what they expected and working for the company was different than they thought it would be. A prime example of the consequences of a mismatch between the individual’s preferred impact and the requirements of the role.


So here’s the newsflash – for years we’ve been recruiting with one hand tied behind our back. We’ve focussed so heavily on skills, experience and personality that we’ve missed the most important aspect – what impact does the individual prefer to make and how does that fit with what is required in the role? Metaphorically speaking, we’ve only been using 5x magnification when we need 10x.


The GC Index® is the increased level of magnification on the microscope. It is a breakthrough in understanding individuals and is the means by which we can finally move forward in making hires which provide organisations with motivated, impactful and high performing individuals who are less likely to leave and therefore, cost less in the long run.


6 Supporting You In Making The Step-Change


So who’s responsible for helping recruiters to make this step-change? Well, as far as we’re concerned, that’s us.


We’re so passionate about The GC Index® that my organisation, Franklin-Hackett, is now dedicated to bringing about this step-change in how individuals are identified, assessed, hired and integrated into organisations. Our purpose is to help internal and external recruiters make better quality hires by helping them to integrate The GC Index® into their approach.


Why are we doing this? Well, our ambition is that organisations prosper by having the right individuals, making their preferred impact and contribution, aligned to purpose and working as part of game-changing teams. We want to contribute to developing workplaces where diversity of impact has tangible business benefits, thus allowing everyone to benefit both personally and commercially.


Ultimately, we want people to have happy, productive and successful working lives.

So what does it cost to utilise The GC Index®? As with any profiling approach, there is a cost to administering the tests in order to establish what impact an individual prefers to make. This cost is less than you may expect. After that, you can integrate the language and framework of The GC Index® into your approach however you wish. For example, you can use a candidate’s profile as a basis for asking impact-specific questions at interview or in Assessment Centres. You can use the language and framework as a basis for developing a role with impact in mind. Or perhaps, you could use it to inform the language you use in advertisements.



Let me remind you of the astonishing figure of £132,000 I mentioned earlier – the average cost of a bad hire as identified by REC. I guarantee you that utilising The GC Index® for a role will cost significantly less than £132,000 and may well save the same amount again by increasing the likelihood that the right hire is made.


Finally, there’s one more benefit that I haven’t told you about – diversity. One of the astonishing revelations we have uncovered is that thinking about individuals in terms of their impact cuts through the crap. When we are interested in what difference a person can make, we have less incentive to interrogate who they are.


A world where people are valued for what they do, not who they are? It’s possible folks, and we now have the scientifically verified mechanism to make it happen.


So it turns out that there is a way to beat the depressing statistics. In the words of Phil Collins again, making the right hire is possible – Against All Odds.


Perhaps you will join us in changing the recruitment game, so everyone can make their preferred impact to everyone’s benefit.



ABOUT THE AUTHOR



John Hackett is Lead Change Maker at Franklin-Hackett and is a member of The Change Maker Group.


He has over 15 years experience delivering game-changing transformation in organisations by developing people to play to their strengths and creating cohesive, potent teams who are able to deliver the maximum impact. The programmes he delivers have transformed organisations ranging from Local Authorities to large Private Companies.


Outside of work, John is often engaged in charitable and community activities and is a somewhat frustrated musician.

© 2020 FRANKLIN-HACKETT LTD. ALL RIGHTS RESERVED.

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