HR: Why it matters and Why it might just be the most important thing.

HR is a polarizing subject. An entrepreneur building a great business has a hard time slowing down to build out an HR function. To them, hiring and adding operating expense for something non-revenue generating is non-sensical. Their belief in growth and their product sometime blinds them into realizing just how important HR can be to that underlying growth. This is ironic given that most established CEOS will tell you that they spend almost 30% of their time on HR related matters.

Contrary to common belief, HR is not just handling employee qualms, payroll and administrative items. HR is actually a building block to growth and today we’ll drill into one element of that – hiring.

Hiring

Most companies have a hiring process, but rarely do they have one that does an excellent job of filtering. It generally works like this: Candidates come in through traditional channels (referrals, ads, etc) and then go through a series of interviews. Once enough people are interviewed a committee meets and ranks the top candidates. The candidates that “feels” the best is then generally hired or presented to senior management for a final interview. Everyone feels included, senior management feels as if a process was followed and it feels like the right move. Yet more often than not, it isn’t the best process. The question isn’t if the employee is good enough, but rather if they are the best to help the organization grow.

We think there is a much better way - first look backwards. Evaluate and single out top performers within the organization and pull out the key characteristics of their performance and personality that make them key contributors. Write those elements out and create a ranking and scoring system that emphasizes those characteristics (1). This process helps you narrow in on what actually creates a top performer.

After you know the key elements of success, filter out your lowest tier performers (both existing and past employees) and figure out why someone may fail in your organization. Find out why prior poor employees struggled or failed (lack of experience? wrong background? wrong education? wrong culture fit?). Make it granular. This is not a search for what you could have done better, but simply a look into the individual traits that are led to failure.   

Once you’ve collected these two data sets, the head of HR should work directly with senior management to codify this data into a recruiting, interviewing and selection process. This is a massive amount of work, but once installed, saves hundreds of hours of time and yield better outcomes. Now you’re no longer hiring based on feel, but you have a science to it. When a candidate comes in the interviewers know what to ask, how to rank, and most importantly has a set of defined metrics to pick candidates. Imagine how you, a founder or CEO, will feel when you can completely trust an objective hiring process to drive the right outcome. Now when a new idea for product development or sales expansion comes up, you can trust a process to get you the right people to execute that idea.

This is not an easy process and it is even harder sticking to the framework. There will be candidates who have the perfect resume, but who don’t score highly on the scoring process. In those instances, you have to say no. Committing to a process will make your team empowered and your organization far more scalable. It comes from the top down, but ends up being the singular activity that allows a founder or CEO scale far beyond themselves.

(1) I’d bet you almost always find that your top performers were overweight hard work/intellect and underweight experience…said another way, you should recruit for the best talent, not resume