The Gut Hire – or the “I’ll know it when I see it” hire. A lot of people utilize this strategy and we want to talk about the pros and cons.

62% of small business owners say they have made a wrong hire. The other 38% of those business owners are liars. Every everyone is made a bad hire. It doesn’t matter what company you are or what you do. Hiring is uncertain. You never bat a thousand.

When we deal with people there’s so many variables, things happen in people’s lives. You could hire the right person, but something happens outside of work and their personal life that affects performance or availability. There’s so many variables here. We never get it right.

So the idea of hiring is we always want to play the probabilities. We want to do whatever we can to increase the probability of getting the hire right, and hiring on gut feel it minimizes the probability of of getting the higher right.

Why is it important to get the hire right? 78% of employees surveyed said bringing the wrong person into the organization can affect their dedication to your organization.

Good employees become average or quiet quitters – and stop caring because you put the wrong person in there. 78% of people, that’s a big number. 80% of your turnover is because of wrong hires.

On average, the cost of a bad hire is about five times that person’s annual salary. That’s a huge cost. It could be lost business, it could be missed up sales, it could be any number of of things.

Evan Pein has a really simple definition for hires and divides them into ABCs. An A player is someone who if you give them a task they either get it done on time or early to the required standard or above. B players are those who will get the task done on time or a little to the standard or a little lower.

C players only concern is job preservation.

If you build an environment of A players, B players will raise their game and C players will get outta town because that’s a culture of getting things done. C players can’t hide in a culture of accountability. Now if you have more C players and A players, your B players performance will go down and your A players will get outta town because they can’t stand working in a culture where there’s finger pointing and people aren’t doing their job. So, we always want to try to create a culture and hire people that are gonna raise our company up, raise our productivity, raise our performance, our quality, our OTD.

So, how do we find those A players to create the culture we want? Consistency and analysis. If you have four steps in your process, after each step, you should be saying, Is this the right person or not? Did they meet the criteria of step one?

So then we move into the consistent piece, the same people asking the same questions in the same order. It removes bias and creates a baseline. These two are the most important pieces of a competent hiring process. Stop hiring the B’s and C’s – create a consistent and effective process and get rid of the risky gut hires.

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