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Why Hiring Should Be More Like Buying a Used Car

When you think about it, the process of buying a used car is pretty similar to hiring an employee.

Buying a Car

Hiring an Employee

Determine the budget … Determine the budget

Search for cars (online and in publications) … Search for candidates (online and in publications)

Research the car’s history using online tools … Check the candidate’s history using resumes

Hire a trusted mechanic to confirm condition

Conduct a thorough test drive … Conduct interviews…maybe a lot of them

Negotiate the best price … Negotiate the compensation package

Drive the car home … Onboard the new employee

Buying a used car means the buyer can get more car for the money, have less depreciation, and make lower payments. But, if the buyer isn’t careful, she might buy a car that turns out to be a lemon — unsafe and under-performing, maybe requiring hundreds if not thousands of dollars to fix or replace.

Few people purchase cars based on the seller’s description alone. Instead savvy buyers work to discover the facts about the car’s condition before they write a check. The car buying process generally looks like this:

  1. Determine the budget
  2. Search for cars (online and in publications)
  3. Research the car’s history using online tools
  4. Hire a trusted mechanic to confirm condition
  5. Conduct a thorough test drive
  6. Negotiate the best price

Focusing on facts rather than flash means the difference between getting a great deal on a car and buying someone else’s problems.

Notice where the hiring process differs from the used car buying process: there is no step to collect facts. We think “caveat emptor” applies as much to hiring people as to buying a used car. It makes sense that a buyer would spend the time and money to hire a trusted mechanic to confirm the condition of a $20,000 car.

And when the hiring process is analyzed, a manager likely has more data about one car than she had about her last three new hires. And the car data is much more reliable information. Why would a hiring manager neglect to confirm candidate facts before hiring an employee who represents a $60,000 expense in the first year? The problem lies in the decision data and figuring out what information is most predictive of future work success.

Let’s pop the hood and take a closer look at hiring.

Consider the resume. It is a marketing document designed to present an individual in a favorable way. (Think seller’s advertised description, new paint job, and a spritz of Lane’s new car smell spray.) Many people earn a pretty good living sprucing up resumes, making them look terrific, including the words that scanners search for and hiring managers respond to. But facts? While the list of prior jobs identifies where the candidate worked, evidence of work quality is missing. A resume also doesn’t help relate past experience to the responsibilities of the position he or she is seeking. This is further complicated by the fact that up to 60% of resumes contain erroneous information like job title, work duties, and dates. Just like the car seller’s description, the resume represents what the candidate wants a hiring manager to know.

Now, consider the interview (think test drive). Just as a car buyer would not make a decision based on driving the car a few miles, a hiring manager should not rely on an interview to provide reliable data. Most managers believe they will “just know who is a great candidate,” but in fact, the success rate of an employee hired based on interviews is about the same as randomly selecting a resume from the stack submitted: interviewer ratings of candidates are not related to subsequent success on the job.

It is fairly easy to influence interviewers to get higher interview scores, too. If a candidate speaks positively about the company or has a steady eye gaze, ratings will go up. The human interaction between interviewer and candidate can skew the ratings positively or negatively.

So, if the typical job candidate data sources deliver less reliable information than the used car buying process, what can the hiring manager do? Pre-hire assessment is the answer to the trusted inspection. Valid assessments accurately report the strengths of candidates — the key factors that are not observable, but are essential to success on the job. Assessments use un-fakeable data to report on the match between the applicant’s abilities and the demands of the job. Some even report how likely it is that the individual will fit in the company’s culture.

Assessments are the independent car inspector who reports on all the factors that matter — the ones the buyer can’t see. Candidates can’t fake them and using assessments improves the rate of hiring success.

Unfortunately most executives are unaware of the impact hiring mistakes have on their bottom line. Most hiring managers believe hiring is an exercise in amateur psychology and they rely on past experience and their intuition, neither of which provides reliable information.

With the minimum cost to hire one person being around 20% of annual salary, it pays to get the facts on a candidate from a validated assessment instrument. The solution is to get the kind of factual, verifiable information that you get before buying a used car: an accurate picture of the candidate’s real strengths identified through a valid assessment system.

So next time you’re ready to hire, don’t be distracted by the fuzzy dice or new car smell. Instead get a scientific assessment and never again have to say, “Now, remind me again … why did we hire that guy?”

Written by – Dr. Deborah L. Kerr & Brian Vogel

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