Are You Hiring for Tomorrow?

I am always interested in reading about leadership and selection issues from a different perspective. As in any field, HR can become an echo chamber of the same ideas without generating much new thought. With that in mind, I was fascinated by this article about interviewing and cultural fit. Don’t be scared off because it’s from an academic journal of sociology. The writing is straightforward and you don’t need to be a sociologist to follow it.

The author, Lauren A. Rivera, looks at the initial screening practices of “elite” law, consulting, and finance firms when they hire new college, MBA, and law school graduates. She originally wanted to study them regarding gender issues, but became more interested in their ideas regarding cultural fit and how it affected the firms’ hiring practices. She describes in very good detail where and how these firms generally look for candidates, the process of interviewing, and how the evaluation committee (which frequently does not include a representative from HR) comes to its decision.

In speaking with the interview panel participants, Rivera reports that cultural fit is the most prominent factor in deciding whether a candidate moves to the next stage of the hiring process. As she digs deeper, cultural fit (how well will this person work in our environment) doesn’t so much apply to the firms as does the sentiment “Would I like this person?” Think about that for a minute. This is the process of selecting the future executives of this firm (starting at a six-figure salary plus substantial bonuses, and the chief concern of the interviewers is whether or not they would enjoy being stuck in an airport with this person. As Rivera succinctly puts it, “Essentially, they [the interviewers] constructed merit in a manner that validated their own strengths and experiences and perceived similar candidates as better applicants.”

There were many explanations from the interviewers for this approach to interviewing (the applicant pool was homogeneous in terms of skills, we do a lot of training, and [laughably] “anyone can do this job,” etc.) and it’s possible that more structured assessments would take place later in the process. Rivera also reports that fit was more important in jobs where there was more group work involved (law) than technical work (consulting). Only in consulting were technical skills (in this research) evaluated at this stage, though fit was still given more weight in the decision-making process.

The online comments I saw about the article focused on the skills vs. fit argument. The bigger issue is that this process is internally focused (Would I like working with this person?) instead of externally focused (How will hiring this person improve the quality of our services?). For firms that are paid for their analytical skills, it was surprising that so little analysis was applied to screening process of prospective employees. The point of the article was not to validate the process, but to shed light on the nuances of it. It was surprising not to hear any of the firms defending their practices based upon data (it’s possible that such comments could have been made but didn’t make it into the article).

But what if this is not the best way to sort and acquire talent?

From a business perspective, these firms make a lot of money, so there isn’t an immediate economic incentive to change. Nearly all of the students described in this process will land a great job in their chosen field, so there’s not a labor market problem of the youngest and the brightest not finding work in a field that maximizes their skills.  Would consulting Firm A be even more successful if it hired a higher percentage of the best talent compared to Firm B? Is it possible that “hiring people like me” leads to a more engaging, but a less profitable firm? If the firm is privately owned, maybe after a certain profit level the partners value the friendship factor more than economic ones.

The biggest takeaway for me (besides the confirmation that if you, or your child, wants a job at a prestigious firm, an Ivy League education and internships at top companies is the best way to get there) was how little proven effective talent selection methods had permeated these firms. This is not meant to disparage the HR professionals at such companies, but rather, it shows how powerful the hiring echo chamber is.

The article also lays bare the application of the cultural fit concept. I am sure there will be several comments about how important cultural fit is, and how great a predictor it is of turnover and success. However, the data show that using measures of cultural fit for selection are less accurate predictors of performance than structured interviews or other assessments. Cultural fit also does not do a great job of predicting turnover. At best, it predicts work attitudes, which is interesting, but irrelevant to organizational performance.

Rivera’s article shows that using “cultural fit” as a hiring criterion will lead to a recycling of leadership talent. Much like the generals who are always accused of preparing for the last war, this approach to hiring ensures that you are rehiring yesterday’s leaders. A more critical question is what steps are you taking to hire for tomorrow?

Warren Bobrow, Ph.D. specializes in employee selection, manager assessment, structured interviews, and opinion surveys. He has worked in a diverse range of industries, including customer contact centers, finance, health care, petroleum, retail, distribution, telecommunications, utilities, and apparel manufacturing throughout North America, Europe and Asia. Dr. Bobrow strives to create assessment programs that a client can easily manage and are designed to meet their specific needs. You can read his blog for occasional comments on leadership and employee selection.