Why New Hires Fail

Why New Hires Fail

Learn about the main reason why 46% of new hires fail and what you can do to reduce your failure rate.

Why New Hires Fail

Mark Murphy, the author of the book Hiring for Attitude tracked over 200,000 new hires and found that 46% of new hires failed within the first 18 months. Considering the huge direct and indirect costs of bad hires (The CEO of Zappos estimates that bad hires cost his business $100,000,000), it is essential to understand why new hires fail and what businesses can do to reduce that failure rate.

Why are so many new hires failing?

What Mark and his team found was quite remarkable – 89% of new hires failed due to attitudinal reasons and only 11% failed due to a lack of skills. 4 of the main attitudinal reasons that new hires didn’t work out are the following:

  1.  Coachability (26%): The ability to accept and implement feedback from bosses, colleagues, customers and others.
  2.  Emotional Intelligence (23%): The ability to understand and manage one’s own emotions, and accurately assess others’ emotions.
  3.  Motivation (17%): Sufficient drive to achieve one’s full potential.
  4.  Temperament (15%): Attitude and personality suited to the particular job and work environment.

So the answer for how to improve hiring success rate seems obvious – hire for personality and attitude. However, that is unlikely to be of much use to you unless you can answer the following questions:

  1. Do I objectively know the personality and attitudinal traits that people who are successful in a particular role in this company have?
  2. Is our personality assessment process objective or is there a lot of subjective variance in the process?
  3. How do we test whether our personality assessment process predicts performance?

Many companies use interview questions to understand personality traits and values and this can provide insights but many candidates are well prepared for such questions. Also, how can you objectively know what traits people who are successful have if you have no objective, verifiable and falsifiable way to measure for these traits?

Man Analysing HR Data

How can I improve my hiring success rate?

The solution to these issues is to incorporate psychometric personality assessments into your screening and selection process. These assessments can supplement all the other approaches to selecting candidates provided they meet the following criteria according to the Harvard Business Review:

  • They need to measure stable personality traits that are unlikely to change over time.
  • They need to be normative in nature. This means that they allow you to compare candidates’ scores to determine which candidates possess the highest and lowest amounts of a given trait.
  • They need to have a “distortion” and “lie detector” scale to help you understand how likely it is that the results accurately reflect the test-taker.
  • They need to have high reliability (i.e. that they accurately measure these traits and that an individual’s results won’t be vastly different if they take the test a year later) and they need to have validated studies that show that they predict job performance.

How can I use these assessments to select better candidates?

  1. Identifying the right personality traits to look for – To find out what traits you need to measure, you can ask your current staff in a given role to take the assessments and correlate this data with performance data to identify the traits to look for in new candidates.
  2. Screening and selecting candidates with the right personality traits – Once you know what personality traits to look for, you can incorporate these assessments into a screening and selection process to identify high-fit and low-fit candidates.
  3. Testing the effectiveness of the assessments – After a couple of years, you can test whether those that were identified as high fits by the personality assessments actually were the best performers and you can refine your strategy based on the data.

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