There is nothing more inefficient or costly than selecting the wrong person to fill a particular position within a firm. There is the time lost in the process, not to mention the cost of acquiring a new employee along with wages paid to someone who does not stay.
And even though much has been written on the subject of employee selection, a large number of firms still struggle with this concept. Most often, it is due to a lack of research and preparation before the hiring process, but it could also be due to ill-defined job responsibilities, a lack of attention to the team dynamics, personality issues and other factors.
And some firms have hired "targets of opportunity." These are people who came to the attention of the firm, who possess certain skills, but may or may not be a good fit for what the firm needs. So the question is, what are the proper steps to ensure that the person you hire turns out to be the right employee?
Step One: Pre-hire preparation. Clearly, you cannot hire the right employee if you do not know who or what you are looking for. Having a fairly well-defined idea on who this person should be will go a long way to finding this person.
One way to accomplish this is with detailed position descriptions. By this, we are not talking about a one- or two-paragraph description, but a detailed list of position responsibilities, firm accountabilities and management expectations. These position descriptions can not only be used in the hiring process, but also in periodic objective job evaluations. By establishing objective criteria, then observing performance and behavior, you make the evaluation process an objective-driven process, rather than subjective.
Another aspect of the pre-hire preparation is identifying where your job candidate could come from. For this, it will be necessary to determine the position requirements (i.e., the education level, years of experience and experience with certain aspects of the job). This will help to narrow the field of candidates. There are a number of firms that specialize in recruiting candidates for positions. With apologies to the many firms who offer such services, there are three worth noting: Turning Point Inc. (www.tpisearch.com) assists in identifying veteran advisors and executives for the financial services profession. New Planner Recruiting (www.newplannerrecruiting.com) works with college and university programs to identify appropriate financial planning practitioners. Experienced Advisor Recruiting (http://www.experiencedadvisors.com/) offers advanced services for firms specifically looking for experienced (five or more years), credentialed (CFP, CFA, AIF, etc.) financial planning and investment advisory professionals with firms who need the unique blend of technical expertise and relationship management skills these advisors possess.
Use of these firms often comes at a price, but it may be worth it, considering the time and effort it takes to identify candidates and narrow the field to your firm's specific needs. There are also college programs with graduate resumes online for review.
Step Two: Background information. There are three sources of background information that are critical to the hiring process. First, you should consider putting your top candidates through some sort of psychometric testing. But this alone is not enough.
You should first familiarize yourself with the test results and you should also consider performing psychometric tests on all of your existing employees to create a team profile. This can aid in identifying who would fit in with the rest of the team. Knowing what test results would identify the perfect candidate for your position will give you an edge when your candidates do the test. Two companies that produce reliable results are Kolbe (www.kolbe.com) and Caliper Corp. (www.calipercorp.com).
You should also seek criminal background reports (in all states, not just your state) and, if applicable, U-4 information (an SEC broker check, etc.).These days, such reports are easy and relatively cheap to obtain online. In most cases, for criminal background checks you will need the candidate's permission and his Social Security number along with other identifying information.
The resume is yet another source of background information. Besides calling former employers, firms should look for gaps in the history of employment. This can raise questions for an interview. It is often difficult to get much info from calling former employers, but verifying employment and employment dates is helpful.
Step Three: The interview. This is also a critical step and is often mishandled by employers. The interview should be an objective set of questions that relate to work in general as well as to the specific position offered. The questions should be the same for each candidate so that an objective comparison can be made. And consideration should be given to the psychology behind the answers. The interview is the candidate's opportunity to show his best side, not necessarily to reveal his shortcomings. So of the first questions the interviewer might ask is, "Did you have any trouble finding us today?" If applicants answer that they did, it may be an indication that they did not do their homework on where the firm is located. This leads to the second question, "Tell us what you know about our company."
What you hope to hear is that they visited your Web site, looked at other sources and formed a reasonable first impression about what your firm is and what it does. If not, if they indicate that they really do not know much or anything about the company, it should raise a red flag.
Some of the questions should explore hypothetical situations. For instance, an interviewer might ask, "If you know that your boss is 100% wrong about something, how would you handle the situation and what would you say to the boss?" The answer to questions like this may offer insight into the candidate's communication skills.
In asking such questions, look for more than just the verbal answers. Look at the non-verbal cues. Look for such cues as eye movement, pauses and even Adam's apple movement before or during a candidate's answer. According to studies, a jumping Adam's apple can reveal emotional anxiety, embarrassment or stress. During an interview, it may happen if the candidate dislikes or strongly disagrees with the interviewer's suggestion, perspective or point of view. One interesting source of information on this is the Center for Nonverbal Studies (http://center-for-nonverbal-studies.org).
A long-standing goal of nonverbal research has been to find reliable signs of deception. The quest is fueled by popular and scientific observations that deceit is often accompanied by unconscious signals revealing anxiety, stress or shame when a person is lying. Studies indicate that certain signs used when speaking (for instance, a look down or the rate of head and hand movements) do accompany lies. Care must be taken not to misread these signals, though, since an overly nervous candidate could produce similar symptoms.
It is important to recognize that no one method is going to give you the best profile of a candidate. All of the above sources of information need to be considered to provide the best verification of a candidate's qualifications and fit for a firm. And if the search is done methodically and consistently, the firm stands the highest likelihood of finding and retaining the right employee.
David L. Lawrence, Ph.D. is the Co-Founder and President of Global Practice Network, a technology and consulting firm that provides financial practices, broker-dealers and independent firms with comprehensive, profit-driven efficiency consulting, technology solutions and resources. For details, visit www.globalpracticenetwork.com.