Hiring new talent – it pays to be diligent
Companies hire new senior talent to fuel corporate success. Too often it proves to be an expensive failure.
New data from Leadership IQ1 across a broad range of industries indicates that up to 48% of senior hires leave in their first 18 months and the life sciences industry is no better than any other.
Failure is expensive. First there is the opportunity cost of the ‘wrong’ person failing to achieve what you need them to do. Then there are the more measurable costs of hiring and employing them followed by their near-inevitable exit and the hire of the next, and hopefully more suitable, candidate. All of which adds up to a whacking 3.5 x salary for packages around $300,000 and even more for those higher up the corporate ladder with the true cost of a bad CEO hire coming out at over c25 times their annual salary.
These are staggering statistics but we need to deal with the problem, not think it will get better by itself. Hiring new talent is a business-critical decision and done in the right way, losing 48% of people within 18 months can be turned into a much more successful 88% retention rate. How?
Recruitment should be undertaken in the same way as any other strategic business decision, using evidence for hiring the chosen candidate and developing a precise on-boarding programme to enable them to deliver. In practice this means carrying out Due Diligence in the same way as if you were buying a company or another asset. You need to know who you are getting. There are two sides to this. Firstly and self-evidently you need to choose the right person. Secondly, you must understand them in every regard, their strengths and their weaknesses, so that when they join, you can support them in exactly the right way to enable them to achieve the goals you are setting for them.
Use evidence and focus on the right things
Most firms will readily agree that hiring is their key priority, but at the same time they treat it as a commodity activity with the lowest unit cost. These two things just don’t jive and often lead to failure.
Be scientific in your approach and ensure that the Due Diligence that you do on new people is as meticulous as you would for any business transaction. Think of your Due Diligence process as being similar to the journey your drug candidates go through in Preclinical, Clinical, Regulatory, Market Access and Commercialisation. Ensure that as part of your Due Diligence you perform a comparative analysis of the leading candidates and benchmark them against your own people to ensure that you are always ‘hiring up’. Gut feel or some nebulous reliance on ‘chemistry’ would not be sufficient proof in any other business decision.
Notably, the evidence from Leadership IQ’s study shows that: “contrary to popular belief, technical skills are not the primary reason why new hires fail; instead, poor interpersonal skills dominate the list, flaws which many of their managers admit were overlooked during the job interview process”. Of course people need to be technically competent and this is the easiest metric to assess during the interviewing process. However, it’s the softer aspects of the candidates’ personalities including coachability, emotional intelligence, motivation and temperament that are much more frequent contributors to people failing in their roles. The Due Diligence preceding the interview, the interview process and the interviewers’ skills all have to be honed to ensure that the skills assessment has the right focus.
On-boarding – no time to be careless
As you hire a more diverse workforce of new skills and talents, make sure that your organisation is set up to embrace and support those people. ‘On-board’ your new talent with precision, consciously and carefully in the confidence that you really ‘know’ who you have hired. Align your expectations, offer support from mentors and coaches, welcome change to bring in better performance and as you watch to see what your new hires can do in their first 100 days. Make sure that you do everything to connect them into the business, they’ll need a powerful network quickly and good on-boarding will facilitate this and make success more likely. High quality new talent is scarce in the life science sector and every business needs to map and hire the best talent available to reach the stretching targets being demanded of it. As Steve Jobs put it: “A small team of A+ players can run circles around a giant team of B and C players”