Hiring For Cultural Fit: Why it’s Important and How to Go About It
Recently, I attended a talk on recruiting where the speaker asked the audience the following question: “What is the biggest cost for a company?” Most attendees answered “people” and then the speaker disapproved by saying “it’s not the people, it’s the WRONG PEOPLE”, who are not aligned with your company’s values and culture. His statement has stuck with me for a while now, and after writing my previous blog on integrating core values into your organization, I wanted to expand on that and discuss how core values affect the recruitment and selection process. In this blog, I will talk about why hiring cultural fit employees will benefit your organization and how to go about doing it.
According to a 2012 poll conducted by CareerBuilder, 41% of participating companies had experienced a cost of at least $25,000 per single bad hire, while 24% had incurred $50,000 for a single bad hire. The cost includes loss of productivity and time, cost to recruit and train new employee, and employee morale being affected. No matter how established your organization, bad hires negatively affect your organization. Another interesting data from the poll showed that 67% of employees were considered bad hires due to their ability to produce proper quality work (lack of competency and job fit), while 60% did not work well with other employees (lack cultural fit). This data clearly demonstrate the importance of hiring based on job fit and culture fit at the same time. Job fit refers to the degree the person hired can perform the responsibilities that the position requires while culture is how well an individual is compatible with the core values and norms of the organization.
Recruitment and selection process is slowly gravitating towards hiring based on core values (cultural fit) rather than technical competencies. One of the reasons for this trend may be attributed to Gen Y entering the labor market who typically stays at a job for about two years and prioritize meaningful work over pay as well as working for a company that is aligned with their own values. This means by clearly defining your organization’s values and integrating them in your organization, you are able to attract employees whose personal values are in alignment with yours. Your core values may also naturally screen out non cultural fit candidates who will not apply for the positions since they do not share the same values as your organization. Hiring using core values is very crucial for start-up companies; since they usually lack brand recognition and longevity, by clearly communicating the core values and culture, start-up companies are able to share their visions and dreams to potential candidates. Again, you want people who believe in your product, vision, and values because these are the employees who will be intrinsically motivated to work at full capacity towards your organization’s objectives.
Now that we have discussed the importance of hiring based on cultural fit and values, how do we integrate core values into the recruitment process? It’s easier said than done! According to a research paper conducted by Development Dimensions International (DDI), an international talent management company, 78% of respondents believe that organizations and hiring managers do not assess for culture fit because they do not know how to do this. Hiring based on core values can potentially create legal problems such as discrimination and facilitate biased decision making on who to hire as you may be asking candidates questions that tap into their private life. There are no defined steps on how to adjust your recruitment process using your core values; the following three suggestions are best practices that DDI proposes and which I find to be quite realistic to incorporate in any organizations:
- Describe the values in behavioral terms, and use behavioral-based questions to assess suitability. You can also identify the competencies related to the core values, and ask interviewees to provide situations where they demonstrate these competencies. According to DDI, behavioral questions are the most commonly used tool to assess candidates’ compatibility with the core values. For example, if one of your core values is passion, you may ask the candidates to provide a situation where they felt very strongly about a cause/issue/project, what steps they took to accomplish the objective and what was the end result. The premise of behavioral-based questions is that the past behaviors are a good predictor of future ones.
- Ensure that hiring managers are adequately trained in recruitment practices and assessing core values compatibility. Managers need to understand what they are looking for in a candidate, what the nature of the questions is, and more importantly how to interpret and evaluate the data. Managers also should be trained on avoiding biases during interviews. One bias that can hinder the recruitment process is the similar-to-me bias where the interviewer will tend to score a candidate higher if they share the same interests and background. It is important to train the managers to focus on the interviewee’s compatibility to the core values of the organization, and not the values of the managers.
- Use realistic job previews and/or “day in the life” profiles to help applicants have a better understanding on the culture and core values of your organization. By having current employees describe their positions and their responsibilities, potential candidates can evaluate their suitability with your organization. I have seen companies taking a step forward by having mini web interviews with their employees on describing what the core values mean to them and posting them to their career pages.
We have discussed why you should think about taking more of a culture-fit approach to your recruitment and selection process and three suggestions on how to integrate core values within your hiring procedure. The best practice is to combine both the traditional job-fit interview questions with your culture-fit questions; you want people in your organization to live and represent your core values, but you also need these people to be able to deliver results that will help you and your organization achieve your goals.