Be an Investor When Recruiting and Hiring
Who you hire is one of the most important decisions and investments you can make in your business. However, recruiting and hiring today is more important than finding a person with the right skills and qualifications. Do the candidates fit our culture and strategic vision? Do they share our values and have the right behaviors to make them successful and provide your company a long-term return? Will they still be around in 5 years? Warren Buffett is considered to be one of the most successful investors of all time and is currently the third wealthiest person in the world. Regardless of one’s opinion of the “Oracle of Omaha,” it is hard to argue with his amazing track record of success. As the Chairman and CEO of Berkshire Hathaway, Buffett has inspired millions, while making billions through a philosophy of investing that can also be applied to successful hiring practices in your business. Aside from utilizing financial ratios and other analytical tools to find undervalued companies he can invest in, there are other key considerations that Buffett and many other successful investors look for before making a decision. Never compromising on business quality, taking the long view, and listening to those you know and trust, to name a few hallmarks of Buffett’s investment strategy. Could thinking as an investor also be applied to hiring? After all, when recruiting and hiring a person to join your company, you are making a major investment. That same hire can often be critical for the future success of the company. Time, training, compensation, benefits and other “rewards” for the people you employ are your investments in growing your business and making a return. In today’s low-unemployment, low-retention “candidate’s market,” approaching recruiting and hiring as an investor may make the difference and lead to better decision-making in this critical area. Never Compromise on Quality “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett Berkshire Hathaway was originally a textile manufacturer when Buffett first took control in 1962. He later stated that entering the textile business was one of his worst trades ever but kept the name. That experience taught Buffett that “you get what you pay for.” He was no longer interested in buying something at a bargain in the hope of getting a nice short-term return, especially when the long-term prospects for the business look terrible. He chose a path of “value investing,” in which he looks for prices that are low compared to their actual or future worth and often overlooked by other investors. Never compromising on quality can also be applied to hiring. For example, Candidate A is a high-quality candidate that matches all of the skills, qualifications, experience, behaviors and cultural alignment needed for great success in the position. “A” checks off all of the boxes, has been thoroughly screened and you can see a bright long-term future. Candidate B also has many of the same skills and qualifications. “B’s” behaviors and culture fit were not as strong and the references not as glowing, nor was there a projected long-term future with the company. Here’s the kicker— “B” wants 20% less in salary than “A.” How many would automatically gravitate to Candidate B because they felt they were saving the company money or had to stick to a budget? Quality investments yield high returns and increase in value over time, similar to Candidate A in our example. How does this apply to value investing? Candidate B will inevitably cost the company more over time and return less due to low engagement, poor cultural fit and eventual turnover – in other words a lot more than the 20% saved in Candidate A’s compensation. As Buffett has stated, “Price is what you pay. Value is what you get.” Taking the Long View Once asked how long he would hold a high-quality investment he made at what was considered a reasonable price, Buffett answered, “Our favorite holding period is forever.” Embracing a “buy and hold” investment philosophy, many of his investments have been held for decades. Buffett and investors care more about the future price than the value it was on the day it was purchased. As a business leader, you should care more about what a new hire can bring you a few years into the future instead of having them be able to “hit the ground running” and automatically start making returns on day one. Look for those candidates who are quick learners and can innovatively solve problems. They are the ones that have the experience and behaviors that will help them integrate quickly into your company and excel in the future. Smart investors also continue to invest – just as companies need to keep investing in their people. While you may not have the budget to increase their compensation, look for other ways to invest in your new hires and current top talent and leadership. In a recent Udemy “Workplace Boredom Report,” 46% of employees are looking to leave their companies because of a lack of opportunity to learn new skills, and 80% agree that being given more opportunities to learn new skills would make them more interested and engaged in their work. Do you offer continuing education, seminars, training programs and other developmental programs that will keep your employees learning new skills? There is a measurable ROI to upskilling your employees, and often it is in the form of productivity gains, increased engagement, more profitability and reduced turnover. Listen to Those You Know and Trust “Management changes, like marital changes, are painful, time-consuming, and chancy.” – Warren Buffett Warren Buffett has always noted the importance of only investing in competent and trustworthy management teams. He knows that when he selects partners or managers, their actions and decisions will be felt for many years. As a business leader, you too must be cognizant of selecting competent and trustworthy people to join your organization. They could have a
Interview Preparation: It’s Pronounced “Du-Moss”
A hilarious A&W Root Beer commercial from the early 90s is also a cautionary tale. The commercial begins with a smiling, confident young man being interviewed for a job saying, “Mr. Dumbass, I can bring a lot to Dumbass and Dumbass. I’m a go-getter. Dumbass material all the way. So, am I your man Mr. Dumbass?” The look on his face is priceless as the interviewer states, “The name is Dumass [pronounced Du-Moss].” The commercial ends with the candidate leaving the office quickly past an admin with Mr. Dumass stating in disgust, “What a dumb ass!” Underscoring the commercial’s humor is the simple fact that the candidate didn’t properly prepare for the interview. There was an admin right there, he could have easily asked before the interview, “How do you pronounce Mr. Dumass’ last name?” A missed opportunity, but how many of us have interview stories in which we were not properly prepared? We either stumbled on questions about ourselves or didn’t have proper knowledge about the role or the company, and/or at the end of the interview, we said we had no questions, which is always a big red flag to the interviewer. There are 3 “Knows” that every candidate should have prepared before the interview: know yourself, know the company, and know what to ask. The A&W commercial was originally filmed in 1990 before the advent of the internet. Today, with the wealth of information available to candidates, there are simply no excuses. Know Yourself “By failing to prepare, you are preparing to fail.” ~ Benjamin Franklin The dreaded self-awareness questions. There are a few obligatory questions that are a part of nearly every interview. They may be phrased differently, or are asked in relation to company values, and often inserted and repeated in some way shape or form throughout the interview, but these are the ones you can usually expect (and are often used as ice breakers)… Tell me about yourself. This usually means “Why are you qualified for this job?” Prepare 1-2 minutes of your qualifications, and also discuss some of your passions to keep it real. Keep your answers concise and avoid any negativity about previous work experiences. What are your strengths? Modesty or humility is a great quality in a person, but generally has no place on a resume or in an interview. Think of abstract qualities that define you. For example, willing to work hard, loyal, and strong technical skills to name a few. What are your weaknesses? This question can often be intimidating, but be transparent (and don’t say you are a perfectionist, or you care too much— both are overused). Present your weaknesses in terms of professional strengths, for example, “Often I will work too hard and get too deep into a project to make sure it is done correctly and on time.” Evaluate yourself in terms of the position that is available. A good way to prepare for this type of question is to answer it by asking yourself the question: “Why should they offer me the job?” Can you see yourself resigning from your current job? It is a candidate’s market, and counteroffers are also increasing since companies are desperately trying to retain their people and limit turnover. Interviewers know this and will probe deeper to find out your intentions and to make sure you are not using it as a negotiating tool with your current employer. Be clear, concise and do not hesitate when asked the question, “Why do you wish to leave your current position?” What do you do during your non-work time? Use this as an opportunity to present yourself as a well-rounded person. If your answer is “work-work-work,” that could be a negative since workaholics are not always the best employees. Name hobbies, passions, and those things you like to do in your spare time. We have seen even successful sales and marketing professionals, with years of product and service sales experience, stumble on these very questions because they are the product. Thus, be prepared and know the answers to these questions before they are asked. Write them out to further craft and remember your responses. Know the Company There is nothing more irritating to an interviewer than a candidate who has not done advance research on their company. It is flat-out lazy and usually disqualifying. The days of interviewers taking time to explain their business and history to the candidate in the interview are long gone or severely limited because everything can now be found online. The interviewer, interview team, and recruiter will be doing due diligence on you, so you need to do your due diligence in researching the company. Company websites, annual reports, trade magazines, newspaper articles, Google, LinkedIn, Glassdoor (which can also provide insight into the company’s interview process), and more all offer a wealth of company information and industry statistics. Reach out to current employees (and connect with them on LinkedIn), talk to customers, and, if appropriate, competitors. Sometimes you will find information and intelligence that can go a long way in the interview. Know What to Ask We sometimes forget that interviews should be two-way conversations. It is important for the candidate to take an active role in the interview. Asking questions demonstrates your depth of experience in the field, your concern for the company, and your desire for the position, and can lead to a more positive overall interview experience. We have seen people nail the interview itself but when it comes time for the interviewer to ask them if they have any questions, they simply say “Nope. I’m good.” Big mistake. Many questions you can ask could be from the research you have done on the company in preparing for the interview. Questions could be on the future of the company (growth plans, vision, 5-year plan and goals); the position in relation to the company (why was the position created, why is it now empty, is this role critical to the success of the company, why