Hiring Well Improves the Bottom Line

Key skills are essential for business leaders as the economy picks up.

One of the most important skills required of any CEO or manager is the process of identifying, interviewing, acquiring, training, and managing a company’s human capital. Paramount to business success, hiring is an expensive process — so the fewer the mistakes, the better.

As our economy starts to grow, it’s time for business leaders to dust off their hiring skills. At Vistage Michigan in Ann Arbor, a top chief executive leadership organization, we have found that four core hiring factors apply across all types of organizations, whether manufacturing, service, distribution, or nonprofit. They are:

Talent. It doesn’t pay to stretch. Be sure to interview candidates who match the talent level required. Is it a chief engineer’s position or an entry-level one, an accounting supervisor or a senior bookkeeper, a sales position or a sales management position?

During the interview process, look for candidates to reveal how talented they are in several modes of expression. It starts the moment someone walks through the door. Notice how they carry themselves. When they speak, are they articulate, do they use proper verb tenses, do they use complex sentences or simple ones?

Once you know the candidate is “in the ball park,” you might feign an interruption and request a spontaneous written assignment: Why does this person think they are a great fit for the job? Or you might pose a straightforward question about a potential problem related to their job classification. With computers and the Internet so handy in any typical interview room, this can be a quick research and writing assignment. Specific answers aren’t as important as the candidate’s thought process, how they handle the challenge, and how they verbalize their solution.

It’s also valuable to assess a candidate’s impromptu abilities. A great way to discover this is to bring the prospective hire before the intended work group. They can be asked to tell the group what they have learned about the company that day, how they believe they are a good fit for the position, and what steps they would take to accomplish their intended job objectives. Because almost anyone in a higher-level position — a chief engineer, a vice president, or an account executive — will have to interact with the public, a person’s ability to quickly adapt to his or her surroundings is a valuable talent to possess.

Experience. This should be a separate interview, conducted by a different person in the company. Experience is what is required to get the new job done. I suggest that interviewers discuss one or two areas critical to the specific job the individual is seeking. Then, search for an understanding of how the candidate believes he or she will fit within their prospective performance team.


The interview process should be backed by customary background, academic, and work experience reviews performed by a human resource team. Let’s face it —we’ve all seen less-than-candid resumés.

Culture. This behavioral issue concerns how well the candidate fits the nonquantitative demands of a job. For example, it takes a different mentality and character for sales as opposed to engineering, or for supervising others versus working at a basically independent, technical task. Who a candidate is as a person needs to match what skills that individual needs to get the job done.

Time span. Every role within an organization will have a specific time period required to accomplish established goals. This often varies with the discipline involved — creative, analytical, or managerial. For example, the time it takes a CEO — who should command a vision of where an organization is going and what it will take to get there — to reach a targeted goal may be five to 10 years. But at the vice president level, setting a vision and reaching a target may require just one to three years of planning and implementation before it is accomplished.

And, lest we forget, if you hire, you must also sometimes fire. This is the reality of being a leader and running a business. Beyond the mandate to fulfill all regulatory or anti-discrimination regulations, CEOs need to approach firing with the same discipline applied to hiring.

Because human capital can easily account for up to half of a company’s total business expenses, a lost employee costs more than conventionally thought.

To put it in a quantitative form, the cost of a departing worker amounts to seven times their salary — whether they’re terminated or they choose to leave the organization. That is expensive no matter how you look at it. So it makes sense to pay close attention to how and whom you hire.

Less disruption and greater profitability result when we use the proper skills to articulate the roles and responsibilities that must be fulfilled in an organization, while identifying and retaining those “keepers” that drive the road to success.