How to Avoid Bad Hires

What do you look for when hiring a new employee? How do you find the ideal person? The Internet and personality profiling are two ways to find that team player. Jud: Let's start off with a couple of questions. How do you avoid bad hires? Describe, to start, with your recruiting process. Mark R.: The way we look at most things is that almost everything is a process.

March 31, 2007

Jud Motsenbocker
Contributing Editor

What do you look for when hiring a new employee? How do you find the ideal person? The Internet and personality profiling are two ways to find that team player.

Jud: Let's start off with a couple of questions. How do you avoid bad hires? Describe, to start, with your recruiting process.

Mark R.: The way we look at most things is that almost everything is a process. Years ago, we stopped looking at recruitment in the traditional method. We realized that we had developed a fairly effective sales process when it came to homeowners and clients. We essentially developed or translated the same processes from our consumer sales process in working with potential employees. It starts with getting the phone to ring, and we try to create some pretty compelling ways to get the phone to ring via a lot of the traditional methods. Once we get the phone to ring we do a qualifying conversation over the phone. We always have them come into the office for an interview, regardless of what the position is. We have a director of recruitment who takes them through a tour of the office to share the company story and talk about the position. Then, we move toward trying to see if it's a nice fit.

Jud: Mark Scott, what's your process?

Mark S.: Not nearly as defined. In good times, we'll run ads in the paper from time to time. In less frenetic times, we actually get a fair number of requests to come work for us. We have a similar screening in the beginning. The biggest qualifier for us is that early on we'll do a background check. That probably screens out about 40 percent of those who apply.

Jud: Mark Richardson, do you do background checks?

Mark R.: Yes, we do as well.

Jud: That was another question down the road. Mark Richardson, your comment was that you have a system in place to hire people. Is that a fair statement?

Mark Richardson, Owner
Case Design/Remodeling

Mark R.: Absolutely. I think, in general, the more things you can figure out in a process system, the more you can make it predictable. If you can make something predictable the outcome is going to be what you want it to be. It's not so much of a gambling exercise.

Jud: Mark Scott, you don't have as detailed a system as Mark Richardson.

Mark S.: As far as recruiting, no.

Jud: You probably have a "we've done it that way before" attitude on some things. Would that be a fair statement?

Mark S.: Yes. This past year we had an employee specifically set up a document of standard operating procedures for the whole company. We're just starting to implement all of that.

Jud: Mark Scott, do you have job descriptions for these positions?

Mark S.: Yes. We have fairly specific job descriptions for each one. Like Mark Richardson, once a person gets through a couple of levels of interviews, we do personality profiles. That tells me more who will not fit rather than who will necessarily be successful. They go through several layers of interviews with different people. All of our supervisors are collectively hired by several of the other supervisors.

Jud: You do a multi-interview system.

Mark S.: Correct.

Jud: Mark Richardson, job descriptions?

Mark R.: We do have job descriptions. We also have found that it's critical for any person to interview with at least two people. Some positions require more cross-interviews with as many as half a dozen different people. We also use the McQuaig system. It's more of a personality profile. As Mark said, that really helps to see if the person has the right disposition for the position. In sales, are they competitive enough? In the field, are the detailed enough? If they are more of a customer service "people" type person, how are they going to approach that? I think that utilizing some of these tools really helps you to not necessarily determine who's the best, but it helps to determine who won't work in that role.

Jud: Let me give you kind of a scenario here. If you were looking for, say, a production manager and it could be anybody. If this person came to you with great credentials, but you don't think he fits your team. Do you try to hire on a "team" basis? In other words, if he doesn't really fit the team, "I don't care how good a production manager he is, I'm not going to hire him." Do you have any kind of relationship in this selection process like that,

Mark Scott, Owner
Mark IV Builders

Mark S.: It's become one of the main criteria for us. If you're not going to fit the team, it doesn't matter what your skills are. Another thing is that the Washington area, as big as it is, is still a fairly small building community. Most of us know each other. Most of us pay a lot of attention and know what everybody's doing and know enough about each other's idiosyncrasies. We know what kind of personality is going to fit over time. I probably get one call a month from a competitor who's looking at so-an-so who I may or may not know about. Inevitably, I'll say, "Yes, I know this guy, these are his strengths and these are his weaknesses. From what I know about you, he's probably not a fit for your business." Invariably, they hire him!

Mark R.: I think there are several elements of it. We always ask ourselves three questions. I was at a seminar many years ago, heard these questions, and it's become part of our mantra in our culture. The first question is, can they do the job? That's about competency. Second, will they do the job? That is about work ethic and attitude. And third is, do they fit? You've got to have a "Yes" answer to all of those. If they're not a fit, the first thing we look at is, "Is this real or Memorex?" Often times, if they can do the job and will do the job but don't fit, we'll then say is there another pair of eyes we need to get for a second opinion? Or a third or fourth pair of eyes. Because of our scale, we're also looking for other "seats on the bus" potentially for them. For example, you might have a carpenter who is not really a team player, but he may be an extremely competent back craftsman, working by himself, very detail-oriented. We have a little bit of luxury in that we can oftentimes take a person that is not necessarily quite the ideal fit for one team, but maybe find another opportunity if we're really enthused about him.

Jud: That's a good point. Gentlemen, do you look at it differently if you're hiring salespeople compared to field people?

Mark S.: Absolutely. I need to become more systematic in the way I deal with sales people. We have a much stronger production culture than sales. Because we don't have as many sales people, I tried lots of different things a couple of years ago. I tried a car salesman just to see if that different personality would work well. It was pretty much an absolute failure! I knew I was taking a flyer when I did it.

Jud: Mark Richardson, is there a difference between sales and field people when you hire?

Mark R.: Absolutely. Again, I think that's where some of the personality profiles come in. It really sort of highlights itself. Usually, with a salesperson, they will not be successful in sales or at least be a "top gun" unless they're relatively competitive. Sometimes you can't tell how competitive someone is until you take a profile. The other thing about a salesperson is that they need a sense of urgency. They need that edge. In sales, the difference between yes and no is often times 1 or 2 percent. Successful salespeople have that sense of urgency. They're not too complacent or very relaxed. We want that kind of personality. Mark brought this up before. With the personality testing, you can determine not necessarily who's going to be successful but who's going to fail. It's a numbers game. If I have 10 prospects out there, I can reduce the odds to picking the right one out of five rather than the right one out of 10, I'm much more likely to be successful.

Jud: You've both talked about this personality profile. I'm taking it for granted, because you've both talked about it and both do it, that as far as you're concerned it's one of the key elements in hiring people. You can "fit them." Is that a good statement, Mark Scott?

Mark S.: I've spent a few years fighting the personality profiles. I didn't like the idea that you can ask me 40 questions and tell me about myself. I didn't want to be that predictable. The fact is, you are and so am I! It really does work. I've learned over the years that I have to depend on it. It's a pretty accurate predictor. The process I use is called DiSC. It measures both your adaptive and your natural style. I see what someone is naturally and what they try to be in their business. If I see a whole lot of shifts between those two, I'll tend not to hire them, because they're trying to be someone they're not. They are unlikely to flourish.

Jud: Mark Richardson, could you comment on that?

Mark R.: I think that there are certain roles in which personality profiles are especially effective. I think when it comes to management, leadership and sales roles, it is essential in my mind that you have something like that. When it comes to, let's say, a field member, I don't think it's quite as critical. That doesn't mean that they're not as critical, it's just that you're going to get more false positives when it comes to field members than, say, some of these other positions. For some positions it's essential.

Jud: Give me an idea of how much money you've spent on each one of those. Is it $175 per person or more?

Mark R.: There are different systems, as Mark said. We use a system called McQuaig. We actually license the product on a national basis. Truthfully, I don't know how much we spend. We not only pick up the cost here, but at all of our offices around the country. It's not as much as you'd think. It's thousands of dollars for us, but not hundreds of thousands.

Jud: Mark Scott, do you have any answers about cost?

Mark S.: It can vary. A real simple one may be $75 to $200.

Jud: The reason I wanted to put that in there was to indicate that this is not a real expensive deal for what you end up getting out of it. I thought we ought to bring that out at this point.

Mark R.: I would probably go by Mark Scott's numbers. Because of our size, it can be misleading.

Jud: Yes. Yours is totally different. Mark Scott's got a better handle on it because they do it on an individual basis. With the ones that I do, that's the kind of number we're in depending on what we ask for.

Mark S.: One of the biggest things we do as a qualifier is if we're at all serious about someone, we give them two people to talk to in the field. We pretty much expect them to go out and see them. If they don't go out to see those supers, they're not even in the running. They're not willing to do a little bit of "homework."

Jud: Even on the sales side?

Mark S.: Yes. Everybody.

Jud: Interesting. Where and how do you find good candidates?

Mark S.: Most of the good ones come to us through knowing one of our employees, or come to us by reputation.

Jud: Very little from the standpoint of ads in the paper and that type of thing?

Mark S.: There are some from the paper, but the stronger are the direct referrals.

Mark R.: Earlier Mark Scott made a comment that how you find someone can vary dramatically based on the environment. We happen to be in an environment with a little bit of softening that it's very easy to find "A-Level" players. We had, in the Washington area and in different parts of the country, say two or three years ago, been in remodeling environments where it was much more difficult to find even a "B-Level" player. My comment and advice is that you've got to be light of foot and you've got to approach how you find people differently depending upon what the environment is. Right now, all around the country there are a lot of very small remodeling companies that are saying, "I surrender, I give up." They can make wonderful team members to join your company, whereas in the past, that wasn't the case. There are a lot of traditional methods. The internet is certainly a much better source than it ever was for all levels of employees; also the newspaper and, as Mark brought up, the personal referrals and word of mouth. We give incentives to employees to bring on folks in certain environments. We try to use our own team to get out there and recruit because they're going to see some benefits for themselves.

Jud: Mark Richardson, are you always looking for new employees?

Mark R.: I would say yes. I got a call yesterday for a role that we don't need anyone in, and we're interviewing them tomorrow. We're always looking for and listening for talent. We're trying to have a little team set up so that they can pull in those folks when we're ready.

Jud: Mark Scott, are you always looking for employees?

Mark S.: Certainly the stock answer is yes. But right now, I'm less likely to hire someone for a job I don't have. But if they're a strong enough candidate, there are people out there that I would really seriously look at were they to become available. Yes, I am always looking; we all are.

Jud: I think that's a good point. In the seminars that I've been in there's the theme of "keep looking." You never know when that perfect employee is going to be available. Let me ask you: if you had to describe the "perfect applicant," the applicant you're really looking for, what might that be like? What are some of the characteristics that might make you feel that this is a No.1? We all qualify leads and say "This is a No. 1 lead or a No. 2 lead." What are some of those criteria?

Mark S.: Over time, we've figured out that most of our really strong employees have a supporter component to their personality — that they're team players. That's probably the strongest issue. I need some strong dominant skills in the field, good "people to people." A comment that always stuck with me was Lee Iacocca saying, "The kiss of death at Ford was to hear someone say, "That person is not a people person."

Jud: Mark Richardson?

Mark R.: I think I'm understanding your question, Jud, slightly differently: How would one approach us, and we give them an "A" grade in terms of how they approach us. I would say that No. 1, they are prepared. Someone who comes in on time, prepared for the interview and meeting and have done research on the company, talked to some of the suppliers. They don't come in thinking "this is just a job." They are looking at it as an opportunity and career. For us to have to sit down and explain the fact that we design buildings, kitchens and baths, when all those things are at their fingertips is a little bit disheartening. The second thing would be, are they really committed? We need committed folks. We don't want to be the flavor of the month in terms of position. They're prepared not only in terms of knowing about the company, but also prepared in asking really intelligent questions — questions that aren't just about wage and benefits, questions about, "Once I do this, what's the next opportunity for me, potentially, in the future?" They're not like a deer in the headlights when we ask them some fundamental questions, and act like they've never thought about it or heard about it before. I'd say, committed, prepared, "laser focused." They're not distracted about having to get to their next interview that day.

the discussion continues...

Jud: These are all good points that we need to bring out. One of the things that we look at here is that when somebody comes in from out of town having to move back to our community because their parents are here, or for some reason they need to move back, and if they have the skill level, we'll put them a little higher on the list. They're coming in to the community and aren't just moving around in the community. We found that to be some kind of mark. I suppose out there on the east coast where you are, you've got to find some of that going on. Is that true, Mark Scott?

Mark S.: Yes. Like Mark said, if you've done your homework, you're a huge step above the normal people who are coming in to interview.

Mark R.: I would say that that is at least an indication of potentially a little bit more skin in the game. A little more commitment. If I were an interviewee, I wouldn't be too impressed by all that, because, truthfully, they might have been kicked out of their other town. Or, their spouse had a great job and they're just following their spouse. You've got to really drill into the why as much as anything else.

Jud: Gentlemen, who conducts the interview and in what order?

Mark S.: Generally, the first interview is a telephone interview with either my production manager or my office manager.

If that discussion goes well, the prospective employee is asked to go out and meet one of the supers on site. Again, if they're not willing to do that or if there's no follow up, that's the end of it. Then they'll come in and meet with one or two of the supers as a team. A team discussion lasts anywhere from 30 minutes to an hour. After that, it will be a face to face with Andy, the production manager. At that time, we'll do some testing, knowledge testing and such. We use of a modified version of Tim Fowler's carpenter tests and things like that. That's always a big separator. We actually take it down to "OK, you say you're a carpenter; now prove it." I am always surprised at how many people fall away at that point.

Mark R.: We approach it probably as much akin to the sales process as anything. We have an interview over the phone with our director of recruitment. That conversation averages about 20 minutes over the phone. If that interview plays out the way we'd like, we invite them to come in for more of a face-to-face. Again, it's still with the director of recruitment at that point. Assuming it meets that next screen or filter, we actually introduce him then to the person that he or she would be reporting to. We give, similar to Mark, a series of different tests, whether they're carpenters' tests or personality profiles or background checks. Then, assuming they meet those screens, we follow up with further interviews, and ultimately, we close it just like you'd close a remodeling project with a letter of intent and have them sign off on it.

Jud: Mark Richardson, you also do skill testing as well as personality testing.

Mark R.: Yes. Many years ago we used to have all carpenters build a saw horse. Somehow, building a sawhorse was one of these make-it-or-break-it tests to know how to build one or have the skills. We don't do that anymore for insurance reasons more than anything else. Our director of recruitment will actually walk the candidate back to their van or vehicle to take a look at it. It is very normal for a lot of interviewees to talk a good game, but in reality, they have an old Skil saw and hammer and that's about their only tools. [Mark S. laughs]

Jud: Why are you laughing, Mark?

Mark S.: They show up with a bunch of tools, which still have the price sticker on them!

Mark R.: Still in the Home Depot bag.

Jud: I take a little different approach. I always say that I take my candidates and walk them out to their vehicle so I can see the vehicle, yes, to check their tools, but more than that; if they can't keep their vehicle neat, clean and orderly, how are they going to keep my job site that way?

Mark R.: There's a lot you can tell by walking the person out. If they don't have a vehicle and came in on a bus, that's telling you something, too!

Jud: Mark Scott, do you prepare a list of questions for any of the interviews?

Mark S.: Yes. It tends to be the flavor of the month. I don't do much of the interviewing anymore, so I don't know what the hot buttons are now. We try to script it out in some fashion.

Jud: Mark Richardson, do you put a list of questions together?

Mark R.: Yes. We have it documented. Like Mark, I don't actually do it, so I can't tell you exactly what they are. But it's a fairly normal set of questions that the director of recruitment filters out. We have a document of what the person said so we can communicate with each other.

Jud: I would say those questions are written so that they are open-ended questions. Is that a fair statement, Mark Richardson?

Mark R.: Yes.

Mark S.: Yes, that's pretty standard. One of the other things we'll do is an "expectations" kind of question or set of questions. It's just a one-page thing. A list: if you can do layouts, you'll list it as 1 — 5, very capable of performing this task, or I can supervise and check the work but I'm not able to perform it myself, or I can't perform it or supervise it.

Jud: Interesting! Mark Scott, who has the final say for the hire?

Mark S.: My production manager, Andy.

Jud: What about on the sales side?

Mark S.: Me.

Jud: You would have?

Mark S.: Yes.

Jud: Mark Richardson, who has the final say in your operation?

Mark R.: Because of the scale, it's a little different. I would say that because of our process it's not so much of a final say as it is they either passed the test or didn't pass the test. It's the immediate supervisor, the project manager or the director of sales that would make the final decision. It's more of a process than it is a subjective decision by a particular individual.

Jud: Let me just expand that a little bit. Mark Richardson, in this particular case, is there going to be a meeting of two, three or four people to discuss this candidate before he gets a letter of intent?

Mark R.: Yes.

Jud: So, in that particular case, it's not one particular person who says, "This is it."

Mark R.: Right.

Jud: Mark Scott, do you have that meeting?

Mark S.: All our field supervisors are hired by the field team.

Jud: Mark Richardson, give me a red flag that flies up and says, "Wrong, this is not the answer."

Mark R.: Are you talking about a red flag for any position?

Jud: Yes, for probably any position. We'll try to do this general, but if you want to separate them go ahead.

Mark R.: I think there are obviously certain things that are going to pop out in the background check. As you all know the nature of our work is in people's homes, therefore, right or wrong, we can't be too tolerant with a shaky background. The second thing is, when it comes to a salesperson, if they talk too much, we don't like it at all. It's probably more of an orange flag than red, but for me at least that's what ends it fairly quickly. We want folks that can listen, not talk.

Jud: A big red flag is the background check.

Mark R.: Yes. Again, I get back to the three questions. Can they do the job? It's about competency and experience. It's about work ethic. We'll ask a lot of questions. Sometimes you cross the technical/HR line. There are a lot of questions about what they did in the summer as a kid. Talk to us a little bit about a typical weekend. If their focus is more with the poor work ethic or poor attitude, it's probably not going to be very positive. The other things we look at is if they jump from job to job a lot. That's a major or at least orange flag. That's never a good sign. I think any good company is looking for folks who are going to be with them for a long period of time.

Jud: Mark Scott, did you think of anything that jumps out at you?

Mark S.: A lot along the same lines. I'm 53 now, and if I see a lot of job-hopping, I know I'm not supposed to really look at that, but they've got to sell me better than they ever would otherwise. The background check has become a pretty big deal for me. If they've got some violent history, they're gone, they don't have a chance. I can't take that risk with a client, putting someone like that in a client's home.

Jud: That's a good point. As both of you have said, we're dealing with somebody's home. Gentlemen, in your background check, does that also include driver license check and drug testing?

Mark S.: Not drug testing.

Mark R.: Yes.

Jud: That can throw some red flags too, is that not correct, Mark Richardson?

Mark R.: Yes. We do random drug testing throughout the whole company. It's unfortunate at times, but even with a long-standing employee, it pops up. You just have to determine to live with it. Overall it's what we do.

Jud: We're trying to avoid bad hires. In regard to that, give me any other tip to prevent the bad hire. Mark Scott, anything else you can think of that we haven't covered to try to prevent a bad hire.

Mark S.: The biggest thing that I always struggle with is getting the personal references, and then even when I get those, if I really like the person, I'll tend to try and overlook those things. Over time, I've learned that I can't; I need to listen to my friends, my fellow remodeling owners. If they say someone is not a good fit for my company, no matter how badly I need that person or need that position filled, I know that over time, if I go ahead and hire him anyway, I've made a mistake.

Jud: So, Mark Scott, "Follow the system!"

Mark S.: Yes.

Jud: Mark Richardson, anything else?

Mark R.: The one thing that I have not mentioned, which I think is a little philosophical but very important, is if someone fails, it's either a bad hire or bad training almost all the time. If you convey that culture within those who are making these decisions — it's either bad hire or bad training — in both cases it's your fault if it doesn't work out. I think there is a level of accountability and ownership that's very different than, say, if you buy a car and it doesn't work out; you buy another car. We convey that, and I put a lot of weight on the person or the process making the decision and what went wrong in the process if someone doesn't work out.

Jud: With that comment, Mark Richardson, your point might be also that you tried to review the system if something hasn't worked out and try to correct that for the next time.

Mark R.: Exactly. We had a person who did not work out recently who was in sales. I went back to the process, and it was very clear where the process broke down with this particular individual. It happened to be a guy where in the interviewing process there were some red flags, and I don't think they were played out and resolved; it was a bad hire. In some cases, as I've said, it's bad training. Training is essential to growth and the growth of people as well as the company. If someone doesn't work out, it often time is the way you approach their learning curve and their training as well.

Jud: I think that's a good point that we've got to make here. If someone doesn't work out, you can't always blame it on them. You need to go back and look at the system. Is that a fair statement, Mark Scott?

Mark S.: Yes, but you can't blame yourself all the time either. There are some people who just aren't willing to do what's required of them. I've become more "Republican" in my views about it in the last few years. If someone's not willing to put some skin in the game.

Mark R.: In a really extensive process, can't you sort that through?

Mark S.: In hindsight, you can always sort that through. In the initial, I'm not sure I agree.

Jud: I always look at the theory, I can always put the fire out, but I want to find out what caused the fire. I think it's in the same system here. If I get a bad hire, I want to know why. And, you both may have good points here. Maybe you didn't find it, maybe your system is OK, and it's someone who realistically failed. On the other hand, did I in fact do everything I could to try to eliminate that? Would you buy that, Mark Richardson?

Mark R.: Yes. Again, hiring, all this is a numbers game. It's all about reducing risks. Mark talked about this before with respect to the personality profile. I think the same thing holds true with the overall process. Having hired hundreds of folks over the years, I would truthfully say that 90 percent of the time it was either bad hire or bad training. Only 10 percent of the time it's because of some unusual thing that happened with the individual. I'm talking about the people who don't work out after say six months or a year. I'm not talking about the five-year or more employee.

Jud: Gentlemen, I think we've covered the area pretty well. Thanks for your insight.


 

Mark Richardson, Owner, Case Design/Remodeling

Case Design/Remodeling in Bethesda, Md., has a local business that does about $50 million a year. It also has a national business, Case Handyman and Remodeling, with three divisions: Kitchen and Bath, Design/Build and Handyman. The national business covers 180 territories across the country. The local business has approximately 300 employees, two-thirds of which are field employees. www.casedesign.com

Mark Scott, Owner, Mark IV Builders

Mark IV Builders is a 19-year old design/build company located in Bethesda, Md., whose projects cover parts of Washington, D.C.; Montgomery County, Md.; Arlington County, Va.; and Fairfax County, Va. The firm does about 20 projects a year and typically bills between $4 million to $5 million per year. Sixty percent of their 22 employees are in the field.

www.markivbuilders.com

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