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Derailed by track records

In a competitive business environment, there is little more important to a company’s success than hiring the best employees. Just as it is with investment funds, however, an excellent track record does not always guarantee stellar future performance.

While organisations seek ways to ensure the employees they recruit will help them accomplish their business objectives, research conducted by recruitment firm Hudson suggests that employers could be paying too much attention to previous experience and overlooking other attributes.

Tony Pownall, general manager of Hudson Hong Kong, says using previous experience to predict future performance is at best hit and miss and often just plain unsuccessful.

“Our research shows us there is not a great deal of correlation between past performance and how successful people will be when they join another organisation,” he says.

“It is really quite scary when you look at job advertisements and see companies specifying years of experience, which has very little to do with whether or not the recruit will be a high or low performer.”

Pownall says that while no company sets out to recruit average performers, when Hudson asked companies to rate recent hires, 40 per cent said their talent acquisitions ranged from bad to average.

He believes the failure to meet expectations could lie in the recruitment process. “All too often the recruitment process discounts the skills that drive performance value,” he says. He suggests employers look beyond past performance and pay more attention to motivation, attitude, behaviour and cultural fit. “Employers often go down the experience route simply because they know the employee can do the job, but this will not necessarily lead to high performance” he says.

Simon Moylan, Hudson executive general manager (EGM) for talent management, Asia-Pacific, also believes employers need to adjust their mindset when hiring.

“When employers draw up their recruitment shopping list, they need to focus on getting the skill sets that are likely to deliver performance,” Moylan says. In a tight labour market, however, employers often choose experience over other attributes in the belief that experience equates to performance.

To help employers make better recruitment decisions, Moylan says Hudson has devised a framework using methodologies that incorporate performance-potential skill sets into the recruitment process. “Feedback tells us that when hiring is based on performance potential instead of experience, in almost every case, the recruitment-satisfaction rating rises to between good to excellent,” he says.

Stuart Hedley, managing director of global talent-measurement firm SHL Hong Kong, also believes companies are failing to hire and retain the best talent.

“Every organisation understands that talent is important for business success, but many don’t know if they have the right combination of skill sets,” he says. He adds that many organisations seem to have a better understanding of their office-equipment inventory than their talent inventory.

According to the Corporate Research Foundation (CRF), which provides comparative insights on HR policies and best practices, 60 per cent of organisations don’t have a talent-management strategy.

With hiring pressure unlikely to abate anytime soon, Hedley says CEOs need to look closely at their current talent pool and hiring practices. “Rather than hiring to fill positions or grow headcount, companies need to think about how fresh hires impart skills, knowledge and future leadership potential,” he says.

Employers should also not overlook recruiting based on attitude and motivation, as skills training can be provided later. “Companies need to identify how these people can add value to their businesses and fight with other organisations to attract and retain them,” Hedley says.

Citing a PricewaterhouseCoopers (PWC) CEO survey published earlier this year, Hedley says one in four CEOs say they are unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because of talent challenges. One in three is also concerned that skills shortages will have an impact on their company’s ability to innovate.

To help resolve some of the challenges companies face with hiring and retention, Hedley believes talent-management tools such as analytics can provide solutions. “Using analytics can help companies pinpoint talent-acquisition insights and talent-ability strategies,” he says. He adds that analytic tools have the ability to identify leadership and performance potential across the talent pool.

“There is a lot of useful internal and external data that can be used to help companies make informed decisions around their hiring processes and get the best performance from their people,” he says.