Wednesday, October 18, 2017

Sweet Potato Fries and the Truth About Intuition

I was sitting with John Wentworth, president of The Wentworth Company/Wentworth Recruiting. We were down the street from his office at an eclectic, to say the least, restaurant, the Beach City Grill. John was on a rant again.


The good part was that he could not eat and talk at the same time, so I was able to dominate the pile of sweet potato fries between us as he dominated the conversation.


“It’s so clear!”


“What’s that?” I asked between mouthfuls, only half caring what he was talking about.


“What goes out the door, a company’s service or product, is the result of a pile of tasks having been done. If the service or product is good, the tasks have been done correctly, in sequence and on-time.”


“Agreed.” I licked the red pepper off of my fingers.


“So you have to hire people who can do the tasks in sequence, correctly and on-time. First you find them. Then you investigate them. Then you select the one you think can do this.”


“An important choice,” I said, taking a particularly fat and scrumptious fry off of the platter.

“Yes!” said John. “But here’s the problem. Given how they pick, most managers could just as well flip a coin. They make bad hires as often as they make good hires.”


“Not to hear them talk. I know lots of people who are pretty sure that they are great people pickers.”


“Me, too, and it actually has a name: the Dunning-Kruger effect. People who have illusions of superiority regarding their performance, including picking employees, have Dunning-Kruger.”


“Who knew?”


“It gets worse,” John said. While he waited for me to ask how, he scarfed a handful of fries. I didn’t ask. He took another handful.


But there was no stopping him. “They may have had a mentor who bragged about how she could know how someone would be on the job by just having lunch with them. It’s really intuition and unreliable. So the young manager wants to be like her mentor and selects new employees on intuition. Then, that person can have “hindsight bias”. She forgets all the people who bombed out and only remembers the stars. So now she is sure she’s replicated her mentor’s eagle eye for employees.”


“But neither picked well, in fact.”


“That would be correct.”


“Fun changing that behavior.”


“It hard, but it’s crucial if you want to hire the right people. Intuitive decisions are about half as good as data driven decisions. Researchers point out again and again that there is 50-100 years’ worth of research that agrees on this. If someone debates this, they don’t know much about the subject.”


“Why is it so hard to change decision making behavior? People can read these studies. Why do they ignore them?” I asked.


“People are not naturally rational all the time. One guy who studied this, Peter Ditto, PhD, wrote that, ‘People are capable of being thoughtful and rational, but our wishes, hopes, fears and motivations often tip the scales to make us more likely to accept something as true if it supports what we want to believe.’


“He was describing what’s known as ‘motivated reasoning’. That’s why people hire people like them or who share their beliefs. They think these people do better generally, so they ignore the facts about an individual’s skills and hire him or her.”


“So what’s the solution?”


“The solution is first, to use the ‘fog of recruiting’ to your advantage.” “What’s the ‘fog of recruiting’?”


“It’s like the ‘fog of war’. Too much ambiguous information. Too hard to sort out. Most hiring managers look at a pile of resumes and don’t know which differences between them are important for predicting good job behavior and which are not.


“The literature tells us to break a job into parts and form interview questions around each of the parts. Then ask every candidate for the same information, using the same questions.” “Sounds like a prescription for being really boring.”


“It does not need to be. You can do this in a chatty and very personal way. You just need to get the same information from each person, rate it the same, and then interpret the ratings the same way. Apples to apples. This consistency works best if the ratings are quantitative but supported by narrative.


“Then you need to display or convey the candidate profiles so they are easily digestible by a hiring manager who is busy and distracted. And the finalists should all be really good candidates, so the hiring manager can, in the worst case, make all the hiring errors known to science, and still get a good hire.


“Science tells us that six pieces of information about the candidates are enough, but it also tells us that hiring managers find more information comforting. We want them to buy into the rational system so they hire the best, so we want to show them enough data that they feel the process is reliable and comfortable.”


“A little Barnum and Bailey, no?”


“Yes. If the hiring manager does not embrace the system that helps them pick the best people, then it’s all a waste of time. So I’m happy to throw a little mind candy at them. Another tool is to frame the candidate ratings as a decision support tool that informs the decision. You don’t want to tell the hiring manager that she or he must hire the top score candidate. They won’t. They will rebel.”


There was a pause and the sweet potato fries were gone, so I figured I may as well summarize.

“So you deconstruct the job into parts, get information from every candidate for a job about those parts, interpret the information the same way for each candidate, have enough job parts that the hiring manager feels the process is robust and legitimate, and then present the information clearly and vividly and as guidance not a mandate. This is not how recruiting is usually done.”


“You are correct and that’s why most hiring does not deliver a superior workforce,” John said. “Those who use this process usually do get a superior workforce and all the good stuff that comes with it like employee stability and high performance. In fact, I know one organization that uses the scores to this method and almost 90% of their hires exceed what the hiring managers consider ‘qualified’.”


“Wow,” I said.


John smiled.


“You buying?” I asked. I had no expectation of actually getting him to pay. The waitress overheard me, grinned, and handed me the check.

Thursday, September 28, 2017

THINK ON RECRUITING WITH JOHN WENTWORTH

 #1 in the series
AI, RECRUITING, SELECTION AND TRIANGLES
John Wentworth, the founder of Wentworth Recruiting, and I were having lunch at Beach City Grill.  Obviously a regular at this local San Pedro establishment, John didn’t even pick up the menu. While I was focused on what would best feed my midday growling stomach, he was having one of his nutty professor days. “It’s all about two triangles,” he muttered.

“What are you talking about?” I asked, still thinking about my lunch.

“Oh, sorry,” he said.  “I’ve been thinking about how recruiting automation has missed the mark.”


“Explanation, please,” I said without looking up from my menu. He could be so frustrating.

He started scribbling on a piece of paper.  “Look at this.  Most of what’s automated with applicant tracking systems is administrative: when did the candidate apply, contact info, first screening, salary expectations, etc.  That’s all important for managing the function and for compliance, but none of it has to do with delivering the very best possible candidates to the hiring manager.  The actions that deliver the best possible candidates are either not automated or automated inadequately.  They got lost in the rush to make the recruiters’ lives easier.

“They are missing the most important part of recruiting.”

“Which is delivering the very best candidates possible?” I asked.

“Yes.  For many recruiters, their secret goal is to put butts in the seats, not to deliver the very best candidates possible.  It’s how they get measured, sadly.  It’s how they get raises.”

“The employment of a sub-par workforce starts with the recruiter who lets adequate but marginal candidates in the front door and lets them go forward to the hiring manager.”

“I get that,” I said.  “Not knowing how to select the best candidates, hiring managers pick the candidates they like, or the best of what’s provided to them even if what's provided to them is lousy.”

“It’s on the recruiters,” John said again, repeating himself.  He was getting wound up. “It’s their obligation to put forward only the best possible candidates so the hiring manager can hire any of the pool and still get a great employee.  Recruiters rarely can do it on their own.  They need help.  Artificial Intelligence is supposed to save them.  But Artificial Intelligence can only help so much.” 
He pushed piece of paper at me.  He had drawn another triangle.

“What’s that other triangle?”

“It shows the limits of Artificial Intelligence.  AI does a great job of hitting the problem with a 2x4, but good selection needs a scalpel, not a big piece of wood.”

“Help me understand.”

“AI can look at information and patterns, but only makes sense of some patterns, not others.   Let’s say that AI sees that a candidate had the right titles and that the titles have grown over the years through promotions.  That means one thing if her employers were all about the same size as your company is.  She probably has the skills for your job.  However, it means something else if her early career employers were bigger than your company and had gotten smaller than your company over the years.  Has she been out of her depth on her jobs, needing to go to successively smaller companies with less complex jobs?  Is she too light for your open job?  Probably.  Can AI recognize that?  Probably not today.  Maybe in the future when it can tap into a directory of every company in the world and is told to compare the size of the employer to the companies on the resume, and how to interpret those data.

Here’s another example; what if your candidate inherited some money and was only interested in working for a few more years, but had not mentioned that?  Do you think AI will be able to pick that up?  A personality instrument that measured ambition could give you a clue, but AI probably would not.   Do you think the candidate’s ‘I want to cruise to retirement’ attitude would be dysfunctional in an aggressive, get-it-done employer?   Probably.  Would it lead to termination?  Probably.  A really good recruiter could catch that.  I’m not sure how a machine would.”

“Wow.  That’s a dismal picture,” I responded glumly.

“Not so dismal.  You can figure out your job’s key success factors, and to build a measurement scales for them.   We need to find behaviors that correlates with how much someone wants challenge, for instance, interview for that behavior and rate it on a 1-5 scale.  We need to know how much the job needs and then how much the candidate has and then compare them on the scale.”
“What would automation do?”

“Running these types of comparisons creates a lot of data that can be difficult to understand and can add to the ‘fog of recruiting.’  Automation can make complex data into simple and vivid displays that show how candidates compare to the requirements and to each other.  Automation helps to lift the fog of recruiting, making the weak and strong candidates obvious.”

“You talked before about AI hitting the problem with a 2x4 vs. a scalpel.  Is this the scalpel part?”

“Yes it is,” John said.

“And no machine does this,” I said, not sure if I was asking a question or making a statement.

“They can but most just record, count and report or recognize gross patterns or look or key words. But I just ran into one that does add real value.  It expands your pool of good candidates by automating the employee referral process.  This is valuable because it enriches the supply of qualified candidates. It reduces the dependence on recruiters managing the employee referral program.  Recruiters forget stuff; the machine does not.  It sets up innovative and personalized rewards and lets the employee pick; the recruiter does not need to manage that process.  It finds potential candidates through employees voluntarily sharing access to their social media, discovers the candidates’ contact information, invites the employee to select and invite candidates to apply, and then processes the candidates throughout their journey.  All this frees the recruiter up to talk to people, to do the scalpel part.  It’s the best use of automation and AI I’ve seen in the talent space.  It’s called Boon.”

We were finished with lunch.  And there was a silence. I said, “That was a lot.”
  
“Sorry,” John said, chuckling.  And then he pulled out his usual quiz of what was just said to see if I was listening.  “Tell me what you think the point is?”

“I think the point is that if you want to hire the very best people available to you, you can’t cut corners.  There is no silver bullet.  Automation can help, but finding the best employees, selling them on your job and selecting the right ones is a ‘contact sport’ and takes skilled people applying themselves in a disciplined way.  Machines can’t do that yet.”

“All true.  Once we start acting like hiring the very best people possible is the real goal, the methodologies will emerge and the automation will follow.  They actually exist now.  They just have not become widespread yet.”
 
“Who did you say was buying lunch?” he asked with a smile.

 I reached for my credit card.


John Wentworth has been in HR since 1972, a recruiter since 1979 and run his own company since 1984. John is a Vietnam War combat veteran and The Wentworth Company is a State of California Certified Small Business & DVBE. The Wentworth Company has helped 550+ employers hire over 20,000 new employees.  The firm consults regarding talent, designs talent systems and offers high volume, RPO and single search services.  88% of their hires exceed the hiring manager's’ definition of qualified. He was interviewed by an imaginary companion.

Thursday, July 27, 2017

Follow the Money

The inherent conflict of interest in recruiting

How do you measure the effectiveness of either your internal recruiting efforts or your outsourced solutions?  What is the overall cost of your recruitment activities?  What does recruiting mean in the digital age when resumes are everywhere and access to candidates is infinite?   These are common questions we face in this industry, but perhaps at the root of it all lies the conflict of interest between the HR/Recruiter and client.

In a recent interview, and #1 in a forthcoming series, with the founder of Wentworth Recruiting, a recruitment and talent acquisition consulting firm based in Southern California, we discussed the state of recruitment in the digital age. John Wentworth spoke candidly about the “elephant in the room," i.e. the inherent conflict of interest with outsourced recruiting business models.

He begins his tale in the mid 1970’s, as manager of the Carte Blanche HR department.  “I had no rational way to determine an annual raise for my in-house recruiter,” said Wentworth.  “We did not measure her performance in any meaningful way, so I had no way to incentivize productive work.  My best guess as a measurement tool was lack of complaints. Low number of complaints, high raise." 

He went on to tell the story of this particular recruiter invoking the "myth of difficult recruiting." The “myth of difficult recruiting” purports that the job is too hard for one individual in-house recruiter to manage and succeed at. Because they believed her complaint about the barriers to her success, they farmed the recruiting function out to an agency.  Then after a few months when the position went unfilled she complained about the agency not fulfilling their promise to get the job done. Somehow this recruiter still got her annual raise and the band played on.

Does this sound familiar?

John eventually left that position and went to work for a recruiting agency specializing in IT and working on a Contingency business model.  If you are not familiar, Contingency recruiting means the agency doesn't get paid until the person is placed.  In this situation, John encountered an attitude of impatience and disdain among his colleagues, who regarded the client as the unfortunate obstacle between them and their money. Hiring managers at their clients were demonized for ridiculous and irrelevant candidate requirements and for sluggish compensation policies. In Wentworth’s words, "we were taught to do whatever it takes to get the placement.  I will leave it to your imagination to figure out what that means.”  

The takeaway lesson in Wentworth’s last experience was that the contempt was transparent to the clients and this caused a relationship of distrust. This dynamic between recruiter and client has led to a negative reputation for contingency agencies across the board, driven by the flow of money which incentivizes the wrong behavior. “They didn’t trust us and we didn’t trust them,” said Wentworth. So a real partnership was not possible.” Without a good partnership, good recruiting is just not possible.

As John continues to describe his journey, he next went to work for a group practicing a more elegant recruiting model: Retained Search. In this business model clients generally pay a third up front, a third at a progress point and the last third either when filled or at a final progress point.  To his surprise the client was still the enemy but for a much different reason.  The internal pay structure (bonuses, commissions etc.) was based on the amount of money that was brought in and not connected to service performance.  The emphasis was on booking business, and not enough on filling jobs with the right candidates. The way the money flows incentivizes the wrong behavior, again.
  
In today's digital and social world, recruitment firms face a whole new slew of issues.  Before the digital age, human resources were much harder to find and the broker relationship had value. But today, that model is outdated because of the proliferation of and ease of access to previously difficult to find resources. It is why your insurance broker talks to you more about services and other products you can purchase from them to make your risk management easier. Same idea for us recruiters.

The dual challenge of moving beyond the brokerage function of client service and operating so that the money flows in the right direction to incentivize the right parties to do the right thing, continues to challenge today’s recruiting firms. At the Wentworth Company, we operate beyond the brokerage relationship by providing highly successful results through a data driven process that captures the culture of the organization, the design of the job and the compensation package. When you follow the money, it moves the wrong way with most recruiting models used today. At Wentworth Company, we take care to avoid the inherent conflicts of interest between the recruitment process and the client, so that the money moves in the right way, rewarding both sides with the benefits of successful placements.

In my next dispatch, we will explore this data driven process and the value it provides to clients in a world of LinkedIn, Ladders, Indeed and Glassdoor.

If you would like to talk more about these ideas, please reach out to Dennis Bernstein at dennis@rnr_llc.com.

Or visit www.wentco.com