The Biggest Secret to Hiring (It’s Not What You Think)
The way to win in business is to mold your workers to fit your culture.
PHOTO CREDIT: Getty Images
For most employers, she's the holy grail: the day-one-ready new hire. In she walks, preloaded with requisite skills. Just add caffeine and let her rip. But with unemployment at near-record lows, people like her are hard to find. Good. That scarcity is an opportunity.
In today's tight labor market, the talent-is-hard-to-come-by lament is near universal--and also potentially misleading. The problem isn't so much that employers can't find workers for jobs that require skills, some experts say. It's that employers want workers they don't have to train. That attitude may deny businesses a powerful competitive advantage. That's particularly true for entrepreneurial companies, which rely on workforces' thinking and acting differently from incumbents.
Chad Laurans would agree with that. When he founded the Boston-based home-security company SimpliSafe in 2006, Laurans wanted to upend the industry with install-it-yourself hardware and no long-term service contracts. So he refused to hire anyone with industry experience. "We didn't want that baggage," he says. The venture-backed company--which employs about 600 people--hires from all levels of education. Training ranges from a month for call-center workers to potentially years for an engineer.
"Hiring people to do something they haven't done before is powerful," says Laurans. It's possible, he continues, that a day-one-ready hire "is going to be bored, or they are just not going to be driven."
As an entrepreneurial leader, "I really don't want fully skilled people, because I want it to be done my way," says Tom Peters, whose new book, The Excellence Dividend: Meeting the Tech Tide With Work That Wows and Jobs That Last, argues that training should be investment No. 1. Companies willing to train new hires, Peters says, can simultaneously address needed skills and the business's distinct culture to produce employees who "do things in ways that fit our character." In his formulation, "the company with the best training wins."
The expectation that hires will hit the ground running emerged during looser labor markets when companies enjoyed a surfeit of choice. They also ran leaner, and so the appetite for anything less than prime talent abated. "Over the past 20 years, companies got very picky looking for people who were the exact right fit," says Todd Thibodeaux, CEO of CompTIA, a nonprofit trade association that trains and certifies people in a variety of IT skills. "They weren't interested in taking people who were entry level or were maybe 75 percent of the way there." Companies also hate the idea of spending to make workers day-one ready for someone else. "Employers are convinced if they train people they are just going to lose them," says Peter Cappelli, director of the Center for Human Resources at the Wharton School.
Of course, it is in the interest of a dynamic economy that businesses give workers their first shots, increase their value through education and experience, and then wave goodbye as they depart for better opportunities. But it is not in the interest of individual employers. Such concerns not only produce under-investment in training but also cause the proliferation of noncompetes, which these days extend all the way to beauticians.
But training makes workers both more likely to join and less likely to leave. Asked what attracts them to employers in a study by PwC, Millennials ranked training third, above benefits, flexible schedules, and employer values. Research shows increased retention among employees who are encouraged by their prospects for advancement and feel obligated to employers who invest in them. And a well-developed training muscle allows companies to react quickly to shifts in demand--from SharePoint to Slack, for example--and update their own workforces in response.
Such advantages should persuade business leaders to stop viewing themselves narrowly as consumers of talent and focus on becoming producers. There's no reason entrepreneurial companies can't be as innovative about developing talent as they are about developing products and services. Some already are.
Techtonic Group, for example, is both software development firm and apprentice farm. The business, based in Boulder, Colorado, employs a cadre of apprentices whom it trains in multiple skills while simultaneously deploying them (with a more senior team) on client projects. After 1,000 hours of working with apprentices, clients can hire them onto their teams--they now possess ample evidence of their ability. Techtonic, which raised a $2 million round in April, is the first Department of Labor-registered apprenticeship provider for software development.
Tech jobs aren't the only ones inspiring creativity. In 2015, Saxbys Coffee, a chain headquartered in Philadelphia, launched an unusual partnership with Drexel University to open student-run cafs on campus. Undergraduates manage everything--frothing the cappuccinos, sure, but also hiring, firing, marketing, and calculating the P&L. Company managers swing by regularly to check in and answer questions, but none are onsite. Students learn on the job and in the classroom, where Saxbys helps shape the curriculum. Founder Nick Bayer created the program to promote entrepreneurship, but it also primes the talent pipeline--from store managers to corporate--with young people who know Saxbys chapter and verse.
Such programs represent a creative, ambitious approach to eliminating skills gaps inside companies. Great businesses are born when entrepreneurs can't find something they need and so build their own. Great workforces are born the same way.