Using Root Cause Analysis to Hire Better People

Diagnose before prescribing. Every first-year med student learns this simple admonition. It should be applied to business decisions more often. In an attempt at quick improvement, we often try to implement solutions without enough information. This situation is not exclusive to HR/recruiting. Root cause analysis can help eliminate this problem. Root cause analysis is a method of digging deep to uncover the real cause of a problem rather then relying on superficial information to make decisions. I suspect that the reason why the hiring process has not improved much in the past 30 years is that too many of these solutions have been tried without enough of the digging deep. Some examples will help illustrate the problem and the solution. Example 1: Declining Monthly Sales Problem: Salespeople are complaining that competition has reduced their prices, eroding sales everywhere. There is evidence supporting this claim. Solution: Introduce an aggressive new pricing program to stop the loss in total unit sales. Of course, as a result, total revenue declines along with profits. A root cause analysis could have shown that the competitive product wasn’t of comparable quality, and the customer would have to replace the product more often. In this case, the company should have introduced a quality-based message addressing lifetime product cost, not just the cost of individual units. Not knowing the real cause of the problem often gets managers to take the wrong action, worsening the situation. Lack of any evidence of long-term improvement is a great clue that a corrective action isn’t working. Unfortunately, too many managers assume that lack of improvement means they should have been more aggressive in making the initial change ó and, in this example, prices would have been reduced even more. Of course, the root cause analysis could have proved that the pricing problem was real: then the company would need to develop some other means to stay competitive. Regardless, using minor information to make major decisions is a typical problem of many managers and executives. Here are some HR/recruiting examples to consider. Do any sound familiar? Example 2: Offers Being Rejected as Uncompetitive This is a fairly typical problem as companies decide to target stronger ó and more passive ó candidates. It’s also more common as the economy strengthens and the demand for certain types of hard-to-find candidates increases. Stronger candidates, especially those you have to recruit and those that are gainfully employed, tend to want significant increases in compensation. Above-average candidates with multiple offers also find themselves in stronger bargaining positions. One of two things typically happens as compensation packages get bigger or offer rejection rates increase. Either the company decides to pay more, or it doesn’t. Neither approach is warranted. This is especially true if a root cause analysis wasn’t conducted to determine the real underlying problem. More often than not, the problem is not compensation. More likely, the problem has to do with the scope of the job. A top person is likely to demand more compensation if a job isn’t seen as big enough or doesn’t offer enough of a challenge. This is often due to lack of understanding of real job needs. Rather than increasing compensation, the better solution might be to increase the scope of the job, or better still to just describe the real job in terms of projects, challenges, and opportunities. Often, this will be enough to minimize the need for a larger-than-normal comp increase. Top people always view the opportunity for growth in balance with compensation. If the job sounds like every other job, all you’re left with is comp as a negotiating tool. Example 3: ATS Underperforming Most companies have some level of frustration with their applicant tracking system (ATS). The vendors always consider this a training issue, with the refrain, “If only recruiters would use the system properly, all of your problems would go away.” In response, distraught companies complain, buy bolt-on solutions as short-term fixes, develop some kind of external workaround using Excel, or look for another vendor. A root cause analysis would have revealed the real problem. In this case, it’s probably caused by a hiring workflow process that should never have been automated in the first place. Compounding the problem is an implementation plan that didn’t have much planning, a weak search engine in the ATS, and many users who aren’t good recruiters or those who actually shun technology. Collectively, the problem is far bigger than any of the short-term tactics typically taken. In this case, companies should first evaluate their hiring process to see what works and what doesn’t. With this benchmark, ATS functionally should be reduced until all of the basics are in place with a target of obtaining 100% user adoption. At a minimum, this must include a robust search engine that allows a recruiter to separate the best candidates from the rest without ever having to open a resume of one of the leftovers. If you find yourself or any of your recruiters wasting time looking at too many resumes, you’re experiencing one of the underlying problems described above. You might want to conduct your own root cause analysis before changing vendors or buying another short-term fix. Example 4: Not Enough Diversity Candidates Everyone’s looking for more diverse candidates. Most think the problem is twofold. The first relates to sourcing ó not enough diverse candidates are being seen ó so there is a mad dash to find more diverse candidates, using every variety of sourcing technique companies know. When this doesn’t solve the problem, there’s another mad dash to convince hiring managers that they’ll need to lower their hiring standards to meet their diversity targets. Neither will help much. The problem is more than skin deep. A root cause analysis will probably reveal that the reliance on traditional job descriptions as a filter is the real problem. A list of skills, academics, experiences, and responsibilities actually preclude the best candidates from ever being considered, including diverse candidates. For one thing, just because someone has the correct background doesn’t mean that he or she can do the work. For another, there are many people with comparable experience or potential who can do the work, but who are automatically excluded from consideration using the classic job description as a filter. To reach this important group, it’s better to define the job based on what a person needs to do or accomplish, rather than the skills they posses. I refer to this as a performance profile. Every job has six to eight performance objectives that define performance. For a product manager, it might be to develop and meet tight deadlines or create a product plan. With these performance objectives as a guide, look for people who have had some type of comparable experience. This will open the field to a broader group of candidates. For example, for branch executives in the fitness industry we found strong candidates in healthcare, hospitality, and retail. Their common strengths were running a small business, building teams, local marketing, and one-on-one selling. Example 5: Too Many Hiring Errors Companies have been implementing behavioral-based interviewing training for the past 20 or 30 years. Surprisingly, these same companies have not seen much improvement in the quality of their hiring decisions. Yet when confronted with high turnover or underperforming new employees, the typical solution is still more interviewing training. While hiring errors are reduced somewhat, managers typically need to see more candidates, and quality is generally not much better. In this case, a root cause analysis would have revealed three underlying problems.

The problem is more a sourcing issue than an interviewing problem. If you’re not seeing enough good candidates, a new interviewing program won’t help. In fact, most interviewing training programs are designed to prevent hiring mistakes ó not assess the skills of top performers.

The hiring error is more likely mismatching job interests rather than bad interviewing skills. If an interviewer doesn’t know the real job, he or she often hires the person with the best skills and the best presentation. Use of performance profiles can minimize this problem.
Even if you use performance profiles and see more top people, these top people don’t accept offers the same way average candidates do. Typical behavioral interviewing courses don’t offer a clue about solving this problem, in fact most are counter-productive. In this case a recruiting training course with a little bit of interviewing would be more beneficial.

If you haven’t seen a constant improvement in every aspect of your hiring processes despite years of trying, the problem you’re attempting to solve is not fully understood. Root cause analysis will help. Conducting root cause analysis is a common trait of all high-performing people, including those that have senior management and executive potential. To better understand the process and to identify high potential people, ask some of your candidates to describe a root cause analysis they conducted on some major problem. The depth of their thinking, their resolve, their analytical skills and their creativity will be revealed. This is a great tool to use when trying to apply some of these same problem-solving principles to your own situation. Understanding the problem is the first step to developing a solution. Too often we start solving the wrong problem. By then, it’s too late.