If you’re involved in hiring, it’s critical that you act on this startling revelation: “Experience doesn’t predict a new hire’s success.”
Hiring with a focus on experience is, of course, a well-established tradition in recruiting. In fact, a Harvard Business Review study found that 82% of sampled job ads either required or stated a strong preference for experience. Unfortunately, their analysis does not support the assumption that “applicants with more experience will be better or longer-tenured employees than those with less.”
So quickly let me highlight why it is finally time for this sacred cow (of demanding exaggerated levels of experience) to be made into burgers. There are five primary reasons for reducing the importance of years of experience as hiring criteria. They are:
- Experience doesn’t predict new-hire success. Although it might seem counterintuitive, more years of experience simply don’t accurately predict whether a candidate will succeed in a job at a new company, according to research published in that HBR study. A previous study ranked job experience No. 14 in accurately predicting the next job success.
- Unnecessary high-experience levels dramatically raise your new-hire salary costs. The number of recruiting prospects with significant years of work experience is small. Competition between firms causes this experienced talent to be “bid on.” This means the salary costs for a more experienced new-hire’s first and every other year will be significantly higher. And if their performance levels are not equivalently higher, each new hire will have a lower ROI.
- Unnecessary high-experience levels will likely reduce your diversity. Across-the-board, minority candidates generally have less experience (for example women have 14% less experience than men do). So, requiring excessive years of experience will unnecessarily reduce diversity in the talent pool for your jobs. And that likely lack of diversity in your workforce may hamper your product design and customer service.
- Unnecessary high-experience levels increase recruiting costs. The number of recruiting prospects with a significant number of years of work experience is small, so your sourcing costs will be higher. And because these people are harder to convince, a lot of additional manager and recruiter time will be required in order to land each one. Meaning that the recruiting costs for highly experienced talent will be much higher.
- Moving between companies requires many actions that may negatively impact productivity. All external hires require a great deal of learning and adjustment. However, candidates with many years of experience might be more fixed in their ways and habits and, therefore, be less able to make the transition.
Please Don’t Overreact — Instead Scan Through These Reasons Why Experience Doesn’t Predict Success
Take a moment to rationally consider the many reasons why experience doesn’t predict success. It’s just like in sports. Years of successful performance on the previous team don’t automatically translate into the same performance level on a new team. The reasons are separated into three categories.
Category 1: Adjusting to This New Environment May Lower Productivity
Past performance is more likely to be an indication of future performance only if the environment doesn’t change. And moving between organizations means that every new hire will have to adjust to multiple changes. Unfortunately, many years of experience may literally “lock an employee” into a certain way of doing things. And being locked in may make it even more difficult for those with a large amount of experience to change and adjust to these organizational differences.
- It’s a different culture. If people’s experience came primarily through their long tenure at their last company, they may now need a similar culture in order to succeed. Despite all your efforts during a fit assessment, they might not be able to adjust to this different culture, and that will directly impact their performance.
- Their new company may not be as powerful in the marketplace. Even if they produce at the same level that they did in the last job. The standing of this firm may be weaker. So, a less dominant image, industry ranking, and product brand at this firm may make success in the marketplace more difficult for this new-hire to achieve.
- The support mechanisms at this job and company are different. Perhaps this candidate had markedly superior support mechanisms at their last job. And if support mechanisms at this new firm include weaker teammates — as well as lower budget, quality of inputs, levels of collaboration, tolerance for risk-taking, and effectiveness of their operating plan — you can expect a lower level of performance, even if they put in the same level of effort. And even when support mechanisms are equally strong, the time it takes to discover and learn them may still reduce a new-hire’s productivity.
- Simply adjusting to the new environment will impact productivity. A long tenure in their last job might have reduced their ability to adjust to major change. So even though they might be able to do the work, the time required to handle the transition to this new job may be so distracting that it affects their productivity. And if troubled transition makes them decide to leave soon after joining, the new-hire’s performance will likely remain at a lower level until they quit.
- The title may be the same, but the job may be dramatically different. Although the job titles may be the same, the job duties may be significantly broader or more difficult in the new role. A new hire’s inability to immediately perform these added duties may bring down their overall performance.
- If they got a promotion, this will be a completely different job. Obviously, if the job at the new firm is a promotion, the predictive value of past work experience will be even lower. That is because this new higher-level job will have different critical success factors and it will require different and higher-level skills, including leadership capabilities.
- A different management approach will affect performance. Management styles vary. So, the different management approach taken by their new manager may not be a close match to the style they need for optimal performance. With a lot of years under a single style, the new hire might not be able to adjust to a new management style.
- Performance expectations may be higher at this job. For whatever reason, the goals and performance expectations may be significantly higher at this job. Someone that was a good performer at the last firm with lower expectations will be a weak performer under new, harder-to-reach performance standards.
- The pay and reward structure will be different. The compensation at the new job may be completely different. The pay structure, what is rewarded, and the amount of the rewards may affect performance if a new hire received a higher level of pay or a promotion when they got this job. This increased compensation might lower their personal incentive to strive for improved performance.
Category 2: Additional Years Don’t Automatically Equate to Increases in Capabilities and Performance
It’s a mistake to assume that more years of experience automatically means more skills and capabilities.
- People’s years of experience might not reflect their performance levels. – it’s a mistake to assume that all a candidate’s work experience was at high-performance levels. Because if a candidate’s experience was at below-average performance levels, they are likely to continue that lower performance level at the new job.
- Experience may not equate to growth in methods. It’s a mistake to assume that with experience comes growth. Someone with five years of experience may not have changed their approach over that five-year timeframe. So they really had one year of experience five times. And that means that they haven’t learned to adopt new approaches, tools, and best practices. And if these “dated” ingrained approaches are applied at the new job, it will hurt performance.
- Experience may not equate to growth in skills. It’s a mistake to assume that with experience come new updated skills. Someone with five years of experience may not have markedly updated their skill set over that five-year timeframe. In fact, with more experience may come some degree of overconfidence based on the assumption that they don’t need to upgrade their skills. If your job requires the continued development of new skills, it’s best to consider these two factors as independent variables. And then thoroughly assess a candidate’s skills and skill growth track record because they will affect current and future performance.
- Years of experience may not mean continuous learning. It’s a mistake to assume that with experience comes the willingness and capability to continuously learn. If this new job requires a great deal of continuous self-directed learning, it’s best to consider experience and learning as independent variables, as well as thoroughly assess a candidate’s interest and capability to continuously learn — because that will affect current and future performance.
Category 3: Additional Levels of Experience May Contribute to Complacency
After many years of experience, an employee may fall into a pattern that may in some cases be negative. So be aware that many years of experience can also mean boredom or burnout.
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- The candidate’s performance may already be going downhill. It’s possible that some of the reasons that drove this employee to look for a new job may be performance-related. And if their performance plateau was caused by a downward trend in their capabilities, that trend may continue in their new job.
- Motivation levels may reduce over time. It’s a mistake to assume a correlation between experience and increased motivation. Because while piling up years of experience, an individual may have become bored, burned out, or have lost some of their motivation. If this is a lateral move, that lethargy will likely continue. And because the motivation and frustration factors in this job will be different, a mismatch may cause their productivity to decrease.
- At a new company, their loyalty and commitment levels may be lower. Because they’re at a new company and with a new team, they likely will not have earned the same level of loyalty and commitment that was developed over time at their last company. And until those commitment levels rise, performance may be negatively impacted.
- External factors will be different at this new job. Along with the job, things outside of the work environment may change, including their commute and relocation issues. And external problems that may have contributed to their desire to change jobs — like family or health issues — may continue or get worse. And although many of these external factors can’t be controlled by management, they may still negatively impact the new-hire’s productivity.
What Does Work in Predicting New Job Success?
I have written extensively on the perils of over-relying on credentials, experience, and education. In fact, education is the No. 2 most expensive job requirement that contributes little to job success. (Education only contributes 1% to predicting job success.) And the important HBR study referenced earlier should further alert us to the perils of over-relying on experience as indicators of job success.
Instead, I recommend that you give candidates current problems in this job at your firm during the interview process in order to find out what they can do and what they will actually do in your environment if they are given the job (read more here). Obviously, companies should also put a renewed focus on internal hiring because internal transfers will almost always have faced fewer major transitions.
If you’re one of the few recruiting leaders that are adopting a 100% data-driven approach to recruiting, this latest research should be viewed as a welcome gift that can help you increase new-hire performance, without wasting expensive salary dollars. My personal conclusion from this recent research is not that you should completely avoid using experience as hiring criteria, but instead that you stop assuming that extensive experience automatically means that the candidate has more capabilities. You should also be more willing to consider significantly less experienced talent that learns quickly. In my view, experience ain’t what it used to be. In a rapidly changing business world, anything that happened more than three years ago may be little more than ancient history.