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Agency Iceberg

Why Cultural Fit is So Important

If skills were all that mattered, the process of filling an open position would be simple. Candidates would be given a series of exercises to measure their skills, and those who scored highest would be hired. There would be no need for interview panels, personality assessments, or any of the other hard labours that go into job recruitment today.

But no sooner do we imagine such a scenario than we begin to see the depth of its faults. Would an organization staffed by top-scorers really be effective in a today’s business climate, where change and innovation are the rule? Would employees hired for their skills alone be able work together, solving problems and strengthening the culture of the company as a whole?

In truth, paying attention to nothing but skills may be a passable idea for dystopian novel or a sitcom, but not for real management teams hiring for real organisations. The best recruitment decisions certainly do take skills into account—but they are also based on values more difficult to quantify.

These values, like part of an iceberg beneath water, play a major part in determining how a new hire will perform. Will he or she fit into the organisation and prove to be a worthwhile investment, or will the bottom line—not to mention the company culture—ultimately suffer?

If a hire turns out to be a bad fit, the effects are anything but vague. The cost of bad hires is gaining more publicity as companies search for the roots of success, and attempt to leverage resources to the greatest possible effect. A frequently referenced Careerbuilder survey asked companies from all over the world how bad hires had affected them. Huge numbers responded that bad hires had negatively affected their overall productivity, employee morale, client relations, sales, and of course, profitability.

The kicker is that bad hires are expensive whether they stay or go. If they stay, areas like client relations, productivity and morale are affected. If they go, the cost of recruiting and training a replacement must be figured in—not to mention the cost of recruiting and training that bad hire in the first place. There is no way of measuring the cost exactly, but if there were, it would be surprising—and not in a good way!

But let’s not dwell on the negative too long. In order to better understand what makes good recruiting, let’s look at the other side of the coin. How do companies benefit from making a good hire? The right hire?

First, the right hire will quickly “gel” with the company, strengthening the culture you are trying to grow and expanding your pool of “right people.” The integration process will be neither difficult nor expensive. Your existing team will accept them faster, and productivity in both the new individual and the team will be accelerated.

As a bonus, good hires tend to know other professionals of a similar ilk. This means that with every good hire, your company’s pool of potential talent expands, and with it the strength of your brand and company culture.

Think of it in terms of the group development model created by Bruce Tuckman, in which he identifies four stages of group development—forming, storming, norming, performing. That last stage—performing—is where every organisation wants to be. Good hires will get you there with a minimum of time, effort and financial resources.

By now, simply by looking at the effects of good versus bad hires, the importance of something beyond skills should be naturally evident. This “something”—the part of the iceberg beneath the water—can be summed up as cultural fit.

Of course, hiring an employee purely on the basis of cultural fit would be as ineffective as hiring purely on the basis of skills—almost. The difference is that skills, unlike cultural fit, can be taught. A new hire can learn things like software, algorithms, company spreadsheets and so on. Values like motivation, work ethic, leadership, a positive outlook—these are much more difficult (if not impossible) to teach.

Where is the ideal balance between skills and cultural fit? Is there a formula for achieving this balance?

These are the questions that companies all over the world are trying to answer. Research shows that only 20% of all hires are shoe-ins, possessing both the skills and cultural fit needed to add long-term value and be considered future leaders of the organisation. Around 10% should never have been hired at all, while the majority are somewhere in between—either strong in skills but weaker in cultural fit, or vice versa.

Our own answers to these questions have gone into an Assessment interview Training (AIT), which has already been successfully rolled out through a number of organizations in Australia and Asia. Taking all of the above (and more) into account, research shows that the highest achieving individuals share between four and six specific characteristics. The AIT helps organizations identify those characteristics, and structure an interview process that tests for evidence of them in potential candidates.

Has the recruitment iceberg been mapped completely? No—and that may never be possible. But there are systems strong enough to give a fairly detailed picture, and help companies avoid expensive mistakes surprises on the horizon.

This post was originally posted here. Image also used from original post.