Micrel, the Silicon Valley company I founded and led for 37 years, had the lowest employee turnover rate in the American semiconductor industry, and the highest rate of boomerang (returning) employees. I personally have hired hundreds of people and Micrel hired thousands.
Hiring the right employee matters more than most other decisions you or your management team will make. A bad hire can be downright destructive to a company. A desperation hire likely produces lackluster results. But a great hire will lift your sprits as well as your profits. Knowing how to hire is as important as knowing your marketing, knowing how to innovate and knowing how to manage corporate cash (a topic I discuss at length in my book Tough Things First). The key to having low turnover as well as high-performing employees is in the methods that you use in selecting and interviewing candidates.
Start with knowing the role
Young companies often do not think through what they need in each role. This may be due in part to the ever shifting nature of startups; but not establishing the essential duties, and thus the critical capabilities of an employee, is suicidal. Start with knowing exactly what you want in a hire, and writing a well-defined job description. This includes both education and experience, and it may include specific knowledge, industry contacts, personality profiles and more. It is better to be too detailed than not detailed enough.
Engage many people, especially from outside the department
A few blind men may not be able to know they are touching an elephant, but by collaborating they could likely document the specimen completely.
Leaving hiring selection to a small number of people is the same situation. Everyone perceives things differently, and everyone sees different aspects of a candidate. Only by having an appropriate number of interviewers and a rational method of discussing and scoring the candidate can great hiring decisions be made.
Interview teams should consist of six people, with at least half being from outside the group for which the individual is being interviewed. That last point is significant. Most employees will have to work across departmental or team boundaries. What someone outside the group sees is something people within the group likely will not. Imagine you are hiring a new systems software developer – and über geek. Other systems programmers and the department head will get the quirks common to this type of genius, and overlook things that might cause problems with applications developers, system admins and others outside his group.
Selecting the six interviewers is very important and needs to ensure that people with the right disciplines have a chance to interview the prospective employee. There is little use in having our systems programmer chat with anyone in the accounts payable section; but not having him or her interviewed by the head of product support could be a deadly mistake.
Allow the candidate to open up
Where and how the interview is conducted affects the accuracy of the interviews.
Find a quiet and private location. Job interviews are stressful enough. Inducing loads of distractions and being subjected to roving onlookers doesn’t relax anyone. Easing the candidate gives them a chance to have a personal interview process and, if the interviewers are warm and inviting, to open up about goals, experiences and even personal drawbacks.
Every interviewer should start by saying how much they appreciate having the candidate interviewing with your company. After all, they likely have alternatives. They decided your company was worth considering, just as you decided the candidate was. This mutual vote of confidence is a good start, and should be acknowledged.
Next, shut up. During the interview, let the prospective employee do most of the talking while you do most of the listening. Your mission is to find out as much as possible about the candidate, and you cannot do this if your mouth is engaged. The more comfortable the candidate feels while talking with you not only enhances your chances of getting the information that you need, but also the chances of the candidate wanting to join your team.
Learning what is important
Learning what a candidate knows is almost as important as learning who they are. This goes back to making the candidate comfortable and letting them speak. By asking difficult questions, you will make them feel uncomfortable and not expose their truest personality. You can also achieve this by monopolizing the conversation, coming to the interview with a less than positive attitude, or even by bad-mouthing the candidate’s current employer. Instead, by being welcoming, warm, and mostly quiet, you quickly discover what kind of a person they are. You get an idea of whether they will match your company's culture, be agreeable to other employees and meet your expectations.
Among the things you should watch for during an interview, some of the most important are:
Money Talk: If the prospective employee focuses on compensation, that is a red flag. Everyone needs money, and there is no shame in discussing compensation. But a candidate fixated on rewards is not going to be fixated on providing value.
Outbound Attitude: What did the candidate think of their prior employer and job? If they disliked their employer or the type of work that they were doing, this may be a problem. The main reason employees leave or search for another job is that they did not like their immediate supervisor. But this dislike may be the employee’s perception or poor people skills. Otherwise, liking their immediate supervisor is a positive.
Dress for no Success: How an employee came dressed for the interview may tell much. The goal is to see if the way they dress is comparable with what you expect, because you are a product of your corporate and group cultures. The systems programmer discussed above might set off warning bells if he did show up in a suit and tie, as would a potential CFO arriving in sneakers and blue jeans.
And the judges score his performance as …
Micrel used a 10-point rating scale for each of the categories we applied to a candidate. Your company should have a different set of criteria, but following the Micrel model is a great start. We scored people on appearance, personality, written skills, technical expertise in the job being considered, cultural fit, verbal skills, an “overall” rating, and finally if the interviewer would consider the candidate for the hire (even if the interviewer was outside of the target department).
At Micrel, we looked for a composite score of seven or higher to even consider the employee. If the primary interviewer – the likely boss – would not consider the candidate for the hire, the prospective employee was not picked unless the application was kicked up to the next level and the decision was made there (very rare and under unusual circumstances). Otherwise, at least four out of the six people doing the interviewing had to agree to hire the candidate and the candidate’s composite score had to be seven or higher.
Knowing what you cannot know
There are some things you cannot tell in an interview, and that is why references are required.
A friend of mine once built a technical support team from the ground up. All the new employees were brilliant and outlasted my friend, with the exception of one fellow. During the interview cycle, the candidate impressed interviewers. He was a solid personality fit, a good cultural match, and showed great drive. He also ended up being a chronic alcoholic who missed work after each of his only two paychecks. None of this was even remotely apparent during interviews.
Reference checks are mandatory and the employee should supply at least three qualified references, not including their own family or friends; and these people must be technically within the area being considered. Where possible, find two other references that a candidate did not list, be they former co-workers, bosses or even found with a deep scan of the employee’s social media accounts.