Hiring for Potential or Past Performance?
Designing and implementing the right recruitment and hiring strategy goes a long way in getting the best of talent on board. A recruitment strategy is an all-encompassing approach about who to hire, how to hire, what to hire for and so on. However many organizations do not assign prime importance to devising this strategy, and then recruitment becomes a person-driven process, totally dependent on the recruiter. Every recruiter may adopt a different talent assessment process, with individual judgment and biases steering the selection decision. For example, one important conundrum that every recruiter faces is whether to assess past performance or future potential when screening candidates. Here is a detailed look at this dilemma, and how you should plan to assess based on your business need.
The job of the recruiter is to bridge the talent gaps so as to align with the business needs. Today, the HR domain is seeing the rise of new hiring paradigms—hiring for potential being one of the foremost ones. The “hiring for potential” concept moves away from the traditional belief that past performance is an indicator of future performance. It takes into consideration that situations may change, resources may vary and a person may grow and learn through his/her journey, making “potential” a very powerful aspect of the candidate. In fact, a changing and dynamic environment is the business reality of today. We live in the VUCA, i.e. Volatile, Uncertain, Complex and Ambiguous world, where the business scenario in a company depends on a number of uncontrollable external factors. How then, can we guarantee that a company that has done well in the past will excel in the future? The same extends to the people, and today’s and tomorrow’s success factors are very different from those needed a few years back. Employees today are expected to learn and grow, both technically, functionally and most importantly, in leadership areas. It is, therefore, important to assess the capability of the candidate to take on these larger responsibilities, and that is what potential does.
It is no surprise that more and more companies are realizing the importance of Hi-Potentials or HiPos as they are called. Organizations are designing special HiPo interventions such as learning and growth opportunities, fast-track careers, and leadership development focus for such people. Even the recruitment processes are aligning to assess for high potential, by predicting future outcomes through selection tools and assessments. A commonly used process to hire for potential is conducting behavioral interviews, wherein the employee is questioned on what he or she would do in a particular situation, rather than what he or she achieved or did before.
Of course, hiring for potential cannot be successful for every job role in the company. Totally ignoring past performance while hiring can pose certain problems. For example, the employee who is hired merely on potential may lack the basic skills required to do the current role and may not even reach the stage of exhibiting future potential due to initial lackluster performance. Therefore, hiring based on past performance is particularly important in highly specialized job roles such as doctors or pilots. It is, therefore, important for the recruiter to know which hiring approach to adopt for which role. Ideally, more standard roles that use typical metrics as measures of performance benefit from hiring for performance, whereas open-ended leadership roles work better with potential-based hires.
The HR must focus on building the right recruitment capability—recruiters need to be specially trained in appropriate selection tools to hire the right people based on potential or performance. This means being able to predict future performance, based on the assessment of behaviors. Organizations must invest in their recruiters and train them to identify the best fit. It is also critical to have the right selection tools and software on board to make the recruitment process efficient and effective.
There is no single approach to bringing on board the best of talent. Whether hiring for past performance, or future potential it is important to carry out a holistic assessment. This means checking for job-fit, function-fit, and values and culture-fit with the organization.
