Emerging Markets

Two tried and tested ways to recruit all-star teams

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Imagine you’re the coach of a basketball team (a dream that my high school self imagined all the time). How would you run your try-outs? Would you look at the list of other teams the athletes have played for, or awards they’ve received, or ask them about their aspirations to play professional basketball? Would you have them talk about a time they missed a shot and needed to bounce back?

Probably not. Most likely, you’d put them on the court and see how they play.

Sure, past experience and accolades matter, but resumes (in sports as in life) are rarely as good a predictor of performance as good old “show me what you can do.” The idea of selecting someone without gauging her or his performance seems nonsensical, but in the absence of a different framework, and with limited time to make decisions, this is actually how many small and growing businesses (SGBs) approach talent acquisition.

Hiring is hard

Startups around the world struggle with human capital. In fact, when Village Capital surveyed its portfolio of over 400 entrepreneurs, the respondents cited talent acquisition and retention as their number one barrier to growth, even higher than financing. And without following best practices, it can also be incredibly time-consuming: a report we published this year with FSD Kenya shows that for a single mid-level hire, Kenyan SMEs are spending around 18 hours screening CVs, and then 19 additional hours interviewing candidates — and if anything this number feels low!

I saw this dilemma firsthand while investing in fintech startups for Accion Venture Lab: Many organizations are so focused on raising financial capital that they are blindsided by the difficulty of running effective hiring processes, a necessity for scaling successfully. They would spend hours screening hundreds of CVs, interview some of the candidates (often selected based on university, brand name company experience, or personal connections), and make a decision based on who they liked the most. Not only is this method rife with bias, but it does little to predict who will perform best on the job.

What’s an SGB to do?

At Shortlist, we use competency-based assessments and structured interviews to hire high-performing, best-fit candidates for our clients (and also to build our own team). Aside from being tried and tested through our work with over 100 organizations, these methods are also backed up by countless studies, including this meta-analysis of over 80 years of research. Let’s take a closer look at these two approaches and how you can adopt them in your organization:

Assign work sample or competency-based assessments to test candidate ability: There are two ways to go about this: 1) Give candidates a sample assignment that mimics what they would do on the job (e.g., Excel exercise or social media drafts), and score their performance. Or, 2) Identify the core competencies needed to perform on the job (whether hard or soft skills) and create exercises that test them (e.g., present a fictional situation around reaching deadlines and ask applicants to prioritize actions, to assess for project management skills). At Shortlist, we use a mix of the two.

Here are some tips for implementing assessments at your organization:

  • Avoid making an exhaustive list of competencies and skills your ideal applicant would possess — instead, hone in on the top 3–4 that are absolutely critical.
  • Make sure you can objectively measure assessment performance — make a grading rubric, or create multiple-choice questions that have one right answer.
  • Implement this step (or at least part of this step) before an interview, not after. That way you’ll only spend valuable in-person time on pre-vetted candidates.

Start doing structured interviews: Studies show that judgments made in the first 20 seconds of a job interview can predict the outcome; interviewers often spend the rest of the meeting asking leading questions and interpreting answers in a way that confirms their initial hypothesis about the candidates. A great way to overcome these subconscious biases is the structured interview method, which keeps interviews consistent, predictive, and fair. These are the key elements of a structured interview:

  • Every candidate who is interviewed is asked the same set of questions, regardless of the interviewer, and interviewers agree in advance what they are looking for in a good answer.
  • Questions are explicitly linked to key competencies required to do the job, avoiding common “getting to know you” questions that perpetuate biases.
  • A standard rating scale is used by interviewers to grade candidate answers.

Why does this matter?

Getting hiring right is important for all organizations, but is especially true for SGBs. Let’s go back to the basketball example. With only five team members on the court at once, every player counts. Similarly, in a startup or small organization, every new hire is critical to building on your momentum and solidifying your team culture. On a macro level, looking past pedigree and refocusing on potential is the first step towards a world where everyone gets a shot at fulfilling professional experiences.

I hope this was a helpful starting point for you to reframe your hiring practices and find your next all-star! For more hiring tips and resources, visit our blog and follow us on Twitter.

Paul Breloff is the CEO and co-founder of Shortlist, which helps growing enterprises in India and East Africa hire based on skills and potential, rather than pedigree.

Past blogs in this series on hiring:

https://medium.com/village-capital/why-raising-talent-is-just-as-important-as-raising-money-e8a3c3d095b0

 

https://medium.com/village-capital/why-raising-talent-is-just-as-important-as-raising-money-e8a3c3d095b0

 

https://medium.com/village-capital/why-raising-talent-is-just-as-important-as-raising-money-e8a3c3d095b0

Upcoming blogs:

  • Martha D. Karimi and Manuela Müller, Founders, Edge Consulting — Onboarding, setting up for success in a resource constrained environment
  • Lyndsey Vandament, Kerry Nasidai and Sarah Ngima, Head of Talent Practice, Open Capital Advisors — Where do you want to be in 5 years? Leveraging SGB-tailored talent tools.
  • Rebecca Harrison, CEO and Co-Founder, African Management Initiative — Moving from entrepreneur and hustler to manager and leader: How to embed the management practices that will support your business at scale
  • Caroline Gertsch, Director, Amani Institute— Is your team performing to the best of its potential?
  • Ayla Schlosser, CEO and Co-Founder, Resonate — How can you use storytelling to drive results?

Can we shift the recruiting paradigm from pedigree to potential?

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All around the world, companies big and small are facing a similar problem: Hiring is so much harder than it should be.

While India adds a million people to its job market every month and Africa is set to add more people to its workforce by 2020 than the rest of the world combined, over half of emerging market companies still can’t fill the roles they have open. Startups consistently rank talent acquisition as a top barrier to growth. What gives?

I saw this dilemma firsthand while investing in financial technology startups around the world for the last five years, as the founder of seed venture fund Accion Venture Lab. Once an investment was closed and cash was in the bank, the company’s problem shifted from not having financial capital to not having the human capital they needed to be successful.

The picture is even bleaker on the jobseeker’s side. Even skilled professionals often can’t get hired because they didn’t go to the “right” school, didn’t work at the “right” company, don’t know the “right” people, or fall victim to unfair biases during the application process. They are left lobbing their CV into job board black holes, never able to show potential employers what they can do.

This needs to change. We believe that talent is equally distributed, but opportunity is not. What often appears to be a lack of talent supply in markets is more often a failure of not knowing where to look or what to look for. At Shortlist, we want to level the job search playing field, shifting the recruiting paradigm from one based on pedigree and prejudice to a new version grounded in competency and potential.

How are we doing it?

1. Bringing intelligence to technology

Technology has burst on the scene to flatten access to job opportunities and broaden candidate pools (thank you LinkedIn and Monster). But without intelligent intermediation, more tech creates more noise, more decision fatigue, more work, and more despair for companies and jobseekers — not better outcomes. Just ask any of our employers who have received 2,000+ applications to a single job posting.

We combine a chatbot questionnaire with online assessments and phone screens to help us decide who is most likely to be great in a job. This filtering layer combines technology, data, and a human touch to ensure that talented candidates don’t slip through the cracks, particularly those who risk being overlooked based on CV alone.

2. Creating signals beyond the CV

Most companies have been hiring the same way for centuries (seriously): source and skim a lot of CVs, speak with some of the candidates, then make a decision — and regret those decisions more often than they would like. Not only is it hard to discern genuine ability and fit through a CV and unstructured interview alone, but this mode of decision-making is also often riddled with bias and prejudice.

Companies often do this not because they think it’s best, but because, frankly, there’s nothing else to go on. It’s like the joke about the economist looking for his keys under a streetlamp, not because that’s where he lost his keys, but because that’s where the light is better. At Shortlist, we engage candidates digitally to user-generate more accurate signals. We screen not only for basic experience fit but layer on additional data points for cognitive ability, competencies, and motivation. To be Shortlisted for a job, it’s more important to show us what you can do, not just tell us what you’ve done.

3. Refocusing on what matters

Let’s be clear: many people who went to great schools and worked at impressive companies are great and impressive. But for the vast majority of job-seekers, particularly in emerging markets like India and Kenya (where we work), prior experience paints an incomplete and often misleading picture of a candidate’s capabilities.

Schooling and subsequent corporate experience is — in all countries — more often determined by “birth lottery” than by merit. And we all hold biases, positive or negative, about certain schools or corporate brands. Looking past pedigree and refocusing on potential is the first step towards a world where everyone gets a shot at fulfilling professional experiences. Further, reconceiving the nature and focus of talent screening matters not only for hiring fairness, but also for hiring effectiveness. Building a team based on merit and performance instead of connections and pedigree is not only the right thing to do — it’s good for the bottom line.

The Shortlist mission

At Shortlist, we are on a mission to unlock professional potential and help great companies succeed in building great teams. We’re starting with a new way to match talent with opportunity, but we’re just getting started.

We want to level the talent playing field, but we can’t do it alone! We want to learn from each of you about what you think works to find and understand great talent, and what makes a great team. Visit our website, email us, or tweet at us — we’d love to talk with you about how we can help you hire. We’ll be using this blog as one of the ways we share the ideas behind what we do and how we do it, so stay tuned…