Wednesday, July 09, 2008

Malcolm Gladwell on the Challenge of Hiring in the Modern World

I'd be the first to admit that I'm a Malcolm Gladwell fanboy. Gladwell is a writer for the New Yorker and the author of The Tipping Point, Blink, and the upcoming Outliers. I don't always agree with what he says, or how he says it, but that makes him even more valuable to my mind.

In this twenty-minute or so video from the 2008 New Yorker Conference, Gladwell talks about one of my favorite topics, measurement dysfunction (although he never uses that term) , as applied to choosing who to hire. Like everything he says or writes, it's fascinating. He talks about the the total lack of correlation between the pre-hiring evaluation and post-hiring performance of professional hockey and football players, school teachers, and lawyers. He has lots more examples that didn't fit in the time allotted for his talk.

I'm sure that my various co-workers are tired of hearing me talk about how freelancing and contracting is the inevitable future employment model, and that the only thing that is holding it back now is job lock because of the lack of universal health care in the United States. There are two reasons why this is our future.

  1. Competitive pressures are increasingly making it difficult for organizations to keep talented (and hence expensive) employees on the payroll without keeping them working on projects that directly lead to revenue generation in the short term. This is not good in the long term for either the organization or the employee in an information economy. It's a form of eating your seed corn and it can only be successful in the long term if your employees are an easily replaceable fungible commodity. (Hint: they're not. Regardless of the state of the economy, there is always a competitive marketplace for the really good people.)

  2. It's impossible to know who to hire. There is no test that tells you who the great employees will be. Past performance is no predictor of future performance. There is no way to tell ahead of time which job candidate will be a good match for your organizational culture and for the task at hand. The only way to know for sure is to hire them and try them out. This is the crux of Gladwell's talk. That's why I think the wave of the future is hiring contractors, and then keep hiring the good ones. And not hiring them as regular employees (see point #1). (Yes, I realize there's an IRS issue here. That needs to be addressed along with the health care issue.)

Gladwell's talk is worth your time if you have any input into hiring in your organization. And even if you don't.

4 comments:

demian said...

I watched that video a while back. My take-away was that there's no hope of using a simple measure for hiring. The athletic stuff gets pretty fascinating, you'd think they'd be measuring the right stuff.

Anonymous said...

Chip,
Much as it is praised, measurable criteria for decision-making just doesn't fit with the way most people (businessmen included) like to live their lives. We admire people who trust their guts/beliefs/etc. And people think humanity is evolving to something better...

Ken

dunoonmacphee said...

Just stopped by your blog for the first time in a while. I totally agree the world is heading towards contracting. I have seen many contractors good and bad. The really good thing about this model is that the good contractors get picked up and rehired all the time, layoffs usually are a small inconvenience as they get new contracts very quickly. They also seem to enjoy their jobs more and have a cheerier outlook. now if we can just solve the healthcare problem then I am off contracting...

Chip Overclock said...

I dimly recall that in Pfeffer and Sutton's book HARD FACTS, about evidence-based management, they discuss why upper management frequently gives only lip service to the evidence-based approach: if all decisions were based on hard-evidence, anyone could do it. Hard to make those big executive salaries when your experience or gut feelings count for very little. However, as Ken has pointed out privately, sometimes evidence is difficult, expensive, or impossible to get. That's when executives earn the big bucks.

Years ago I took a management seminar where the leader asked everyone who was a temporary employee to raise their hand. Then she said that those of us who didn't raise our hands were mistaken: we're ALL temporary employees. That has stuck with me as an essential truth.

Contracting is just another compensation model. Full time employees have no more or less job security than contractors. What they do have are benefits: something that needs to be addressed for the U.S. to continue to compete in the global marketplace (see my article "Job Lock and Universal Health Care").