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.
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.
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:
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:
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.