Hiring Secrets of America's Fastest-Growing Companies
In 2013, Inc. magazine, partnering with the Bacharach Leadership Group, surveyed 330 Inc. 5000 firms. The mission: Find out how America's fastest-growing companies hire their best employees. Cornell professor Sam Bacharach, co-founder of BLG, fielded questions from LearnVest's Alexa von Tobel about the survey results.
There's a lot of debate about how much more top executives should make than the lowest-paid employee. What have you found?
First of all, it is not unreasonable for entrepreneurs to expect a "return on their investment" that is commensurate with their startup costs--in terms of time, resources, lost opportunities, and so on. They put their time in and their personal wealth. That said, the companies don't seem to have an income dichotomy, with the gluttons in their castles and the starving peasants below.
It's no secret that salary plays a role in financial happiness, so I was curious to see the responses about pay transparency, which seems to be uncommon here.
It is very rare, to be sure. Only 2.6 percent of respondents claimed that everyone knows one another's pay. For everyone else, employees know for sure what they make and piece together what others make according to job title, role, and so on in the company.
And some have knowledge of what people are paid in their industry. I don't see any big movement for pay transparency in the private sector. It's really a public-sector thing.
I was surprised to see that only 15 percent reported using social media as their favorite means of recruiting. Why do you think this number is low?
Well, the personal touch still counts. In fact, a lot of recruiting is still done via people who know the job candidate well enough to recommend her or him for the position. And, in fact, this is what came out in the survey: The top method for recruiting was "co-worker/peer referrals."
More than 30 percent of those surveyed gave that answer. But only 13 percent said those same folks had an impact on selection. Why?
We are talking about two different things here. The first has to do with the search itself. This is where the peer-referral network shines: getting the right people in the door and in the interview chair. The second is what takes place after the interview--the postmortem, if you will.
By the time the boss gets around to asking for input from the group, he or she has already formed an opinion to hire or not. Getting group input doesn't really prevent a good person from being hired, but if someone made a negative impression all around in the first place, group input will reinforce it.
Only 5 percent of respondents listed "experience on CV" as the biggest factor when selecting an employee. Are resumes no longer useful?
Everyone knows that the CVs have been worked over. Let's face it, applicants have been known to "elaborate" on their experience. I think the leaders surveyed take CVs with a grain of salt.
Given your knowledge of this subject, what results were particularly surprising or intriguing to you?
The leaders, in the job interview, preferred to "let conversation flow." This isn't to say they didn't prepare a roster of questions, but I was surprised by the willingness of the respondents to let the interview take its natural course and ultimately have the unexpected inform their hiring decision.
What's the biggest takeaway from this project?
You should know you're not alone. You all struggle to build a business, find the right people, develop them, and enhance them so they are able, ultimately, to contribute to the bottom line. Also, there are no uniform right answers. What works for one company might be totally the wrong move for another. In other words: Don't be afraid to follow your gut.