People have been hiring employees for centuries, and there are many different approaches to hiring. To some people, hiring is an art. To others, hiring is about gut feelings. Some think it’s just the luck of the draw and some rely on technology and “science” to guide them. A recent debate that has found its way into the conversation is whether it makes more sense to hire for potential or hire for skill in today’s tight job market. Which approach is best for your company?
Hiring For Skills
Hiring for skills makes sense because a new employee with the right skills can jump in and make contributions from day one. It is often more expensive to hire someone who checks off every box on your desired skill list and can command a higher salary. However, it also cuts down on onboarding costs because these employees can ramp up more quickly, providing a faster ROI.
People with a strong skill set are also in-demand in the market. Make no mistake, other companies are likely keeping in contact with them to try to lure them away. People with robust skills know they are in demand and can leverage their current position to command an even higher salary with a competitor, often within the first year or two of accepting a position. People with skill sets that are in demand are also the ones most likely to accept counter offers. This wastes everyone’s time and causes frustration.
Hiring For Potential
Hiring for potential can solve a lot of common problems managers encounter during the hiring process. If someone doesn’t meet all your skill requirements, they command a lower salary and the time-to-hire is faster. An added benefit is you can teach someone with potential “your way” of doing things, without them having to unlearn bad habits or different methods picked up in their previous experience.
If you can hire an employee with less experience but who you can see has the potential to be a superstar with your organization, that chance could prove to be extremely beneficial. Your company benefits from lower initial salary and has the potential of developing that employee into the star they can become. That development could lead to loyalty and long-term trust for the business.
However, there are some drawbacks to hiring for potential. First, it will take that employee longer to ramp up to the level of productivity you need, which means your existing staff will still have to share the load as they did when the job was empty. This can negatively impact morale, engagement and their feelings about the new employee. You must also factor in the hard costs of training and mentoring from senior staff that will be required to teach the new employee essential skills. If that person doesn’t stick around, the amount of wasted resources can be vast.
Which Is Right for Your Company?
Remember the old saying, “We hire people for what they know and fire them for who they are.” In the end, the person who matches your core values best will almost always be a better fit in the long run. Too few employers give enough importance to core values and personality traits. However, given the pros and cons of each approach, the answer isn’t quite so simple. The reality is there may be times when hiring for skill is the right and necessary approach and there will be times when hiring for potential is best. It often depends on the requirements of the position, the availability of talent in the market who possess the skills you need, and your company’s ability to support new employees through onboarding.
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