Risk Analysis & Hiring

Everything you do, hiring included, involves some form of risk. To effectively and efficiently deal with the risks associated with hiring, your job, when hiring, should entail identifying, preparing for and managing risk. Adequate risk analysis, when hiring, will ensure that you limit potential disruption to current operations and keep things as cost-effective as humanly possible.

So how do you identify, prepare for and manage risk effectively when hiring?

Let's Start With The Basics. 

Just what is risk analysis?

In its simplest form, risk analysis is an analysis that helps you properly identify, prepare for and manage problems. Specifically, what you are analyzing is the probability of something going wrong and the negative effects of occurrence.

The Steps.

When hiring, in the event that you decide (wisely) to perform a risk analysis, these are the suggest steps:

1. Identify The Risk.
   
   Identify existing and possible risks associated with the on-boarding of a new staff member. Risks you should seek to identify are:
   
   - Human Risks: Risks associated with the illness, death, injury or loss of the new hire or those that would directly impact them and/or their work.
   - Operational Risks: Risks associates with business operations.
   - Reputational Risks: Risks associated with a reduction in external and internal consumer confidence.
   - Procedural Risks: Risks associated with internal systems, fraud and accountability.
   - Functional Specific Risks: Risks associated with position specific duties and tasks.
   - Financial Risks: Risks associated with business profitability, market share, market fluctuations and available capital.
   - Technological Risks: Risks associated with technology.
   
   The list above is a great place to start when completing a risk analysis when hiring. Try as best you can, without bias or too much optimism, to look for vulnerabilities in the potential hire. If you work with others in the hiring process, ask them to do the same.
   
2. Prepare For The Risk. 
   
   Once you're aware of the possible risks associated with a new hire, you need be aware of what the likelihood of those risks being an issue are and the possible effects. The best way to prepare for a possible risk, is to assign a value to it, a literal value. How do you accomplish this?
   
   A simple formula.
   
   Probability X Cost = Value
   Example:
   
    WorkReply is considering hiring Sue. When a risk analysis was performed, one of the risks identified was a functional specific risks. The initial phase of the analysis suggested that given her previous occupational experience and the lack of direct relation to the position we are considering her for, there is a functional specific risk. Sue has never performed some of the specific duties and tasks related to the position. 
   
   To determine the probability, we need to ask ourselves 'how likely is the effect of risk to be a problem'. We decide that the likelihood of the effect of the risk being a problem is moderate, because although she has not had any direct experience, all her pre-employment testing indicates that she is more than capable of learning, in a timely manner, the position specific tasks and duties. Probability is on a scale of 1% to 99%. Probability, when preparing for a possible risk, can never be 0% or 100%. If the probability is 0%, that means the risk will certainly never be an issue. Therefor, it is not even a probable risk. If the probability is 100%, that means the risk will certainly be an issue because it will occur, guaranteed. No if's, and's or but's. It is guaranteed to happen. In this instance, you would be analyzing results, not risks. The lower the number assigned to the risk, the less likely it is to happen. The higher the number assigned to the risk, the more likely it is to happen.
   
   We decide to assign the moderate probably of 40% to Sue.
   
   To determine the cost of the functional specific risk, we need to figure out the cost of the risk. Training for the position specific tasks and duties in question would require 10 hours of training. You could determine the cost 1 of 2 ways. If the position is a direct revenue generating position, generating say $300 per day and she works 8 hours per day, she generates $37.50/hour in revenue (with her salary already in consideration), multiply that by the 10 hours of required training and you arrive at a cost of $375. If the position is not a direct revenue generating position and Sue would make $15/hour, multiply that by the 10 hours of required training and you arrive at a cost of $150.
   
   For the sake of the example, Sue's position is not a direct revenue generating position and  we figure the cost to be $150.
   
   To determine the value of the identified functional specific risk, we multiply the probability by the cost.
   
   0.40 (Probability) X $150 (Cost) = $60 (Value)
   You prepare for the risk by asking yourself the REAL question.
   
   What is the REAL question?
   
   Let's go back to the example, Sue.
   
   In Sue's case, the REAL question we need to ask, when preparing for the risk associated with hiring Sue is NOT if she qualified for the job based on her direct previous experience.
   
   The REAL question we need to ask, when preparing for the risk associated with hiring Sue IS....
   
   
   Can we afford the risk of $60 to hire Sue and make operations more effective and efficient? 
   
   
3. Manage The Risk. 
   
   Once you have identified and adequately prepared for the risks associated with hiring someone, you need to make sure you are prepared to manage the risks. It is important to consider the costs of managing risks, in whatever way you manage them, because if it is not cost-effective, it is not justified. When it comes to managing the risks of hiring, you have 3 options:
   
   - Use your existing resources.
   - Accept (and seek to minimize) the risk.
   - Invest in and acquire new resources.
   
   Conducting a proper risk analysis when hiring may require a little more work on your part, but it will be cost-effective in the long and short term. Also, a proper analysis should aid in the accuracy of your employee reviews, clearly showing you what progress is, or is not, being made. 

Shoes To Fill

Some positions are so complex, require so much skill and expertise that you wonder which is harder, the job, or finding the right person for the job. While talent may surround you, qualified talent, for the job you need completed, is most likely in short supply. So what are you to do? How are you to meet the needs of your organisation, with this void?

Start by recognizing that talent, qualified, quality talent, is out there.

You can't continue to look for a size 22 shoe in a regular department store shoe department. It's time  for you to head to the specialty store. The shoes you need to fill, are simply too big, too special, for a regular shoe department.

If you want to continue to walk around with shoes that are too small and deal with the embarrassment, you most certainly have that option. However, if you wish to get shoes that fit, you need the best. Get to the specialty store!

Like specialty shoes, specialty talent is something that everyone wants. Ask anyone who shops at a specialty shoe store and they'll tell you that things can get nasty once you're there. There aren't too many size 22 shoes in town to begin with, but if you find the only pair, at the only store in town, are you going to just let someone walk away with the shoes? That same mind frame is necessary when looking at your specialty talent. Everyone wants them. They are are far and few between. You must be prepared to compete for the talent you require.

Things can get nasty. Be Prepared.

Contact WorkReply Today.

3 Interview Questions To Avoid

Friendly. Harmless. Deadly.


More employees, more problems. Seriously! 


When hiring a new member of your team, do you know what questions to avoid? Some questions you may consider to be friendly or harmless can cause more harm than you ever thought imaginable. Hiring an individual is serious business and done wrong, you could be in serious trouble.


Avoid asking the following questions during job interviews:

How Old Are You?

Age related questions are never, never, never.... NEVER appropriate to ask a candidate during a job interview. Age is such a hot issue that there is Federal law prohibiting discrimination based upon ones age. If you, for whatever reason, must inquire about a candidates age, do so by asking more appropriate, more indirect questions, such as: Are you over 18? ... This question is generally safe to ask. 

When Did You Move To The United States?

You can and should always verify a persons legal right to obtain employment in the United States. However, you should never ask a candidate directly about citizenship or their birth country. 

Are You [Insert Any Religion Here]?

I can't ever imagine a time when a candidates personal religious affiliations would ever be any of your concern. You should never ask about a persons religious affiliations. Because some religions observe certain days/holidays as days when work can not be done, you can ask about a candidates availability. When asking about a candidates availability, you should always inform the candidate that your organization does make reasonable exceptions for people to exercise their religious beliefs. 

Above are 3 interview questions to avoid asking candidates during job interviews. There are many more questions you should avoid asking interviewees to avoid legal issues. Educate yourself. Hiring is serious business.