Hiring for Culture: How to Engage and Develop the Right People for Your Business

More and more businesses embrace culture as a strategic tool to increase productivity, raise morale and ultimately drive profits. But for a culture to thrive, it must be strengthened through every new hire, and it must be reinforced through every employee development initiative. HR departments that want to nurture happy, productive cultures must learn to evaluate and engage talent based on who they are, not just what their resumes say they do. Michael Civello, Director of Client Relationships for Plum Benefits (a Division of the Shubert Organization), visited TemPositions’ HR Roundtable Series on Thursday, May 2, 2013 to share his presentation, “Hiring People, Not Resumes.” Focusing on culture as a key driver of employee satisfaction and business success, Civello shared how companies can use hiring, onboardi ng and long-term talent development practices to achieve the benefits of a culturally-aligned workforce. When a culture is vibrant and has the full support of an organization, it drives success through strong personal relationships. Too often, employers assume that workers value compensation and monetary bonuses above all. But employees tend to love where they work when “they like who they work with, and because they feel special, valued and appreciated,” Civello explained. Even more than money, people prize workplace camaraderie and simple recognition. Civello briefly described his previous visit to the HR Roundtable in September 2012 to discuss employee happiness. In that session, he divided employees into segments: Group A (high-performing, culture leaders), Group B (satisfactory, open to influence from Group A), and Group C (poor performers, potentially destructive). Through culturally-aligned hiring and development, he noted, smart companies can expand Group A and strengthen their positive cultures. Companies that haven’t worked to shape their internal cultures should start, he urged. The challenge may seem daunting. But by developing support for the effort from the top down, starting small, and keeping initiatives measurable (through surveys and other simple means), HR can start deepening trust, improving teamwork, and ultimately enhancing relationships. This, he explained, can activate Group A to carry the culture banner proudly aiding HR. “You have the ability to change the outlook, climate and bottom line of a corporation by embracing cultural aspects within your role as human capital managers,” Civello told attendees. By embracing culture, H R can help the organization embrace success. Defining Culture The first step to tackling any new challenge is demystifying it. Often, Civello explained, the C-suite will become more open-minded about launching cultural initiatives when they come to understand culture’s true definition and potential. Dictionary.com defines culture as “the total range of activities and ideas of a group of people with shared traditions, which are transmitted and reinforced by members of the group.” Certainly, an employee base constitutes a “group of people.” And Group A, with its enthusiasm and evangelistic tendencies, can be inspired to “transmit and reinforce” positive values that can bring the company the most benefit. Ultimately, Civello stressed, culture means “people have to like each other.” Communication is open and trusting within a positive culture, and strong relationships can be built across levels and departments. Shared traditions and best practices pave the way for better cooperation, and employees feel a more broadly-shared sense of pride when the company succeeds. Choosing traditions and best practices to promote can be a combined act of employee satisfaction-building and pure business strategy. To create an environment that is both fun and productive, leadership should first examine “what makes the company tick.” By identifying the heart of their offering, leadership can then mobilize the entire workforce to support their culture while pursuing ambitious business goals. Civello recommended an exercise called “The Golden Circle” from Simon Sinek’s book Start With Why: How Great Leaders Inspire Everyone to Take Action. To complete the exercise, businesses must answer three important questions, each more important than the last: 1.      What do we do? (outer circle) 2.      How do we do it? (intermediate circle) 3.      Why do we do it? (center of the circle) Most business leaders can respond to the first question readily. The second may prompt more reflection. And the third the Why can be especially hard to answer, Civello noted. When small businesses find sudden success, or grow quickly through merger or acquisition, leadership’s focus on core values can suffer. This, of course, can lead directly to a far less happy culture. If employees don’t know why they’re working so hard, how can they possibly enjoy it? Civello, like Sinek, highlighted Apple as a company that has thrived thanks to a clear, confident understanding of its own Golden Circle. What Apple does is “produce computers and electronic devices,” he explained. How Apple does it is through “sleek design, beautiful products and easy­to-use interfaces.” Why Apple does it? Simply, “to challenge the status quo and to innovate.” This approach doesn’t only inspire customers to purchase products, it also helps Apple attract the best talent and the people who can help their culture of innovation thrive. While the company is flooded with resumes from technology specialists, Apple only hires those who are driven to innovate, whether or not they need training or development to do it. As a result, the company has few to no Group C employees, Civello stressed. They just don’t fit in. This illustrates why knowing your company’s Why is essential to hiring the right people and nurturing them within the right culture. Answering this question clarifies what behaviors the organization needs to promote. These behaviors and the happy, productive POV that frequently go with them can then become part of the the basis for recruiting, managing and developing talent to drive the company to success. “You cannot teach people to be ambitious and motivated and to love what they do,” Civello asserted. “People are not a list of skill sets. They have feelings and desires, and if you can harness those, you will have an effective business. “ Culture and Turnover Of course, not all employment relationships satisfy the feelings and desires of employees. And for businesses, turnover can be disruptive and costly. According to the Society for Human Resource Management (SH RM), turnover can cost the company 50-60% of an employee’s salary. It’s estimated that for every $10,000 in salary over $50,000, employers spend an additional four weeks searching for the right person. Civello offered the sobering example of a company that had to replace the same executive-level position twice in the same year. This employer made the mistake of hiring purely based on skill set and experience, and not on cultural fitness. As a result, both new hires failed to form bonds with their peers in leadership and their departures ended up costing the company a whopping $500,000 i n wasted hiring and referral bonuses, agency fees, salary and training costs. Once leadership embraces how much culture can influence turnover, they become empowered to act. And if there’s anything the company can do to reduce turnover by enhancing its culture, Civello urged, they should try. A smart place to start is probing the reasons why people leave the organization to identify any cultural challenges. Per SH RM , turnover falls into one of two categories: “involuntary” or “voluntary.” Involuntary turnover is prompted by factors beyond the employees’ control, such as illness or mass company restructuring (layoffs). Culture is generally not a factor and need not be considered in such cases. Voluntary turnover also falls into two categories: “functional” or “dysfunctional.” In cases of dysfunctional voluntary turnover, Civello noted, there’s usually nothing an employer can do. When workers choose to make a major career shift, go back to school, or follow a spouse to a new j ob i n another city, no company culture could have influenced their decision to leave. Dysfunctional turnover, however, can be addressed at least in part. This turnover’s two categories are “unavoidable” and “avoidable.” Approximately 75% of all dysfunctional turnover can be deemed unavoidable. But that leaves 25% that can be avoided if the company takes action and develops a more positive, productive culture. Pay attention to what departing employees say in their exit interviews to address this 25%, Civello counseled. They may tell HR, “This wasn’t what I expected.” This sentiment suggests a need for clearer expectations and better communication. They may simply declare, “I’m just not happy here.” This suggests the work experience doesn’t include enough fun activities, or that employees aren’t being affirmed or rewarded frequently enough for their efforts. “In a strong culture, employees know what to expect,” Civello stressed. “They join the company because its culture reflects how they like to operate, and then they like their peers, because the company’s vibe fits who they are.” Culture and Engagement The benefits of an engaged workforce are now widely recognized. Engaged employees are more dedicated and passionate about what they do. They advocate for their organization. Absenteeism drops, and productivity soars. Employees feel valued and energized, and they embrace business goals as their own. As a result, their companies grow and thrive. According to a recent Gallup Poll, 71% of Americans unfortunately characterize themselves as “disengaged” at work. Disengaged employees are less productive than their peers, do sub­standard work, and are more prone to absenteeism. They may not hate where they work, but they’re indifferent to the company’s success, and their lack of motivation is often an issue. Worse, up to 20% of employees may be “actively disengaged” on the job. These toxic, visibly miserable workers not only perform poorly themselves, but actively prevent others and sometimes, the entire company from succeeding. Gallup estimates these employees cost American businesses an average of $350 billion per year in lost productivity. They are, Civello stressed, a businesses’ “worst case scenario.” The good news is that culture is known to be a key driver of engagement. HR can analyze the value that Group A employees bring, assessing their average tenures, salaries, and overall productivity. Then they can conduct a similar analysis on Group C, determining how much their disengagement costs the company. Armed with this comparison, HR can make a clear case to leadership for instituting cultural initiatives to drive engagement. Recruiting for Culture Hiring for culture begins with recruitment and the traditional process of reviewing resumes and interviewing candidates. To screen candidates for their cultural fit, Civello advised, shake up this process. Consider two fast-growing practices: personality testing and narrative-driven application forms. Both can help HR learn more about the personality behind an applicant’s skill set. Personality Testing Personality testing is a fast-growing recruitment trend. There are some limitations on what employers can consider in their hiring processes when it comes to personal screenings, Civello noted. But in recent years, teams of employment lawyers and psychologists have collaborated to create lawful personality tests that employers can use to help determine cultural fitness. In general, these tests are relatively short. They can take as little as 15 minutes to complete, though some may take up to 45 minutes. They’re also convenient. Companies can administer the tests online, so applicants can be pre-screened before they even come i n for an interview. Alternately, they can be asked to complete their test on site, just before they meet HR. Either way, the company will get a different, honest, personal portrait of the candidate to consider. “A resume tells a story, but it only tells our best story,” Civello stressed. “In personality testing, there’s no cheating,” All interviewees are sure to be on their best behavior when they meet with H R, but personality screenings can reveal more of who they really are including the habits and behaviors they will bring to the workplace. Civello reported that he tried a few tests on himself and found the results “scarily accurate,” aligned with feedback he’d heard in performance evaluations throughout his career. He also found he accepted the findings calmly, without getting defensive. No third party (or interviewer that he’d just met) had judged his personality. He had submitted his own honest responses, so he felt completely accountable for the results. He recommended two innovative online resources for personality screenings: Cut-E and No Fail Hiring. Both companies offer off-the-shelf testing as well as custom solutions, and both can be used to evaluate candidates for a wide range of careers and levels. Companies can pay a per-test charge or an annual subscription fee. The cost for most screenings tends to be modest, though customization can make testing more costly. Narrative-driven Application Forms For companies that aren’t ready to dive into personality testing, Civello recommended a narrative-driven approach to employment applications. Airline JetBlue currently uses such forms as part of their online application process. The company asks applicants to share stories about their past work experience, rather than fill in blanks or answer multiple-choice questions. The questions on narrative-driven forms don’t typically focus on past roles or qualifications, but on discovering how (and if) the candidate has worked positively with others in the past. Civello provided several examples:

• Tell us a story about a time you helped a client
• Tell us a story about how you motivated someone else
• Tell us a story about a time you contributed to a team effort

By sharing not only what they did but how they did it, applicants will reveal key components of their personalities. They’ll express the ways they prefer to work with others and help HR assess whether or not their behaviors and habits would make them a good fit at the company. Both personality testing and narrative-driven application processes add time to the recruitment process, Civello acknowledged, so many companies will resist them. After all, most online recruitment and hiring services use auto-filters to screen resumes. This supposedly time-saving practice may eliminate candidates whose resumes don’t feature the right key words but it will also eliminate many individuals whose values and habits may be a perfect cultural match. At the very least, both personality testing and narrative-driven application forms add an extra layer of process that can weed out those who aren’t passionately interested in the company. Only candidates who really feel the organization is right for them will engage. Onboarding “OK, you’ve hired a person so now what?” Civello asked. The attendees all knew the answer: onboardi ng. During this process, H R conducts reference and background checks. The new hire completes forms, provides necessary legal documents, and begins to take part in orientations. There are procedural boxes to be checked, and the company and candidate dutifully check them. While it’s all too easy to think of onboarding as dry by definition, Civello urged the group to think about the process creatively and incorporate culture-building components. Onboarding marks a person’s critical transition from candidate to employee from aspiring hopeful to team member. The experience should establish the company’s culture as positive and supportive, helping the new employee overcome those inevitable new-job jitters. “It doesn’t matter if it’s your first job, your second job, or you’re 30 years into your career,” he explained. “On that first day, it is high school all over again.” Instead of leaving new workers alone to wonder if anyone will like them, HR can make sure they feel welcomed and included. Civello invited the group to share some of their own creative onboardi ng techniques, and many attendees offered successful strategies:

• New hire breakfasts or lunches on the first day, before paperwork is complete
• Monthly welcome events for groups of new employees to build friendships among peers
• Face time with company leadership/founder(s) to make them feel valued upon arrival
• Guest speakers or other special events for new hires to educate and inspire them
• Fun introductory games (sharing personal passions or fun facts) to break the ice

For some employers and their new hires, onboardi ng includes a “probation period” during which the offer may be rescinded. This scenario is even harder on a new hire, Civello noted. At the very least, it would be merciful to rename the experience an “introductory period.” But it would also be wiser to make it more strategic helping both the company and the new hire explore how they could best serve each other. Healthy fast-food company Pret a Manger offers a compelling example of smart onboarding. Pret a Manger hosts open houses regularly, attracting many candidates. At these events, applicants interview with a mix of average employees, managers and HR representatives in quick, fun, eight-minute sessions. Collectively, the Pret a Manger employees vote for their top candidates, ensuring those who advance have demonstrated potential for interacting positively across levels. Successful applicants go on to work for two weeks (paid) at a Pret a Manger store, shadowing employees and trying different roles. While they don’t undergo detailed, formal training, they learn enough about each task to roll up their sleeves and sample the experience. Again, employees at all levels give their feedback to H R to determine which candidates move forward. The star performers who make it to the final stage of onboarding train for 90 days at different Pret a Manger store locations, becoming engaged with more and more types of experiences. As the period draws to a close, the peers who worked with each applicant provide HR with a final recommendation on whether or not to make the hire. They also recommend the starting store location(s) and tasks that they believe will set the new hire up for success. Pret a Manger has found this approach highly successful, Civello noted. Being hands-on from day one is more fun. Immediately working alongside employees builds camaraderie. Trying every task develops empathy. Peer reviews and feedback feel more constructive. And the dreaded Group C (made of poor performers) is eliminated from the process early by the very front-line employees who would be stuck with them during a more traditional probation process. Of course, Pret a Manger’s process is complex. And for many employers, recreating onboarding just isn’t necessary. So start small, Civello advised. Add social touches and experiences to ensure a new hire doesn’t spend their first few days alone, filling out forms or waiting for IT. The candidate will appreciate any efforts the company makes to welcome them and will buy into the organization’s culture if they meet the right mix of friendly and inspiring players quickly. “Everybody has to be on board to onboard,” he quipped. “It really is true that you never get a second chance to make a first impression.” Developing Talent through Proactive Recognition Having recruited and onboarded for culture, it’s time to think about how to develop the company’s new talent over time. Most new employees bring fresh energy and optimism into the workplace. Keeping cultural priorities in mind, the company can keep reinvigorating these workers and ensure they become part of enthusiastic, productive Group A. The key to keeping employees motivated may be tied directly to the way the company recognizes its people, Civello explained. While traditional reward systems recognize a job well done after the fact, employers can often inspire excellent performance through a practice he called “proactive recognition.” Proactive recognition rewards passion and potential. Instead of reactively handing out bonuses, awards, public thank-you’s or “employee of the month” showcases to proven performers (who will only expect greater and greater rewards for subsequent achievements), the company can find creative ways to unearth workers’ interests and talents and reward them with greater responsibility and career growth. One of the simplest ways to proactively recognize a workforce is to welcome their input into company planning, Civello explained. Goals and directives announced from the top too often, with little explanation or concern for widespread buy-in from average employees only establish distance between the C-suite and their workforce. By contrast, sharing the many factors that influence strategy can allow leadership and workers to arrive at conclusions in partnership. Civello recommended challenging the employee base to create short-term plans to enhance the business. As the first step, leadership shares “the numbers” (within reason) to help employees understand the company’s financial realities and to establish simple goals. As the second step, the entire company brainstorms about how to reach those goals challenging workers at every level to get creative, contribute beyond their daily roles, and be part of a bigger solution. Sharing financials, even in broad categories, demonstrates respect. And when workers see how much the company spends on basic expenses like rent, utilities and office supplies, they can come to share leadership’s urgency to increase sales or profits. Average employees see the same patterns within the data that leadership does, Civello stressed. And perhaps more importantly, they interpret leadership’s willingness to share the data as an act of recognition in itself. Empowering workers to help set organizational goals can also prove highly beneficial. Surprisingly, employees often set more ambitious goals than leadership. And when people set their own benchmarks for success, they’re more invested in reaching them, he noted. They strive to meet the challenge they’ve set for themselves. Coming up with creative ways to meet those challenges offers another opportunity to proactively recognize Group A members in the making. Civello made a series of recommendations for structuring these brainstorms:

• Start with games to break the ice spreading laughter and fun
• Announce that “money is no object” to free participants from self-censorship
• Take the brainstorm off site to break out of normal patterns of thinking and behavior
• Build teams across levels and departments, removing hierarchies and divisions
• Select famous, powerful and influential figures (e.g., Madonna, Bill Clinton, Gandhi, etc.) and assign groups to build business plans as those powerful leaders might
• Assign task forces to build parts of the plan that they may not ordinarily influence (e.g., marketing department creates the operations plan, and vice versa)
• Invite these task forces to present their ideas to the company and make a fun case for adopting their strategies
• Empower employees to vote for the favorite concepts or initiatives, and if any have merit, consider implementing them on a trial basis

When employees participate in these fun exercises, very interesting things happen, Civello noted. They don’t perceive the event as “work,” so they leave inhibitions behind often revealing potential that could benefit the company. Junior employees with charisma and natural leadership talent may begin to moderate and direct conversations. A n office manager may demonstrate unexpected creativity. A creative professional may reveal a head for numbers and budgeting. The solutions that these teams create can also provide insights for leadership. When a marketing professional considers customer service, or a customer service representative considers technology, fresh approaches can be revealed. More importantly, the people who champion these fresh approaches may deserve more attention from leadership than they’ve received. Their “crazy ideas” may reveal true passions, and recognizing their contributions can motivate these workers to reinvest in the company’s success. “You’re cultivating your future leadership talent by simply allowing them to speak,” Civello explained. “A nd this approach can be a game-changer. People will be much less likely to leave your organization if they’ve created the plans they’re executing.” If leadership isn’t ready to welcome the employee base into strategic planning, there is still much HR can do to initiate proactive recognition. When asked what they would like as a reward, most workers are realistic. They tend to ask for a little more work-life balance, or niceties like Summer Fridays. They rarely ask for big bonuses or financial pay-offs that they know the company can’t afford. So instead of wrestling with the C-suite to find resources for proactive recognition, use the very numbers they’re worried about to make your case, Civello advised. Calculate how much Summer Fridays, for example, would cost the company, and compare it to leadership’s planned bonus structure. Find savings and return them to the company, or request that any “found funds” be applied toward more elaborate employee appreciation events (e.g., offsite celebrations). Ongoing Cultural Programs Whether leadership chooses to invest significantly in cultural initiatives or not, HR can still lead the effort to develop and maintain a vibrant company culture. Civello rounded out his presentation by reviewing a wide variety of culture-building activities. Many, he noted, cost the company very little but can keep the workplace energized and engaged. Examples included:

• Friendly competitions
• Neighborhood photo contest - Happy Hour showdown (different departments plan a series of competing events)
• Quote of the week/month contest
• Outdoor excursions - Group lunches in local parks

• Lunch-time walking tours (some Business Improvement Districts will arrange for free)
• Sharing hidden talents or passions - - Employee-led classes and workshops on personal interests like music, crafts, etc.
• Craft fairs (employees sell their own home-made items) - Internal TED-type conferences led by employees

• Company cookbook (featuring holiday recipes, cooking light, etc.)
• Themed potluck lunches or dinners
• Movie afternoons (projector i n a conference room, etc.)
• “Freaky Fridays” (employees change places with their bosses for a few hours)
• Peer recognition days (everyone nominates a co-worker)
• Charity tie-ins (partner with local groups for special events)
• City guide creation (monthly calendar of local, free/low-cost cultural events)
• “Big Ideas” forum (opportunity for all employees to share inspirations)

Culture for Business Success In closing, Civello urged attendees to remember the many benefits of engaging both new and existing employees in a positive culture. He reminded them to focus on Group A, the community that can serve as cultural ambassadors for HR. And perhaps most importantly, he encouraged attendees to embrace their role as human capital managers and lead culture initiatives boldly. “HR is at the epicenter of a company’s culture,” Civello stressed. “And this is a very powerful position to be in.” By wielding this power wisely, recruiti ng/onboardi ng for culture and developing key talent through innovative reward programs, HR can keep the employment experience positive and fun for employees while driving the business toward success. Anne DeAcetis is a freelance writer based in New York. Reach her at anne.deacetis@gmail.com. The HR Roundtable is a breakfast forum for human resources professionals in New York City sponsored by The TemPositions Group of Companies. TemPositions, one of the largest staffing companies in the New York tri-state area with operations in California, has been helping businesses with their short- and long-term stafing needs since 1962. Visit them online at www.tempositions.com or email them at info@tempositions.com.