background check

“I Want to Hire My Competitor’s Top Sales Person …”

When a client who doesn’t know us asks us to help them find a sales person, we’ll ask the client what they think they’re looking for.

Hiring, Sales, Competitor, Competition,

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A typical first response is “I Want to Hire My Competitor’s Top Sales Person.” And it’s often accompanied by, “And I want them to bring me their book of business with them.”

On the surface, this sounds like a perfect formula for creating an outstanding sales team. Find the best available people and bring them on board. Their loyal customers will follow them and revenue will skyrocket. Plus you will have weakened your competitor by taking away a key asset.

However, here is the reality.

If you have really good people working for you, you’ll do anything you can to have them stay with you. Having an employment contract or agreement is one way to document the responsibilities of both employer and employee.

In the case of sales personnel, you want to prevent them from leaving your company and harming your business.

One option is a non-compete clause. This basically says that, when an employee leaves your company, they cannot work for a company that is a competitor of yours. It sounds good in principle but the courts are not upholding these non-compete clauses because they can limit an employee’s ability to find alternate employment.

The preferred option is called a non-solicit clause. This type of clause does not prevent an employee from going to work for one of your competitors but, if he/she does go to a competitor, he/she cannot call on companies that are clients or customers of your company. This type of clause IS enforceable.

To get back to the original response to our question about what a client might be looking for in a sales rep, it IS possible to hire such a person.  However, if they have a non-solicit clause in their employment agreement, you cannot have them call on customers they had at their previous employer, let alone bring along a book of business.

Were you to attempt this, one possible outcome is that your competitor could sue your company. Another possibility is that they could sue your new sales rep and restrict his or her ability to approach customers through an injunction. This could render your new hire essentially ineffective while they’re tied up with lawyers.

Another reality is that customers tend to be loyal to reliable vendors, not the vendor’s sales person.  Companies have moved from having a single person making buying decisions to having procurement teams to reduce the personal influence a sales person can have on a buyer. Unless a vendor puts a totally inept person in charge of an account, the account will stay with the vendor as long as product quality and service are kept at consistently high levels and pricing is competitive. It actually costs companies money to change vendors – to put the business up for bid, to assess bids, to qualify a new vendor, among other factors – so companies avoid making changes unless it makes economic sense to do so.

Here are three things you should be doing.

1. Protect your sales team. Review your employment agreements with all your sales staff and add in a non-solicit clause to each one. This can make your top performers less attractive to your competitors to hire away.

2. Hire strategically. Hiring a top performer from a competitor can and does make a lot of sense in some instances. But you need to bear in mind that you will have to focus them on markets where they won’t have to call on customers from their previous employer – perhaps in a business development role. Or, if they are senior enough, you might consider assigning them to key accounts who are not customers of the competitor you hired them away from.

3. Consider New Talent Pools. While hiring from within your industry can save on training and capitalize on existing contacts, it may not be your best strategy for improving the overall caliber of your sales team. Industry studies suggest that only about 25% of ALL sales people are rated very good to excellent so, is your industry likely to yield the best quality candidates? Often what happens is that marginal performers make the circuit of employers within an industry, never really contributing much to any given employer.

Excellent sales people are excellent sales people because they have the discipline to consistently follow a process.  The process is independent of industry, product or company. Excellent sales people can be taught the technical attributes of a product and the benefits that make each product different from a rival product. Excellent sales people know how to research an industry to find the right companies and contacts.  They don’t rely on a Rolodex alone.

Bringing in an excellent sales person from outside the industry has other benefits. They bring fresh thinking, which could lead to new applications for an existing product, better ways of selling the product.  They’ll ask insightful questions that could help you become aware of attributes that resonate with customers that perhaps your staff had consistently overlooked or undervalued.

So, hiring from a competitor can be a good move.  But don’t expect sales people to have their customers follow them to you.

Best Practices for Checking Candidate References

Reference CheckingNearly everyone has been asked at one time or another for references when they’re applying for a job. It’s usually the last step in the hiring process before an offer is presented.

However, fewer people have experienced being asked to supply a reference for someone and even fewer know the proper technique to use to discover the referee’s true experience with the person.

The goals of reference checking are to:

  • verify the candidate’s experience and achievement
  • verify the candidate’s competences
  • assess whether the candidate can indeed do the job for which he/she is being interviewed.

A good reference checking process will be

  • Fair and unbiased
  • Behaviourally focussed.
  • Legally defensible

REFEREES

Usually, it is the candidate who selects the referees and, most often, the people given by candidates as referees tend to be people for whom the candidate has worked.  If the candidate is currently employed, he or she should look at past employers or co-workers  or outside the organization – to vendors or customers.

We prefer, whenever possible, to interview referees who were peers and subordinates in addition to supervisors.  Some people are very adept at “managing upward” so they always look good in their supervisor’s eyes, while their behaviour with peers and subordinates may be very different from what the supervisor knows.  Going with a 360° background check helps unearth any bad behaviours that may only be revealed to people at or below a candidate’s level in an organization.

A good rule of thumb is to focus on the last 10 years of the candidate’s career or their last 3 positions to get the best reading on their competencies.  Usually, the target number of referees given by a candidate is 3.  Going with 3 referees is fine if the scope is to interview only referees for whom the candidate reported to and provides an opportunity to see if there is consensus among the referees.   In the case of a 360° review, there can be as many as 6 or more.  

QUESTIONNAIRE STRUCTURE

At HIRE GRAY MATTER, we use a standard form for asking questions during the reference checking process. Depending on the position being filled, the process of the reference checking interview with the referee can run from 15 to 45 minutes.

Some reference-checking firms will send the referee a copy of the questionnaire to help them prepare for the interview.  Others tend to only give the questions over the phone, thinking this will promote more candid responses.

The questions asked during a reference check should be standardized so all candidates receive the same process, which helps ensure there are no biases introduced into the process. You also can add more role-specific questions depending on the position being filled to explore thing like leadership, but all referees consulted in checking a candidate’s references must be given the same questions.

In developing role-specific questions, think of the competencies required to do the job and structure questions that explore these

There should be no questions about age, gender or national origin etc. that could potentially introduce discriminatory comments.

The questions should also be open-ended to require the referee to give more than just a yes or no response. The answers are in their terminology, not ours.

Throughout the process, take detailed notes, sometimes probing the referee if an answer is unclear or ambiguous.

 

THE REFERENCE INTERVIEW

The process begins by establishing the working relationship between the candidate and the referee.  Where they worked. How long they worked together. Job responsibilities.  These are non-controversial topics and help the referee become comfortable while establishing a flow to the process.

Then verify details from the candidate’s resume – education, language skills, work experience (including any employers the candidate may have worked for since leaving the referee).

The next stages of the interview involve assessment of the candidate’s competencies.

One area is overall job performance, to get a sense for the candidate’s competence in a job role.

Ask behavioural questions, much as you would encounter in a job interview. For example, “Can you describe a situation in which [the candidate] had to overcome a major setback” or “What made Candidate successful in this role?”

In this area, you can introduce behavioural questions that were answered by the candidate during the interview process to validate his/her response.

Ask the referee about what made the candidate successful in his/her role and what motivated the candidate’s performance.

You also should explore the candidate’s ability to manage change within an organization.  Since the executive level is principally responsible for driving change within an organization, it represents an opportunity to explore the candidate’s leadership skills and style.

Lastly, because it often is more sensitive, probe on interpersonal skills.

This is a way of getting a more intensive assessment of leadership skills.  Ask about how the candidate’s verbal and written communication skills, how he/she coped with conflict, delegation and listening skills.

To wrap up the process, work with the referee to assemble a profile of the candidate – his/her strengths and weaknesses, areas for development.  One question we like to ask is whether the referee would hire the candidate again for the same role.   This usually signals the level of commitment to and conviction about the candidate.

If you’d like to learn more about our reference-checking process at HIRE GRAY MATTER, please contact us at info@hiregraymatter.com.

 

 

How Can I Be Sure?

Your search for a new employee has been progressing smoothly.

You engaged a recruiter to help you sharpen up job specifications and to identify and screen potential candidates.

The recruiter has come back with a short list of 5 candidates for you to interview.

Your hiring team has interviewed all five candidates and narrowed it down to two finalists.

Now your team is having trouble deciding between the two finalists.  Both are capable of doing the job and their past experience has demonstrated that. Both have their strengths as well as weaknesses. For example, Heather is more introverted than Tom but has asked some very thought-provoking questions. Tom, being more outgoing, was able to build rapport with the hiring team, but didn’t seem to have analytic skills as strong as Heather’s.

Background checksThis is the kind of scenario in which you may need to go beyond the interviewing process to use some other way to determine which is the better candidate.

Often, this is the time to use assessment tools to obtain an objective measurement of a candidate’s abilities or talents.  We’re going to use assessment tools in a broad context for purposes of this post.

There are three goals of doing assessments:

  1. to help ensure you’re hiring the best person for the job role in terms of fit, skills and experience
  2. to help ensure the person you’ve interviewed is the person they really are, and thus…
  3. to avoid making a poor hiring decision that proves to be costly.

One way a poor hiring decision can become costly is to hire an employee who commits fraud or theft.  In this post, we’ll introduce you to some of the types of assessment you should be considering as part of your hiring process.

 Credit Checks

A 2011 study of what is termed occupational fraud (aka white collar crime) by the Certified General Accountants Association of Canada revealed that 76% of large businesses in Canada used pre-employment screening as an anti-fraud measure.  However, less than half – 45% – of small-to-medium sized businesses (SMEs) did any kind of pre-employment screening. This difference in use of screening is reflected in the incidence of occupational fraud: about one-quarter of SMEs experienced occupational fraud in the previous year compared to 3 to 5% of large businesses such as banks and insurance companies.

It’s sad to see smaller businesses impacted in this way, because the cost of doing background checks can be less than $100.  The cost of a bad hire is estimated to be, on average, about $25,000.

Credit checks are also used when the role involves fiduciary responsibilities to ensure the employee does not have debts that could prompt him or her to embezzle or misappropriate funds.  They can also flag irresponsible behaviour.

An international survey by the Society for Human Resource Management in 2009 found 47% of companies ran credit checks for certain positions while 13% did this type of screening for all jobs.

Occupational fraud is prevalent at ALL levels of the organization chart. Occupational frauds are committed by all levels of line employees in an organization. 42% were committed by employees, 38.6% by managers, and 19.3% for owners/executives.

Theft and fraud prevention was cited by 54% as the main reason for checking job applicants’ credit history. The second most common reason was to reduce the company’s legal liability for negligent hiring, while the third reason, cited by 12% of respondents, was to assess a job candidate’s trustworthiness.

Criminal Background Checks

Criminal background checks are used when the role involves some form of fiduciary responsibility to ensure there has been no history of fraudulent behaviour.  They also are used when a role requires interaction with vulnerable people such as children, the elderly or the disabled to ensure there is no history of abusive behaviour. 

To avoid the possibility of claims of discrimination, the position must have the requirement of passing a criminal background check written into the job description to verify there is a Bona Fide Occupational Requirement (BFOR).

Before doing a criminal background check, you must have written authorization from the candidate to do so.

Credential Checks

Through their resumes and the interviewing process, candidates disclose information about their skills and achievements.  To some extent, hiring managers have to accept what the candidates have told them in making their decisions about which person to hire.  But how do you know they haven’t misrepresented themselves?

An initial step should be to verify the credentials the candidate claims to have:  university or college degrees, professional certifications etc.  This can be accomplished by contacting the educational institution or professional association. In the case of professional accreditations, the check should be to ensure the candidate is a member in good standing of the professional association, dues are up-to-date and that there have been no disciplinary issues within the profession.

Driving Record Abstracts

If the job role involves driving a company vehicle (such as a sales representative), you should procure an abstract of the candidate’s driving record. This will reveal more than just speeding tickets, but also DUI’s and leaving accident scenes, which could indicate behavioural issues.

There are companies such as BackCheck and Hire Performance that provide background checking services. At HIRE GRAY MATTER, we use agencies like these because they have sound processes, reasonable fees and fast response.

Personal References

The most common form of background check is to ask the candidate for specific individuals who can vouch for their performance and achievements and then contact these individuals.

In our next post, we’ll explain how we approach doing reference checks.  There’s more to doing reference checks than confirming dates of employment and obtaining a sense of the candidate’s character.