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How to hire for a cultural fit

About 30 years ago companies began talking about workplace culture and how employees needed to be a good “fit” to be a success. The idea that prospective employees should be screened for more than technical capabilities began to take hold. Back then, companies that did a good job of making their cultures known and recruiting with culture in mind earned a status as forward-thinking and progressive.

Southwest Airlines® is often hailed for its success in hiring candidates who fit the airline’s culture.[1] In Southwest’s case, employees must be able to give guests a top-notch customer service experience with a large dose of fun. It is no secret that this formula has propelled the company to financial success.

Today, as three generations work together—millennials, Gen Xers and Baby Boomers—the need to ensure that, despite their differences, they all are working toward a company’s core set of values is of utmost importance. We also know much more than we did decades ago about how cultural fit goes hand-in-hand with company success.

This Blue Paper® will discuss how to hire people who fit your company culture and how to explain your company culture to prospective employees. This paper also will outline how to develop a culture handbook to be used both by employees and as a recruitment tool.

Why is cultural fit important?

Before analyzing why it is important to find employees who fit your culture, we should first define company culture. Forbes® contributor Erika Andersen describes corporate culture as “patterns of accepted behavior and the beliefs and values that promote and reinforce them.”[2]

Statistics clearly show why hiring for a good cultural fit is important—it’s estimated that turnover due to poor fit costs an organization 50 to 60 percent of that person’s annual salary[3]. Employers who take cultural fit seriously may reap financial benefit from more than just employee retention. According to one study, college students said they would accept 7 percent less pay to work for a company that fit their values.[4]

Netflix® is one of those companies that has benefited from hiring talent to fit its culture. Netflix’s decision to hire people who put company interests first helped propel it to adopt non-traditional practices that heightened people’s desire to work for the company.[5] “Most companies spend endless time and money writing and enforcing HR policies to deal with problems the other 3% might cause,” wrote Patty McCord, Netflix’s former chief talent officer. “Instead, we tried really hard to not hire those people, and we let them go if it turned out we’d made a hiring mistake.”

Netflix points to its approach to hiring and culture as a reason for company success. In 2013, for example, its stock tripled, it won three Emmy® awards, and its number of U.S. subscribers grew to 29 million. Other business leaders took notice. McCord and some of her colleagues developed and shared online a no-frills presentation on Netflix’s company culture and hiring practices. More than 5 million people have viewed the presentation since it was released.

Many times, employees themselves recognize poor cultural fit after being in a job. According to a 2013 Gallup poll, 70 percent of respondents said they disliked their current job or felt disengaged.[6] Poor management and poor cultural fit topped the reasons employees cited for not feeling connected in the workplace.

Obviously, employers want their team members to be happy—happier employees make more productive workers. In fact, the authors of the book, “Tribal Leadership,” found just how much a good workplace culture influences employees:[7]

  • Friction among employees goes down, resulting in less stress
  • Employee retention increases, meaning recruiting costs decrease
  • Employees tend to learn more from each other
  • Employee health improves, thereby reducing injuries and sick days

The desire to match employees with culture is high among employers, who say they have put practices into place to increase the chance they hire the right team members. A 2013 Cubiks survey of employers found:[8]

  • 82 percent believe cultural fit is important
  • 59 percent have rejected applicants due to poor cultural fit
  • 32 percent have an objective way to measure cultural fit

Getting hiring managers on board

Numerous tips exist to help employers hire for cultural fit. However, none of them will be effective if hiring managers don’t fully understand how to properly judge a candidate. Many hiring managers believe cultural fit is synonymous with hiring people who are like them. In other words, they often ask questions about hobbies and interests, choosing people they personally like and get along with rather than people who actually are best for the organization.[9] Their argument for doing so generally runs along the line of “similar people work best together.”

While the argument may hold in some cases, greater team diversity generally leads to improved creativity and higher performance. As “The New York Times” writer Lauren A. Rivera says, “Too much similarity can lead to teams that are overconfident, ignore vital information and make poor (or even unethical) decisions.”[10]

To ensure that hiring managers are evaluating candidates on cultural fit rather than personal biases, company leaders and human resource managers should develop a list of values, traits and behaviors that predict employee success and then create checklists and other objective ways to measure candidates.[11] In addition, assigning a weight to each of the items on the checklist will ensure greater impartiality.

How to hire for cultural fit

Sean Storin, CEO of the recruiting website One DegreeSM, says good hiring has three prongs:[12]

  1. What a candidate knows. This includes the prospect’s skills and knowledge of the tools and technology needed to get the job done.
  2. How the candidate lives. What are the candidate’s personal values and how do they align with your company’s values?
  3. What the candidate wants. In what type of environment does the candidate excel? Storin argues that this is the most important piece and where hiring managers should put focus.

The best insight into assessing a candidate for cultural fit is, of course, the interview. Experts agree that behavior-based, open-ended questions lead hiring managers to the information they need. Behavior-based questions give interviewers an idea of how a candidate handled a situation in the past, which gives an indication of how the candidate may respond in the future.[13] Questions like “Tell me about a time you needed to be flexible” or “Give an example of a time you had to build rapport with a person in a stressful situation” get at the soft skills needed to do any job. Interviewers should listen to the answers carefully to determine whether the candidate’s responses mesh with the company’s culture.

Examples of other questions that get at cultural fit include:[14]

  • What type of culture do you thrive in? (Look for a response that correlates to your own company culture.)
  • Describe your ideal workplace.
  • Why do you want to work here?
  • Describe what you know about our culture. What is it about our culture that attracts you to this position?
  • What best practices would you bring with you from other organizations? Do you think you could successfully implement them here?
  • Tell me about a time when you felt you were not a good cultural fit in an organization. Describe the circumstances that made you feel that way.

If your culture is creative or requires people to think through problems a certain way, you may also consider asking a problem-solving question or two in which the actual answer is unimportant (and maybe impossible to know without some assistance).[15] Asking how much time it would take to ride a tricycle between two cities or how many golf balls it would take to fill a school bus gets at a candidate’s creativity and thought process. As candidates work through these brain twisters, note their problem-solving skills and any innovative ways they work through the problem.

The answers to these questions should pull back the curtain on the candidate’s work ethic and work style, and whether that style matches your environment and team dynamics. You also should look for correlations between the candidate and current or previous employees.[16] If a candidate reminds you of another employee, think about how that past or present employee performs (or performed) in your environment. Similarities to a problematic employee don’t automatically mean the candidate is not worthy of hiring, but it should raise a red flag.

Branching out beyond a manager-candidate interview is also crucial to determine cultural fit. Team interviews or one-on-one interviews with multiple people provide various points of view on a candidate’s potential success.[17] Consider taking the candidate on a tour of your organization. You may even want to invite him or her to a team meeting or lunch.[18] All of these scenarios may give insight on a candidate’s comfort level with the team, as well as the team’s first impression of a potential new co-worker.

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