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Hiring on Potential: When Does It Make Sense?

With the Australian Human Resources Institute reporting increased employee turnover rates and a perceived ‘skills gap’ are never too far away from Australian employers’ minds, does it make sense to hire on potential rather than experience?

Hiring on potential is hardly a new concept. Australian businesses have always valued the nurturing and developing power of apprenticeships and many astute employers have frequently dipped into the pool of talented graduates available.

But should we be changing our entire hiring approach and emphasis?

In these times, where social media creates new ideas and opportunities for young people daily, should we acknowledge that our organizations are not necessarily geared up to attract employers who want to stay with us for the next 20 years?

Of course, we need to change our focus and try to provide working environments that are more suitable for the social media generation. But we should also look increasingly at attitude and potential when we are hiring.

That is, if we hope to keep employees beyond the next 6-12 months, and possibly become future leaders.


Potential versus performance

Traditionally, we have looked at resumes, called candidates in for interviews, and made decisions based on a combination of qualifications, experience, and personality.

For junior roles, we had to consider potential; but for anything more senior, we wanted people to come in and start making a positive difference immediately. So we hired largely on skills and experience.

But do these people necessarily make good leaders?

The answer is a resounding ‘no’. They may make good leaders, but that would be a pleasant surprise, a nice accident, if everything turned out well. We didn’t necessarily hire them with that in mind.

If it’s more future leaders we need, then we need to start hiring on different grounds: high potential, strong motivation, tenacious commitment, strong adaptability, and healthy curiosity, rather than unbeatable skills, superb expertise, impressive qualifications, and high performance.


The importance of attitude and emotional intelligence

Performance is, of course, one parameter that comes into play when hiring future leaders. But time and time again, we see people promoted into leadership roles based solely on performance.

Besides the fact that past performance does not guarantee future success, leadership roles involve many skills and attributes that cannot be gained from ten years of success in the job.

Leadership demands the ability to form strong relationships, to connect with people, to empathize with them, to be self-aware, to listen, to have the desire to grow, to inspire with a vision for the future…

Many of these attributes are connected to what has become known as ‘emotional intelligence’ or EQ. But how often do we assess that in interviews?

Sometimes, we assume a great attitude or we assume the ability to build relationships; but they are just assumptions that tend to disappoint when reality bites.

And it’s not just in leadership roles that this is important.

A study by Leadership IQ tracked the turnover rate of 20,000 new hires. Almost half of them failed within 18 months. Interestingly though, of those who failed, only 11 percent did so due to a lack of technical skills. The other 89 percent were unsuccessful due to lack of coach-ability, emotional intelligence, motivation, and other indicators of low potential.

So, if we overlook these factors – or recognise them but decide not act to on them because of great experience and skills (as is often the case in interviews) – we may be setting ourselves up to fail.


‘Horses for courses’

You may have heard the term ‘horses for courses?

It essentially means that different people are suited to different things. In this context, it comes to mind because we need different approaches depending on the roles we are filling.

Of course, not everyone we bring through the door can become a leader. And, if our Accounts Payable person retires, we need to find a suitable replacement with the right skillset! Likewise, nobody wants to hire a potentially good electrician!

However, for the sake of building a cohesive company culture where employees are engaged, and where there is a career path that provides hope for the future, it is important to consider attitude and potential.

The time to be thinking about filling senior management roles is not when they become vacant – but years before!

Ignoring it leads to the situation we have now – with many organizations finding it difficult to fill key roles with ‘qualified’ people.

By changing our focus on what ‘qualified’ means, we may be opening up possibilities and widening our net considerably.

Rather than presenting a closed door, where only the ‘most qualified’ get through, we are literally creating a new pool of potential stars who could walk into our organization, develop and grow into new roles, and make a positive, long-term difference.

Amongst other things, I help organizations identify strategies for effective hiring practices. This can have dramatic effects on company culture and staff retention. Start the conversation by emailing me at: