How to hire for cultural fit

by 22 Mar 2005

Cultural fit is a relatively new buzzword in recruitment. Bruce Watt examines why cultural fit is important and looks at how hiring managers can put it into practice

We’ve all been there. After an extensive and thorough search for a line manager, one candidate stands out. They have the right experience, solid qualifications, a relevant work history and have performed impressively during the interview process. They said the right things, put forward some great ideas and generally presented very well. You hire them.

Three months later, you begin to question your decision. Your new hire’s team appears disgruntled, morale is low and output and productivity is well behind the previous quarter’s figures.

After further investigation and speaking with a few key team members you realise there’s a disconnect – a mismatch. While impressive on paper and during the one-on-one interviewing stage, their style, approach and behaviour on the job are simply inconsistent with the values and expectations of your organisation. Their modus operandi is foreign to their colleagues. Your new hire is not a good cultural fit.

This scenario is not unusual. In fact, most hiring managers have probably experienced it at some point in their career. And even though they promise not to make the mistake again, they persist with practices that don’t support sound objective judgments about culture fit.

Most HR professionals recognise the importance of cultural fit. A recent DDI Australia survey of 223 hiring managers found that 90 per cent believe that recruiting for culture fit is important. However, only 36 per cent always assess for culture fit.

To better appreciate the role of culture fit in the selection process, it is useful to first explore the broader concept of fit and the reasons why culture fit is particularly important in today’s business environment. Fit is typically defined in two distinct ways: job fit and organisation fit.

Job fit refers to the degree to which the candidate’s skills and experience are relevant to the job and the degree to which the candidate finds the role’s activities and responsibilities satisfying. Organisational fit refers to the candidate’s compatibility with the organisation’s values and mode of operation. While organisation fit covers a range of organisational attributes the most common and frequently cited element centres on the congruence between individual and organisational values. This is often referred to as culture fit.

Traditionally, organisations have focused on identifying people based on their skills and experience. If you can find someone who has the right set of skills and has done a similar job, it makes sense that there is a good chance they will be able to perform effectively in a new role.

However, while skills and experience continue to be important, research and practice increasingly point to organisational fit and particularly culture fit as a key differentiator in the selection process. Research shows that individuals selected on the basis of culture fit will contribute faster, perform better and stay longer.

So why has culture fit become so important in today’s business environment? A lot has changed in the workplace over the past 10 years. In today’s workplace knowledge, intellectual capital, individual and organisational qualities represent the competitive value proposition for most companies.

While an individual’s knowledge and skills may appear to be more important on the surface, the reality is that current knowledge and skill sets quickly become redundant. This is why culture is so important. While cultural change is not uncommon, most organisational cultures are enduring and therefore provide an anchor for individuals and organisations.

Provided someone fits into the organisation, and demonstrates the propensity to grow and develop, their knowledge and skills will change and grow over time. Values and motivations on the other hand are almost impossible to change. They are hard wired. To put it simply, cultural fit cannot be developed.

If most hiring managers and organisations recognise the importance of culture fit, why do so many not regularly and rigorously assess for culture fit?

The DDI survey found that externally, the war for talent continues to intensify and the supply of good quality candidates remains tight. It is an employee’s market, and if the current business environment is anything to go by, it will continue to be so for a long time especially at the manager end of the market –where it most counts. The tight labour market often leads hiring managers to make decisions quickly and choose individuals who may not be right.

The research found that around 50 per cent of hiring managers believe that tight labour markets force hiring managers to ignore culture fit during the recruitment process. Alarmingly, more than 50 per cent would rather hire someone who is not quite right, rather than go back to the start of the recruitment process. Internally, hiring managers cited time pressures and lack of available tools, skills and resources as the top reasons for not properly assessing cultural fit.

How to hire for cultural fit

Assessing for cultural fit is not as difficult as many would think. It requires establishing strong processes and tools that are understood and effectively practised by all hiring managers. As with many HR initiatives, the first step is to secure executive support and buy-in. This starts with demonstrating a sound return on investment as well as highlighting the cost of getting the decision wrong.

Consider the following facts:

1. Assessing for cultural fit helps increase employee satisfaction, which leads to better performance and productivity and a longer tenure.

2. Forty-five per cent of hiring managers in the DDI survey attributed poor recruitment decisions to cultural issues.

3. Getting it right the first time ensures business continuity.

4. Getting it right the first time also avoids the considerable costs associated with recruitment.

5. Poor hires impact negatively on staff morale, performance and productivity.

6. Poor hires at the C level may result in less than favourable media attention.

7. In an organisation with 5,000 employees, the yearly turnover costs approximate to more than $2 million.

The next step is to put in place sound, rigorous and efficient processes that support the assessment of culture fit. This is where the HR function plays a critical role. They must not only deploy the systems and tools but also ensure that hiring managers are skilled up in both the use of the tools and interpretation of results. DDI research has found that most hiring manager’s rely on gut feel when making decisions about culture fit.

While a number of methods like behavioural interview questions (specifically targeting values), panel interviews and reference checking are commonly used to determine cultural fit, some organisations are also using quite novel approaches. Onsite visits, trial work periods and even pre-employment dinners are being used to assess someone’s suitability for the organisation’s culture. One method that is not widely used but acknowledged by HR professionals as an effective means of assessing culture fit is cultural (motivational fit) questionnaires.

With most cultural fit questionnaires the first step is to create a baseline for the organisation’s culture. Organisation experts, who know and understand the organisation in its current as well as future state, identify the different facets of the organisation’s culture.

Job candidates then complete a questionnaire to provide information about characteristics they would find appealing or unappealing in an ideal organisation. Finally, the individual’s rankings are compared with the organisation profiles to identify areas of alignment and potential mismatch. This information is often carried forward to first or second interviews.

Hiring for cultural fit: the business case

The case for recruiting for cultural fit is a strong one. Whether you need to simply refresh your existing systems or undertake a complete overhaul, there are some practical solutions and tips to get you started.

Start by clearly articulating your employee value proposition and communicating this to the market. In essence why would top talent want to work in your organisation? What does your organisation offer that no other can? Some companies are using innovative ways such as posting realistic job previews or ‘day in the life’ snapshots on their websites. Candidates have the opportunity to preview and sample – albeit from an observer’s position –the way in which the company goes about doing business with its people. Self-selection is arguably the first step in recruiting for cultural fit.

Having attracted the right people, review current selection processes and ways in which you screen for job and organisational fit. One of the quickest and easiest ways to do this is to directly link culture fit elements to a competency model. Most competency models include constructs that are similar to those that make up culture fit, such as customer focus and teamwork. Behavioural interview questions and simulations can then be used to support objective assessments.

Also, conduct an internal skills audit of hiring managers and ascertain whether they are comfortable with hiring techniques and are they able to clearly articulate organisational values and the company culture to candidates. Determine development needs for hiring managers and put in place targeted training.

Lastly, if you regularly use recruitment consultants as part of your selection process, ensure they too understand the unique attributes of your organisation and the processes used to assess candidates.

At a time when many are still reeling from the indiscretions of companies such as One.Tel, and HIH, the importance of culture and values has never been greater. Despite widespread recognition of the importance of values and culture, many companies that do not assess for fit or otherwise employ methods that may not deliver the best outcome.

Potentially, culture is being threatened by hiring processes. What is encouraging though is the recognition that the issue of culture fit is an important one. Armed with a clear case highlighting business need and return on investment, this is a sound opportunity for the HR function to input strategically to the business.

Bruce Watt, (02) 9466 0300, is managing director, DDI Australia.