Five Biggest Mis-Hiring Mistakes

By Dana Borowka, MA

Ready. Aim. Mis-hire.

Unfortunately, that is a common problem for many companies. That mis-hire can have a big negative impact on your company’s bottom line. Worse, it could hurt work force morale.

Each mis-hire decision can cost your company well over two to three times the individual’s salary, according to author Barry Deutsch of Impact Hiring Solutions. This figure may be a conservative estimate because of factors like training, evaluation, termination, re-initiating the hiring process, and lost opportunity costs.

There is also an emotional factor involved in a mis-hire. Not only can it cause stress and anxiety for both management and employees, but it also takes away focus from your company’s primary goals.

According to research by Deutsch, co-author of the best-selling book You’re Not The Person I Hired, here are the five biggest mis-hiring mistakes to avoid:

Mis-Hiring Mistake #1. Not taking the time to define success. Not defining success up front is almost a guarantee of a mis-hire. Defining success is the number one issue behind problems with hiring, performance management, and engagement. Defining success up front dictates where you go to find the candidate, it provides 80 percent of your interview questions, and it lays out performance expectations that you can use in interviewing.

Mis-Hiring Mistake #2. No formal hiring process. If there is one key to overcoming most of the mis-hiring mistakes that managers make, it is by developing a rigorous and disciplined hiring process. This kind of process has two major components: a detailed step-by-step process, and written forms and questions prepared in advance. Although each hiring experience may have its unique aspects, most follow a consistent process. Best-practice information on hiring found in many books and websites can form the basis of your step-by-step process. But once you settle on a process after trial-and-error, it needs to be written down in the form of a checklist or procedure so that each hire follows a complete course of action.

Mis-Hiring Mistake #3. Not shaking the bushes hard enough to uncover the best candidates. Most companies post generic job descriptions on generic job boards and pray the best person drops into their lap. Sometimes, you might do a little superficial networking. The tactic of posting the job usually brings the bottom third of the candidate pool to your doorstep – all the worse candidates. Sometimes you get lucky. There is an old adage that goes: “Even a blind squirrel can find a nut sometimes.” It’s tough to build high performing teams based on luck and hope. Running generic ads on generic job boards shows up a small microcosm of the candidate pool – those who are unemployed, or desperate to leave their current organization. If you want to fill your funnel with outstanding talent, you have to work at compelling the best to come forward by writing compelling marketing statements to replace the disgusting use of job descriptions, networking, referrals, and direct sourcing using tools like LinkedIn.

Mis-Hiring Mistake #4. Ignoring character and values. Have you heard the expression, “People are usually hired for experience and fired for character.” With today’s emphasis on resume screening and superficial interviews, about the only information a hiring supervisor can glean from a candidate are the facts of past experience and skills. Talent, skills and experience are important, but after the hiring is done, real people show up with their own values, morals, and motivations.

Mis-Hiring Mistake #5. Failing to use in-depth work style and personality assessment. You must have an interview process designed to validate, verify, and vet whether the candidate can achieve your desired results, and whether they will be a good fit for your culture and values. That includes assessments. As with any business decision, having the right information is critical. Work style and personality assessment testing can provide insight into potential hires, as well as your current workforce, in three main ways:

1. Identify potential red flags. A personality assessment can discover issues that are sometimes overlooked during the interviewing process and can quantify an intuition or feeling the interviewer may have about a particular candidate. It can be used to identify potential red flags concerning behavioral issues, help understand how to manage individuals for greater work performance and compare interpersonal dynamics of teams, departments and candidates.

2. Learn how to optimize employees’ work performance. A personality assessment can provide extensive information on an individual’s ability to work with their job responsibilities, team dynamics and company culture. Additionally, the assessment can show effective strategies to gain optimal performance from that individual within their particular work environment. It can also be employed to quickly identify the most effective management style for a new employee or predict how team members are likely to interact.

3. Ensure you have the right people in the right positions: Additionally, personality assessments can be utilized in rehires, or situations which call for employees to re-apply for their current jobs, as in the case of a corporate merger or restructuring. A personality assessment can also ensure that your company continues to have the right people in the right positions and distribute assets and talents effectively.

Legal Guidelines For Assessing Recruits

A frequent question from companies and organizations concerns the legal guidelines in administering assessments to potential employees. Industry regulations can vary and the best option is to consult with your company’s trade association along with reading through the EEOC guidelines by visiting Additional information can be found online at the EEOC website, in the Disability-Related Inquiries and Medical Examinations of Employees section: http://www.eeoc.gov/policy/docs/guidance-inquiries.html#2. The EEOC is the end all of end-alls. So, no matter what people say, always go by what the EEOC has outlined.

As a general rule if your company uses an assessment, any test or set of hiring questions must be administered to all of the final candidates in order to assure that discrimination is not present.

The Bottom Line

An in-depth work style and personality assessment is only one component needed for a successful recruitment and hiring program. It can provide valuable information for critical personnel decisions. Combined with an effective recruitment program and skilled interview techniques, it can benefit your company as a whole, in addition to your individual employees. Armed with accurate and quantifiable data from an in-depth personality assessment, the interview process becomes much more reliable. Ultimately, this only adds to your organization’s bottom line, allowing more effective management of your existing workforce and limiting the potential for wrong hiring decisions.

For more information, please visit our website, www.lighthouseconsulting.com to sign up for our Open Line webinars and monthly Keeping On Track publication.

If you are open to a conversation about how our in-depth work style and personality assessment could help your team, including pricing and the science behind the tests, please contact us at 310-453-6556, extension 403.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, Santa Monica, CA, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2021

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your business”. They do this through the use of in-depth work style & personality assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication, stress & time management, sales & customer service training and negotiation skills as well as our full-service Business Consulting Division. Dana has over 30 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics.  He is the co-author of the books, “Cracking the Personality Code”, “Cracking the Business Code” and “Cracking the High-Performance Team Code”. To order the books, please visit www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style & personality assessments for new hires & staff development. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication, stress & time management, sales & customer service training and negotiation skills as well as our full-service Business Consulting Division.

Hire Right The First Time, Part 2

By Dana Borowka, MA

Is your company still hiring employees using the same process it did five years ago? Think carefully about the question for a moment. Is the company recruiting, screening, interviewing, and verifying using the same techniques and procedures as in the past?

Next question. Do you wonder why so many of your new hires don’t remain in their jobs over six months, or why other companies seem to attract and keep solid employees, but not your company?

It is time for every company to re-examine their hiring practices, or risk falling behind in the race to win great talent.

In Part One (see Hire Right the First Time (https://lighthouseconsulting.com/hire-right-first-time/) . . . I explored the new rules of recruitment and the necessity of in-depth work style and personality assessments.

In this, Part Two, I look at interviewing, background checks, and skills testing. Combined, these practices must form the pillars of a modern-day hiring procedure for companies and organizations of all sizes.

1. Recruitment
2. Interviewing
3. Background Checks
4. In-depth Assessments of Skills and Work Style

Why Change the Hiring Procedure?

In Part One I opened by stating that a wrong hiring decision costs a company 2-3 times the employee’s annual salary. That hurts no matter if it’s an entry-level position or a top executive. Cost is reason enough to change how talent is recruited and hired. But, there’s even more justification for change.

The success of the entire organization is at stake. A company is only as good as the combined ability of its employees to meet customer expectations and outperform the competition. Good employees matter, but therein lies the problem.

Good employees are rare today no matter the industry. (For simplicity sake let’s define “good” as those people with the right skills and right work style personality to perform their given duties with excellence over time). The demand for good employees is higher than ever. The supply is lower than ever. A company has to work differently today to find prospective employees and then identify the “good” ones – those that have the right work style personality and skills to do the job well within the company’s culture.

A Recruiter’s Advice

One area for improvement is how we find and recruit prospective employees. I mentioned in Part One some considerations for a modern-day recruitment effort. To this I’ll add a note about using an executive search firm. Companies frequently make two mistakes in this area. According to Barry Deutsch, Founder of Impact Hiring Solutions (http://www.impacthiringsolutions.com/) and co-author of “You’re Not the Person I Hired”, companies too often use search firms before they must, and they tend to hire a recruiter based only on industry focus.

“Working your network to seek referrals is the absolute first place a company should look when attempting to find candidates for a key role in the company,” Deutsch advises. “Only after shaking the trees should you consider investing in an executive search firm.”

Once a decision is made to use a recruiter, avoid the temptation to think that only those with prior experience in your field can be successful. As Deutsch explains, “Just because a recruiter spent years as an electrical engineering manager, doesn’t mean they’ll be able to bring you the best engineering candidates.” Having a network within a specialty or industry is helpful, but just knowing who to call isn’t the biggest value a recruiter brings to the table. “Effective recruiters earn their fees by being adept at convincing people who already have a good job to consider leaving it for another better opportunity,” Deutsch said. “Ninety percent of managerial and executive positions are filled by people who were already employed and not actively thinking about making a switch.”

Learn the Right Way to Interview

The interview process in most companies is woefully ineffective, according to Deutsch, and is largely to blame for poor hiring decisions. “Companies aren’t investing enough time in preparing for the interview,” he said. He advises his clients to first set the right expectations for the job and make everyone involved in the interview aware of the job’s expectations. “This goes hand in hand with a detailed job description. What is the position expected to know and to accomplish, and by when?”

Once the expectations are documented, map a list of questions to those expectations. “Stop asking the standard, stupid 20 questions. Get strategic with your questions so you receive pointed, meaningful answers,” Deutsch advises. “If you do this important step, you will move closer to hiring the best candidate not the candidate who interviews best.”

Validate Resume and Interview Answers

The next steps in the hiring process will be new to many companies, but a mandatory addition if the organization hopes to achieve a higher level of hiring success. The steps involve Background Checks, Skill Testing, and In-Depth Work Style and Personality Testing.

An article in Inc. Magazine quoted a HireRight 2017 employment screening benchmark report that claimed 85% of employers caught applicants fibbing on their resumes. According to Gordon Basichis, Co-Founder of Corra Group (http://www.corragroup.com/), criminal record and education deception are the most common “surprises” uncovered by Background Checks. The potential hidden liability for the employer is obvious.

Basichis explains that the most common mistake by employers is not going far enough with a background check simply because they are not aware of the types of background checks and in which cases they should be conducted.

1. Employment verification. A leading point of inconsistency.
2. Education verification. Another area of high discrepancy.
3. Social Security Trace. Traces where someone has lived the past seven years.
4. County Civil and Criminal Records. These tend to be the most accurate, but it’s important to know where the candidate has lived so all the counties can be searched.
5. Federal Criminal and Federal Civil Records. Typically, these checks are for employees involved with government contracts, financial positions, or high-level executives.
6. Terror Watch List.

Basichis urges companies to follow the advice of an HR specialist and employment attorney when setting policies for background checks. There are numerous regulations and guidelines at the Federal, State and City levels which must be followed regarding how Background Checks can be conducted and used in the hiring process.

Okay, the candidate aced the well-prepared interview questions, passed the background check with flying colors. Do you extend an offer? Not so fast.

Verifying Skills

The candidate may have said all the right things, but do they really have the skills required for the job? Testing is the only way to verify if the person can do the job as expected. Fortunately, online skills tests exist for hundreds of common jobs from Accounting to Manufacturing to Software Programming.

There simply isn’t an excuse today for hiring someone ill-suited for a job. Candidates can be given a 15-30 minute online skills test in your office and the results are known immediately.

Last year Lighthouse Consulting began offering its clients a catalog of some 200 Skills Tests (https://lighthouseconsulting.com/talent-development/skills-testing/) in 16 job categories. These pay-on-demand tests cost $22.50 to $100 – a drop in the bucket compared to the cost of training or re-hiring.

Identifying the Work Style Personality

Great, the skills test was successful, the background checked out, and the interview questions were answered to your satisfaction. NOW can you make the offer? Better not. You may know a lot about this candidate, but you don’t know how they work, or how they work with others. That’s where in-depth workstyle and personality assessments (https://lighthouseconsulting.com/assessment-tests/) play an invaluable role in hiring, promoting and team formation.

I went into detail about in-depth work style and personality assessments in Part One (https://lighthouseconsulting.com/hire-right-first-time/) of this article, so I’ll recap the key point here. If you aren’t conducting this type of assessment, start doing so immediately. If you are using a tool with only four primary scales (5-10 minute assessment) it might work as a very basic screener but is too superficial to reveal insightful behavioral information about the candidate. In fact, some companies have learned to not even bother with these simplistic profiles. They prefer to give final candidates an in-depth assessment (minimum 164 questions).

As a manager you know all too well the importance of knowing an employee’s work style and how they will interact (or not) with others. Only in-depth assessments based on 16 levels (we call them “scales”) gives you a true picture of the individual on which a hiring decision can be based.

The Pillars of Hiring Success

In conclusion, the structure for achieving hiring success at 80% or better consists of four pillars.

1. Recruitment
2. Interviewing
3. Background Checks
4. Work Style Personality and Skill Assessments

LCS and our partners stand ready to quickly help you put into place the training, tools, and procedures necessary to build a highly effective and competitive organization through better hiring. Reach out to me any time to get started. danab@lighthouseconsulting.com.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2021

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your business”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication and stress management. Dana has over 25 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics. He is the co-author of the books, “Cracking the Personality Code”, “Cracking the Business Code” and “Cracking the High-Performance Team Code”. To order the books, please visit www.lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, Santa Monica, CA, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Our Sino-Am Leadership Program helps executives excel when stationed outside their home country. American managers in Asia and Asian managers in America face considerable business, personal, and leadership challenges because of the cultural differences. This unique program provides personal, one-on-one coaching. For more information visit, https://lighthouseconsulting.com/performance-management/talent-development/sino-american-management-style/.

We also have an affiliate in the UK who covers all of Europe so we are now a true multi-national company that can support our clients globally.

Hire Right The First Time: Are You Tired of Not Knowing Who You are Hiring?

By Dana Borowka, MA

In this day and age, making the wrong hiring decision can cost a minimum of 2-3 times the annual salary! That’s a high price to pay, and it’s a conservative figure when you factor in the emotional pressures of training, evaluation, termination and then starting the hiring process all over again.  By refining your hiring process, you can turn hiring into a profitable and successful venture.

Creating An Effective Recruitment Program

There are several steps to creating an effective recruitment program. The first starts with the basics – the job description. Many companies don’t even have job descriptions for their bizmen on moneypositions and that’s one of many hiring pitfalls. It’s very difficult to describe a position to a candidate, without having it completely defined. The next problem with job descriptions is that they are usually not definitive enough. It’s important to detail the expected job performance outcome, and be very specific in what is needed and expected. The job description should have 30-, 60-, 90- and 180-day objectives, so the candidate has a clear understanding what is expected for the job. Be sure to review and update job descriptions regularly, as company needs and expectations for a position are bound to change.

The next step is to define where to recruit candidates or target your recruiting process. Now that you have an idea of what you need and expect for the position, where do you find this treasured person? There are many resources: Referrals, recruiters, ads, college placement centers, .com listings, etc. Of course, referrals are usually one of the best sources for candidates and giving out the job description to business associates and friends may reveal the perfect candidate. When working with recruiters, it is very important to be as specific as possible to avoid your time being wasted with unqualified candidates.

According to Arnie Winkler of the Northwest Public Power Association, “Organizations must be specific in understanding what they want in technical competency, cultural fit and behavioral characteristics.” The same is true for ads so that the ad is as definitive as possible. College placement centers are not only good for recruiting college grads, but usually have facilities to list positions that require extensive experience too. They can be especially helpful if they are in close contact with the alumni association.

In today’s environment, we all need to do more than just post an ad. An example of this would be if you post something with a university. The next step would be to reach out to the dean of the department and any clubs or fraternities or sororities on campus. The schools want to help their students get placed so you just need to reach out and ask and then follow-up… follow-up and follow-up again. This is the nature of our environment today. Everyone needs to think outside of the box as to where to find the candidates then be very proactive to find the just right person that you are looking for. Also, never wait until the need arises – you need to have a pro-active recruiting program year round. If you haven’t read the book,“You’re Not The Person I Hired”, please get a copy. It’s the bible of hiring and is filled with ideas that will help for the full recruiting cycle.

Resumes & Interviews

Soon in your hiring process, you will be faced with a big pile of resumes. Look for resumes that are specific to your needs and notice the presentation style, which will tell you athe interview great deal about the candidate. It is helpful to decide what the priorities are for the position and look for those first in the resumes. Once you have settled on a few resumes, we suggest the two step approach to interviewing. The first is the telephone interview, which can save you valuable time and effort. Ask the candidate a set of specific questions, such as: Why are you interested in this position? Please describe three key attributes that you have to offer to our company? Give me one significant program that you had an impact on in the last six months? Listen carefully to the candidate to see if the response fits the job description. This process allows the candidate to earn a face-to-face interview.

When interviewing in person, it is important to listen and not let emotions take over. The candidate should talk about 80 percent of the interview and the interviewer only 20 percent. The goal for interviewing effectively is to note their thinking patterns, and not get caught up in appearances, impressive schools or companies. During the interview, questions that are more specific are helpful in making successful hiring decisions. Some examples are: What significant impact have they had at three or more companies on their resumes – ask for specifics, percentage of change; Please describe in detail what brought about the change; What was their process, from A to Z? and ask how the candidate would handle a specific problem that you have seen in the position.

Reference Checking & Work Style Assessment

Once a candidate has been selected to be hired, then the most difficult part of the hiring process begins – reference checking. Most firms find professional organizations helpful when making background checks. We highly recommend doing a very thorough check including verifying education, job history, criminal (local, state and federal) and credit if it applies. Background and reference checks should be a part of your hiring process.

Yet, as the old saying goes, “You never know someone until you work with them, travel with them or live with them”. Through in-depth work style and personality assessments, you can reduce the possibility of making a hiring error if the appropriate assessment is selected.

When researching profiles, here are some things to keep in mind:

  1. Training or degrees of those who are providing the debrief/interpretation of the data.
  2. A copy of the resume and job description should be supplied to the testing company.
  3. Number of actual scales (minimum of 12)
  4. Scale for “Impression Management” (minimum of 164 questions in the questionnaire)
  5. What is the history of the profile?
  6. Does the profile meet U.S. government employment standards? Has it been reviewed for ADA compliance & gender, culture & racial bias?
  7. Does the data provide an understanding on how an individual is wired?

These are some general questions and if a profile falls short in any one area, we strongly suggest additional research into the accuracy of the data being generated.

Legal Guidelines

A common inquiry from companies and organizations is about the legal guidelines in providing assessments to candidates. Since industries vary, it is always best to check with a trade association or a legal representative. The general rule is that a test or any set of hiring questions needs to be administered to all final candidates in order to assure that discrimination is not taking place. More information may be found at the EEOC website, in the Disability-Related Inquiries and Medical Examinations of Employees section:
http://www.eeoc.gov/policy/docs/guidance-inquiries.html#2

Another question is how do new hires usually feel about taking an in-depth, work style assessments. It shows that a company is serious about who they hire. If the company presents the testing program as a method of assuring both parties that they are making the right decision, the individual usually responds very well. The bottom line is that hopefully turnover is greatly reduced.

Benefits of Assessments

In-depth assessments can be very helpful for personnel development and succession planning. As a hiring tool, they can be used to develop additional questions for interviewing and confirming the interviewer’s intuition that might be overlooked. This process gains more reliable and accurate data in order to effectively manage individuals to make hiring and personnel decisions a win-win for everyone.

If you are a hiring manager and would like to see a sample of an in-depth assessment, please give us a call or email us. For more information, please contact Dana Borowka at Lighthouse Consulting Services, LLC, (310) 453-6556, extension 403 or email dana@lighthouseconsulting.com.

As you have seen, a successful hiring program requires many components that work together to provide the needed information for difficult personnel decisions. Combining a well-defined job description, targeted recruiting and focused interviewing with an effective personality evaluation program, turns hiring into a profitable and rewarding process.

Permission is needed from Lighthouse Consulting Services to reproduce any portion provided in this article. © 2020

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your business”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication and stress management. Dana has over 25 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics. He is the co-author of the books, “Cracking the Personality Code”, “Cracking the Business Code” and “Cracking the High-Performance Team Code”. To order the books, please visit www.lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, Santa Monica, CA, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Our Sino-Am Leadership Program helps executives excel when stationed outside their home country. American managers in Asia and Asian managers in America face considerable business, personal, and leadership challenges because of the cultural differences. This unique program provides personal, one-on-one coaching. For more information visit, https://lighthouseconsulting.com/performance-management/talent-development/sino-american-management-style/.

We also have an affiliate in the UK who covers all of Europe so we are now a true multi-national company that can support our clients globally.

Is it Safe to Hire 1099 Contractors Anymore?

By Lauraine Bifulco of Vantaggio HR

Independent contractors or employees? It’s not a new question. We’ve all been grappling with it for years, but why does the issue keep circling back around, and dare I say, keep getting more complicated? How do we avoid a legal minefield?

People are divided on the subject. “Yes, I’m positive my design consultant is an independent contractor.” “No, that office manager of yours really needs to be on payroll as an employee.” We can’t seem to agree. Why is that?

Well, it’s not that as intelligent business people, we can’t apply a set of rules to a situation and determine the right answer. If there were a standard, we’d all probably be able to figure it out and agree. But that’s the problem, there simply isn’t one, easy set of rules – until maybe now, with the increasing use across the country of ABC tests to make the determination. Hawaii, for example, has long used the ABC test for determining employee status ‐ as do 16 other states. And now California has jumped on the bandwagon after their state supreme court decided earlier this year that they could not be outdone by Massachusetts who had been known for having the most stringent test in the country! And while these ABC tests aren’t necessarily good news for employers, they are at least typically more clear than the tests used in other jurisdictions and by other agencies.

Let’s go back and see how we got here. As a reminder, it’s unfortunately not up to the worker and the hiring company to determine the best model for working together. There is a common misconception that you can just “1099” the worker and be safe treating him/her as an independent contractor. While filing a 1099 to report income paid to the person can help reduce your penalties with the IRS should it be determined that the person was misclassified, the act of submitting a 1099 does not in and of itself establish independent contractor status. Almost everyone has heard of the IRS’s 20 factor test, which was boiled down in 2007 to an 11‐factor test focusing on 3 main areas. The IRS examines the behavioral and financial arrangement between the worker and the hiring company as well as the nature of their relationship. This type of test, called a “common law test” walks you through a series of questions helping to identify if the worker in practice is functioning independently or not. Unfortunately, oftentimes even after applying the multiple questions, the answer is a little murky and could honestly swing either way.

Other agencies, like the federal DOL, use a different methodology called the “economic realities test.” Like the common law test, there are a series of questions that one poses about the worker and the hiring entity aimed at determining if the worker is truly independent from an economic perspective from the hiring entity. Is this person truly, from a financial perspective operating an independent business?

The challenge with both the common law test and the economic realities test, is that there is no true “pass/fail.” For example, with the IRS’s 11 factor test, you are not guaranteed independent status if you answer 6 out of the 11 questions correctly. The different factors are given varying weights depending upon the exact terms and conditions of a particular worker’s relationship with the hiring company. And unfortunately, clarity is sometimes not reached until years after the relationship is established when there is a complaint or lawsuit and then a final ruling. Employers have been left guessing and hoping that their independent contractors are classified correctly.

Until now. ABC tests utilize a streamlined, 3‐prong approach whereby the hiring entity has to establish that all 3 of the factors of the test are met. If either A, B, or C cannot be established, the analysis is over – your worker is an employee and not an independent contractor.

Here’s how ABC tests typically work:

A worker is legally presumed to be an employee, unless:

A. The worker is free from the control and direction of the hiring company in connection with the performance of the work;

AND

B. The worker performs work that is outside the usual course of the hiring entity’s business (AND/OR outside of the hiring entity’s regular place of business);

AND

C. The worker is customarily engaged in an independently established trade, occupation, or business.

While factors A (the worker needs to be free from control of the hiring company) and C (the worker needs to truly be engaged in running his/her own business) have been part and parcel of just about all the other types of tests used, factor B is frequently the most difficult hurdle to overcome for an employer wanting to treat someone as an independent contractor. Note the “AND/OR” in the description above. Some jurisdictions allow for the “OR” (such as Hawaii), meaning that if you manufacture and sell surfboards, you can still hire someone as an independent contractor if he/she meets prongs A and C, as long as the worker manufactures those surfboards for you at his/her own business location. Some jurisdictions don’t give you that option. Now in CA for example, there is no “AND/OR” – if the person makes surfboards for you, no matter where the work is done, you fail prong B of the test. Period. Game over. Unless the worker is being utilized to provide some type of service that is not the hiring company’s core business, the person will be considered an employee.

Keep in mind that while these ABC tests are becoming more and more common, many agencies may still continue to use their existing criteria. And to make matters even more complicated for us employers, within a specific state, different agencies use different tests. How a worker is classified by state labor commissioner for purposes of overtime, minimum wage, and other employment law protections may well differ from how a determination would be made regarding eligibility for unemployment benefits or coverage by workers’ compensation. Does this make your head hurt yet? It does mine.

This is an area to keep your eye on. It is entirely possible that other agencies will also adopt the ABC standard. Recently, Senator Bernie Sanders introduced a bill that would incorporate California’s new version of the ABC test into the federal rules for determining independent contractor status under the National Labor Relations Act (NLRA). We are clearly experiencing a trend.

But for now, we are left with different tests being used by different agencies and the challenge it’s not possible to treat someone as an independent contractor for some purposes while an employee for others. When deciding if someone is going to be on payroll or not, we have no choice but to apply the most stringent test that could come into play. And for many of us, it’s the ABC test.

Understanding the thought process behind these rules is helpful. The basic premise it to not have workers deprived of benefits to which they would be entitled if classified as employees. Further, if we allow some companies to save money by avoiding payroll taxes, workers’ compensation, and other mandated benefits and protections, we set the scene for unfair competition in the marketplace.

What is at odds with this trend towards restricting the legal classification of independent contractors, is the evolving “gig” economy. More and more individuals are getting involved with companies such as Uber, Lyft, Grub Hub, and a host of other online, on‐demand service entities that allow people to pretty much decide how much they want to work and when. If these ABC tests are increasingly going to be applied, gig companies are going to have a very hard time continuing to employ workers as independent contractors. And the lawsuits are rolling in. The CA Supreme court ruling made an interesting point. They acknowledged that there is often greater freedom for workers to be treated as independent contractors but stated that “if a business concludes that it improves the morale and/or productivity of a category of workers to afford them the freedom to set their own hours or to accept or decline a particular assignment, the business may do so while still treating the workers as employees for purposes of the wage order.” Point well taken by all of us inside or outside of California.

So where does this leave us? As the landscape continues to evolve, we urge employers to proceed conservatively. Know the exact nuances of the tests in your jurisdictions, get professional help if needed to make a sound determination, audit yourself before someone else does, and keep your eyes open for changes. The gig economy isn’t going away anytime soon, but neither are the ABC tests.

The information presented in this article is intended to be accurate and authoritative information on the subject matter at the time submitted for publication. It is distributed with the understanding that Vantaggio HR is not rendering legal advice and assumes no liability whatsoever in connection with its use. Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article.
Copyright © 2020

Lauraine Bifulco is President and Principal Consultant of Vantaggio HR, a human resource outsourcing and consulting firm that works with companies of all sizes across all industries, offering services on a fully outsourced or project basis: On-Site HR * Payroll Admin * Workplace Complaints & Terminations * Multi-State Audits & Handbooks. 1-877-VHR-relx (1-877-847-7359) info@VantaggioHR.com

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, Santa Monica, CA, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication and stress management.

To order the books, “Cracking the Personality Code”, “Cracking the Business Code” and “Cracking the High-Performance Team Code”, please go to www.lighthouseconsulting.com.

Our Sino-Am Leadership Program helps executives excel when stationed outside their home country. American managers in Asia and Asian managers in America face considerable business, personal, and leadership challenges because of the cultural differences. This unique program provides personal, one-on-one coaching. For more information visit, https://lighthouseconsulting.com/performance-management/talent-development/sino-american-management-style/.

We also have an affiliate in the UK who covers all of Europe so we are now a true multi-national company that can support our clients globally.

How to Conduct Remote Job Interviews

By Dana Borowka, MA

Many companies struggle to find the right candidates for their organization. Having a small radius to find the right talent can add to these challenges.

The solution is to open up the geographic area for recruiting because that opens up a whole new talent pool. Now your company can target specific areas in the country where more candidates with certain talents may be found.

However, there is a concern. Remote worker programs mean hiring managers need to get better at remote interviewing through video.

During the COVID crisis with the stay-at-home order, remote interviewing has become a requirement, not a luxury.

“Remote worker programs must be done right if you are to garner productivity gains,” says Patty Crabtree, a senior consultant at Lighthouse Consulting Services with 25 years of operations and finance leadership experience.

“As someone who has implemented these programs and now helps clients transition to these programs, how you interview remote job candidates is an important new recruiting skill,” says Crabtree.

Author and recruiting expert Barry Deutsch has strong views on remote interviewing.

“Most companies do a terrible job preparing managers and executives to hire effectively, including remotely interviewing candidates,“ says Deutsch, a partner at IMPACT Hiring Solutions and co-author of the book You’re Not The Person I Hired.

“In most companies, hiring is not a process, it’s a random set of arbitrary meetings where each individual manager does interviewing in their own misguided way,” says Deutsch. “The minute you turn hiring into a process, train all your managers, and put some rigor behind it, then hiring accuracy starts becoming more reliable.”

Crabtree concurs.

“Once you have a system set up, you can interview anyone through Zoom or similar solutions regardless of their location,” says Crabtree. “It comes down to your process and how you assess candidates.”

Here are tips from Deutsch and Crabtree on how to maximize the effectiveness of your remote job interviews:

Take Advantage of Video

Zoom, Skype and Go-to-Meeting, just to name a few, have been a boon to remote job interviews. Seeing the candidate is so much better than just interviewing them by phone. But beware. Sometimes the technology goes awry. One company we help had a bad interview session with a candidate because the technology was not working right. They were just going to throw out that candidate. That is a huge mistake. With our assistance, they re-interviewed the candidate when the technology was more cooperative.

“Know how stressful or intimidating panel interviews can be,” says Crabtree. “Make it fun and interactive. The attitude should be: ‘Let’s have a conversation and get to know each other. Let’s see how this dynamic will work and if you have the skills to do the job successfully.’”

Deutsch says the most difficult part of interviewing through video is that the process of conducting testing where you ask them to do something to validate the skill they are claiming, such as welding, electronic soldering, physical use of hands in a manufacturing, construction, or assembly role.

“This is now missing unless you bring them in a for a final test before hiring,” says Deutsch. “For all other roles, especially at the professional and managerial level, written tests, role plays, case studies, and situational examples are still important to validate, verify, and vet the candidate responses.”

For some of the knowledge or experience-based testing, there are online educational applications that can be used to proctor these tools.

Prepare Your Interview Questions

“I actually like video and audio interviewing compared to face-to-face interviewing because it tends to remove the bias and emotions most managers use in interviewing that lead to mistakes and errors,” says Deutsch.

When asking questions, focus on understanding their past experience about working from home as it is a different experience, advises Crabtree.

“Delve into self-motivation, organization, time management and development of work relationships,” says Crabtree. “Similar questions you would normally ask but looking to connect their skills and behaviors with the uniqueness of a work at home experience.”

Make sure they can keep themselves on track in a work at home environment along with making sure they could build relationships with their colleagues. There are many introverts in the world that struggle with the relationship piece. While that doesn’t mean you wouldn’t hire them, it gives the manager insight into the support that needs to be provided to help the individual be successful.

Make Sure Your Process is in Order

“If you need workers, using remote interviewing will help with the social distancing that is needed during this time,” says Crabtree. “You can successfully screen candidates remotely with the right process and tools and limit the in-person interaction.”

When she was a hiring manager, Crabtree remained flexible.
“Timing was no different whether someone was local or living in an out of area location,” says Crabtree. “We worked around schedules and determined the times that worked for everyone involved. Sometimes this was early in the morning, during lunch hours or into the evening. We stayed flexible because finding the right candidate was the most important driver of this process.”

Ask Deep and Penetrating Questions

“The top trait of success is initiative,” says Deutsch. “This is also characterized as proactivity or discretionary effort. Very few candidates consistently show that trait.”

According to Deutsch, the very best performers are constantly going above and beyond the call of duty, doing more than they were asked, anticipating, and always thinking one step ahead.

How do you measure this number one trait of success in the interview?

“A large part of hiring failure can be attributed to asking the traditional, standard, stupid, inane, canned interview questions,” says Deutsch. “If you want to determine if someone can achieve your desired goals, outcomes, deliverables, expectations, key performance indicators, and metrics, then you need a set of interview questions designed to extract that information to predict future performance and fit.”

Of course, don’t just rely on the interview. Also carefully check references.

Use an In-depth Work Style and Personality Assessment

Since you’re not meeting people face to face, the use of assessments becomes even more important.

“Never hire another candidate, especially a remote candidate, until you put them through an in-depth workstyle and personality assessment,” says Deutsch. He advises that it doesn’t matter the level of the position. You should test every final candidate.

“Anything less than five hours of effective interviewing is nothing more than closet psychology,” adds Deutsch. “You’re just guessing what’s behind the curtain.”

Yet, hiring for attitude, behavior, and cultural fit is just as important as measuring whether the candidate can perform to your expectations.

When Crabtree was a hiring manager, she had a solid multi-step process in place before she started hiring remote employees.

“After screening the resumes and a quick online assessment, there would be an initial phone call by the hiring manager,” said Crabtree. “If the basic qualifications were met, the candidate would then take an in-depth workstyle and personality assessment, which would help us understand that person’s workstyle and how they would fit into the team.”

Always Seek Top Talent

Remember, the objective of remote interviews is to find top talent.
Here is what Deutsch has to say about finding top talent: “Top talent is working; it’s rare that they’re unemployed so don’t pin your hopes on the resume database of a job board or rely on a recruiter that doesn’t have access to working candidates.”

The better you understand what makes top talent tick, the better chance you have of attracting them.

Deutsch went on to say: “Top talent is usually already well paid and working on amazing projects so don’t believe that paying more money is going to be enough to shake top talent from their current employers. Top candidates ultimately take new jobs because: the opportunity is terrific, they will be working for a boss they can respect, and the company is one they can respect and admire.”

Remember, remote interviews with candidates are a two-way street. Top talent candidates have many options. You want to assess if the candidate is right, and you want to persuade the candidate that yours is the right company for them. The hiring manager has an important job of communicating that during the remote interview.

Lighthouse can help guide your organization in designing and implementing a remote work force platform with the help of our practice specialist through our full service business consulting division For more information please contact Dana@lighthouseconsulting.com or call 310-453-6556 ext. 403.

A Final Thought: Supervising A Remote Work Force

We just did an outstanding webinar entitled, Supervising A Remote Work Force. You’ll find it to be very helpful and will want to share it with others!

Audio: https://lighthouseconsulting.com/openline/040720/OpenLine040720.mp3
Slides: https://lighthouseconsulting.com/openline/040720/OpenLine040720.pdf

Lighthouse can help guide your organization in designing and implementing a remote work force platform with the help of our practice specialist through our full service business consulting division. For more information please contact Dana@lighthouseconsulting.com or call 310-453-6556 ext. 403.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2020

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your business”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication and stress management. Dana has over 25 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics. He is the co-author of the books, “Cracking the Personality Code”, “Cracking the Business Code” and “Cracking the High-Performance Team Code”. To order the books, please visit www.lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, Santa Monica, CA, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication and stress management.

Time to Develop a Remote Workforce Strategy

By Patty Crabtree & Dana Borowka

Our work environment is evolving. Despite concerns about employee productivity, data on the American workforce indicates that the remote worker trend is picking up steam. Is it time for your business to embrace a remote workforce?

U.S. businesses are doing the math, and the math says the remote-worker option is a great opportunity for workers and employers.

Allowing employees to work from remote locations means a company can expand its talent pool from beyond its local geography. According to university/industry research viewed by Lighthouse Consulting Services, LLC, if the right person is selected his or her work production has the potential to increase by 30% to 300%. Obviously, hiring better workers that work remotely can result in increased productivity and client satisfaction.

For example, a Chinese travel agency saw productivity increase by 13%, and the US Patent & Trade Office (USPTO) reported that output increased by 4.4% when it transitioned to a remote worker program.

Sure, there are some who still are skeptical. In an August 2019 article in the Harvard Business Review (“Is it time to let employees work from anywhere?”), three professors raised the following concerns despite the remote worker movement growing in popularity:
In our experience…managers often worry about remote employees working less, or multitasking, mixing personal responsibilities with work. There are also concerns that allowing employees to work from anywhere could decrease communication and collaboration among coworkers and might constrain the informal learning that typically happens in the office.

However, the professors’ research demonstrated the advantages of a work from anywhere (WFA) program. “A key takeaway from our research is that if a work setting is ripe for remote work – that is, if the employee knows how to collaborate remotely and still do their job well – implementing WFA can benefit both the company and the employee.”

With effective productivity measurements in place, it does not matter if the employee is in front of you or not. Success comes down to ensuring effective communication, training and focusing on evolving your tools to support the remote workforce.

“Data indicates that the remote-work trend in the U.S. labor force is inexorable, aided by ever-better tools for getting work done anywhere,” according to Christopher Mims in The Wall Street Journal.

“Surveys done by Gallup indicate that in 2016, the proportion of Americans who did some or all of their work from home was 43%, up from 39% in 2012,” cites Mims in his June 2017 article titled “Why Remote Work Can’t Be Stopped.”

Points to Consider

Remote worker programs must be done right if you are to garner productivity gains and increase employee retention. As someone who has implemented these programs and now helps clients at Lighthouse Consulting transition to these programs, here are several points to consider:

Recruiting: Many companies struggle finding the right candidates for their organization. Having a small radius to find the right talent can add to these challenges. Opening up the geographic area for recruiting, creates a whole new talent pool. Recruit across the entire nation or target specific areas in the country where more candidates with certain talents may be found. Keep in mind, some states have tougher labor laws so research on the laws for each state is needed as you find candidates.

Interviewing: Interviewing can be done via video conferencing. If face to face is preferred, bring the final candidate to your office. It is important to have a strong hiring process that helps you identify candidates that fit the needs of the position and culture of your organization. This screening process is critical even if you are not hiring remote staff. Knowing your culture and how an employee will blend into the work environment is an important element of successful hiring.

Onboarding: A successful onboarding process ensures your new employee understands both the culture of the organization and their specific role. It is an opportunity to team build and to begin the process in developing strong working relationships with their new colleagues. Many companies will bring the remote candidate in for a period of time for the initial training and orientation. This gives the individual a chance to “get a feel” for the company’s dynamics in person along with making some face to face connections. Other companies will utilize video conferencing to manage the onboarding process along with activities to connect the new employee and other staff members. While learning their role and being productive are important out the gate, it is also essential to invest time in sharing your culture and building working relationships with colleagues. This helps the employee feel valued by the organization as they start in their new role.

Managing: Managers need training on how to successfully engage a remote workforce along with understanding the nuances of managing both office-based and remote staff in an equal way. It takes practice and discipline to ensure a manager is giving the same attention to remote staff as they would an individual that is 20 feet away from them. Policies such as “How often should the manager reach out to touch base?” “How do managers chair group meetings and engage remote workers in the conversation? “ and “What expectations should a manager set for participation of remote staff?” should be worked out before implementing a remote worker program.

One company required that all meetings be done via video conferencing including 1-to-1 meetings. Some staff members may be resistant to being on the camera though making this mandatory to participating in the remote worker program can help emphasize the importance of this connection. Reminding the employee that you see more of them in person than when they are on camera may help ease any anxiety.

Culture: A strong company culture is needed to ensure everyone is approaching servicing your clients and working together in the same manner. As you roll out a WFA program, one will need to review the organization’s values and consider how working remotely would impact them. Is collaboration important to you? Then, what tools would be needed to ensure successful collaboration continues? Is passion one of your values? If so, how would communication need to evolve to engage that passion when staff are in different locations?

Technology: Data security is the number one concern when it comes to technology. How should our servers be set up? What protocols should we use so remote workers can securely connect to our network? What equipment should a remote worker use? What about encryption? If we allow use of personal home computers, what are the risks? What about printing? How will phone access be handled? There are multiple solutions on the market today to support the technology needs of a remote workforce which makes it easier to implement this type of program.

Team Meetings: Team meetings continue as usual. Using video conferencing helps keep the group connected. The chair will need to keep in mind any delays from the video conferencing system (usually 1-2 seconds) to ensure people have a chance to share. There are a few approaches to support this type of environment. If an interactive process is warranted, the chair can ask each person directly for their feedback giving a “protected” space to speak. If this approach doesn’t work, the chair can pause and ask the remote staff if they have any feedback. The important element is to give the group chance to participate and a safe environment to speak up.

The Benefits of a Remote Workforce

Productivity will increase, staff will have a better work-life balance and they may be less stressed (not upset about being cut off on the way to work, or anxious over traffic making them late). You can reduce the footprint of your office space saving money, reduce the environmental impact of having all those cars on the road, expand your candidate pool of qualified candidates, build a stronger employee focused reputation, and open up employee referrals for potential candidates. Happier employees equal happier clients, retention of key staff members, and the potential for increased profitability.

Here is the Bottom Line

Employees need to be trained on how to transition into a remote worker environment and the expectations of their participation in the program. Managers need to understand the dynamics of supporting remote workers and the organization needs to ensure the proper tools and policies are in place for a successful work from anywhere program. In today’s world, a work from anywhere program is a viable solution for companies.

Lighthouse Consulting Services, LLC, has a consulting arm available to help with remote workforce programs. We can assist with recruiting and interviewing ideas, onboarding, managing, culture, technology, and supervision strategies such as team meetings and virtual collaboration. These can be parlayed with the other offerings from Lighthouse Consulting Services such as talent development, in-depth work style & personality assessments, skills testing and team building.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2020

Patty Crabtree is a Senior Consultant at Lighthouse Consulting Services with over 25 years of operations and finance leadership experience as well as successfully leading and growing teams.  She was instrumental in the development of an operations infrastructure that resulted in consistent increased profits and employee engagement. Patty has also effectively navigated the challenges of change management in the ever-changing business world.

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your business”. They do this through the use of in-depth work style assessments to raise the hiring bar, so companies select the right people to reduce hiring and management errors. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication and stress management. Dana has over 25 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics. He is the co-author of the books, “Cracking the Personality Code”, “Cracking the Business Code” and “Cracking the High-Performance Team Code”.  To order the books, please visit www.lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, Santa Monica, CA, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication and stress management.

Our Sino-Am Leadership Program helps executives excel when stationed outside their home country. American managers in Asia and Asian managers in America face considerable business, personal, and leadership challenges because of the cultural differences. This unique program provides personal, one-on-one coaching. For more information visit, https://lighthouseconsulting.com/performance-management/talent-development/sino-american-management-style/.

We also have an affiliate in the UK who covers all of Europe so we are now a true multi-national company that can support our clients globally.