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-My name is Caleb Taylor. I'm a host here at Thrive15 and we're going to be sitting down with Clay Clark. And he's going to be showing us a few secrets in this whole hiring process. Specifically, you will learn what types of people to look for, and characteristics. And also, learn some ways to save you time during this whole process.
As CEO of GE, Jack Welch said, the team with the best players wins. You're going to be hiring for your company for years. So if you understand how to put the best players on your team, you'll be well on your way to thriving like never before.
Now remember, here at Thrive15, we believe that knowledge without application is absolutely meaningless. So as you're watching the episode today, continually be asking yourself, how can I apply this to my life, my small business ideas, and my business? If you don't, today's episode will be more meaningless than a hamster wheel for a three-toed sloth.
-All right, Clay. Today we're coming to you learn the secret, dark art of hiring.
-It is a dark art.
-I know for lots of entrepreneurs, this is a frustrating topic that they have to deal with it.
CLAY CLARK: Yeah.
-It sucks a bunch of time and it's often not successful.
CLAY CLARK: Yeah.
-So we're coming to you. You've hired a lot of people. You hired me, so I don't know if you're qualified for this--
-Yeah. Well you see this in most businesses today. Because the average American entrepreneur, or entrepreneur throughout the world, has 10 employees or less. And it's usually, like-- Michael Jordan when he played for the Bulls before Phil Jackson.
So he's out there scoring 40 points a game and everybody else is standing around doing nothing. And we do not want that to happen. So this is absolutely important. You're absolutely correct.
-Good. Well then let's jump right into it. First principle here-- it's do your research. Because we know the entrepreneur's time is valuable. So I think there's ways to save time with this hiring process. And one notable quotable here-- we have from Reid Hoffman, founder of LinkedIn.
He said, "The interview process takes 12 to 15 hours of your team's time. This process is expensive for your team, so you should vet people in advance. A technique I use is to email the references and say, hey, rate this person 1 to 10. No one's going to reply a five or a three by email. That means they hate the candidate. Call me usually means the response is for a sub-seven rating. And at the same time, nobody's going to give out a 10. So what you're really looking for is a bunch of eights and nines. This is an exceptionally quick referencing system when you're trying to make that list."
So what do you think about that quote? I know that I read an article here-- an AOL Jobs article from April 1. It actually revealed that 46%-- nearly half-- of job applicants commit some form of resume fraud.
-I think lots of people are guilty of that. What do you think about that?
-Well what I do, and I'll just show you on the board here if that's OK. What I do is I look at it this way.
We have to get a bunch of candidates into our pipeline, OK? So our whole goal is to get a lot of candidates into the pipeline. And then we're going to have to interview these people.
And then, when we interview these people, of the people we interview, we're only going to get about 50% of the people that we interviewed that we even might be able to hire. And then we end up hiring, let's say, two people. And then, of those two people, half of those people aren't going to work out. And so we equal one.
And so my goal is to get through this as much as possible. So if we have 10 candidates, we'll interview them. We'll end up with five that we could hire. We'll choose two because they have good resumes. And then we'll end up with one that'll actually work out.
-One thing you do-- you don't do one-on-one interviews.
-I can't stand doing one-on-one interviews because I know that if I set up 10 appointments, I'm only going to have five of them even show up on time. So this is literally my-- this is the Clay Clark method for hiring in a small business. I literally will put out a resume on monster.com, on Craigslist, on any of these job posting boards, OK? Monster.com, Craigslist.
There's one called Bullhorn Reach, which is a really cool tool that we can get into later. But that's on Bullhorn Reach, and that's provided by LinkedIn. And then I'll put it up on Facebook, telling people that we're hiring.
And what I'll do is-- anybody who responds to this, I'll explain to them we are having an interview at 5:00 PM. Usually it's 5:30 PM. So 5:00 PM or 5:30 PM on Wednesday and, let's say, Friday. So anybody who responds-- they'll say, here's my resume.
People email me a ton of questions. Like, I was just curious about the job. I'd like to talk to you to see if it's a good fit. I want to know what you guys are about, what your values are.
Meanwhile, I respond with a generic auto-responder email. I literally respond with the same email every time, saying, hey, we're excited about you. Your resume looks incredible.
I don't care what your resume says or even if you have a resume. I'm just going to send the same email. Hey, your resume looks incredible. We would love to interview with you at 5:30 on Wednesday or Friday. Which one of those time seems best for you?
And they'll respond Wednesday or Friday. Then I put them on the schedule. And at the interview, we have 10 candidates that are supposed to show up.
10 of these guys. And literally, only five of them have the mental tenacity, fortitude, or job skills needed to show up on time. So now we're down to five.
-That immediately eliminates them.
-It immediately eliminate them.
-There's no excuse.
-Then we do a group interview. We interview them all as a big group. And after we interview them as a group, we end up with-- of those five-- two that we say, those two people look like they might be a good fit. And then of those two, we bring them on for a trial work basis. They get to shadow for a day or, basically, work in the office.
And of those two, we end up with one that we can actually keep. And usually, of these two-- we brought on a guy a couple weeks ago. And he had this great resume, awesome degree. And I think you sat next to the guy.
And he just couldn't stop texting for long enough to actually be trained. And then he kept wanting to take breaks before the day started. And he kept wanting to know, am I getting paid for this? And all that kind of stuff.
-This isn't going to work out, buddy.
CLAY CLARK: Yeah. So again, if I had interviewed all 10 candidates for an hour, I would have spent 10 hours, right?
CALEB TAYLOR: Right.
-Then I would have had to spend the onboarding time of training these 10 people. And I would be talking about what Reid Hoffman's talking about, spending-- what did he say? 15 hours or--
-12 to 15, on average.
CLAY CLARK: I would have spent 12 hours on these people. But instead, I only spent one hour here. And I spent one hour here. And I'm able, in two hours, to find out whether they're a good fit
Searching for small business ideas?
-So a time-saving method is just to start with a time. Because you know they're all gonna break down. And then also, when you're posting for jobs, you're not just posting on one of those four options, right?
-I post on all of these forums every week. Now, what I like to do is I like to post on all these forums at least two times a week. So monster.com, Craigslist, Bullhorn Reach, Facebook. I like to post on all of them at least twice a week.
-I love it. That's something that you can practically apply right now. Don't post on one. Post on all four.
And then never do individual interviews. That's a waste of time.
-Yeah. And you said there was a stat there. You said, was it 40%?
-46% of job applicants.
-46% of job applicants are lying on their resume. So I'm just throwing this out here for you. There's some amazing stats.
But it's like 75% of employees. There's all sorts of research that shows this. Like three out of four employees steal. And 46% of these people are lying on their resumes.
So for me, I bring people on. And I have this belief that only about one out of 10 of them have what I need, which is called integrity and a work ethic.
-So I just want to fire through them as quickly as possible.
-Right. And I think other entrepreneurs, we get stuck in that belief that if I can get one or two good candidates, then I'm good. But you can't shoot for two in that interview. Gotta shoot for 10, 15.
-Just one final point on that. There's one company that I've done some work with years ago. And what they did is they were hiring people. And it would take them usually two months to find a candidate. And then the candidate they would find, it would take them about a month to find out if they were good.
-And it would usually take them 10 candidates before they found the person who would work out. So it was taking them almost a year to find one new employee.
I typically can find a whole team of people in less than 30 days.
-You cannot thrive at that pace.
-You cannot thrive at that pace, unless you consider thriving--
-Moving at the pace of a sloth.
-So principle number two here. Education does not equal success. We know this is something that you're passionate about it here.
-Come on now.
-You just mentioned we had a candidate in here with a great resume, had all the education, but that didn't equal success. In fact, we've got a notable quotable here--
-Here we go.
--from Elon Musk, founder of Paypal, SpaceX, and Tesla motors. He says, "as much as possible, avoid hiring MBAs. MBA programs don't teach people how to create companies. At my companies, our position is that we hire someone in spite of an MBA, not because of one."
That's a bold statement. That's ridiculous. People don't say that.
-I think you would have to discard what he says as complete hoo ha if he wasn't a multi-billionaire. And he wasn't the guy being hired to basically replace NASA. His rockets are going up in space because NASA couldn't affordably do it.
And he's created the first reusable rocket that does it. And he created Paypal. And he's created Tesla Motors. And those parts that Tesla Motors makes are being used by auto companies all over the world.
So here's a guy who's one of the most successful people in the world telling you this stuff. So I think we have to listen a little bit.
-Did you hear about what Google is doing too? I read an article in the New York Times. It was titled, "How to Get a Job at Google." And they quoted Senior Vice President Bock when he said, "GPAs are worthless as a criteria for hiring. And test scores are worthless. We found that they don't predict anything."
-Well, let's think about this for a second.
-That's a good thing for you, right?
-Well, what does the Google Senior Vice President know about hiring? Google's a small company. I don't even know if they're going to make it.
-No. Just keep doing what you're doing.
-Yeah. Just whatever. I men, the guy who started Tesla Motors is probably just a ridiculous yahoo. And his Space company's probably just a bunch of drivel. And Paypal is probably a passing fad. And Google is probably going to be replaced any day now by the yellow pages, or something.
-Yeah. Probably not.
-So how do you apply this, though. In your company? What does this look like practically to you?
-Well, what I do is, if I have someone's resume-- I'm just gonna give you an example. This is the resume. And this is their GPA and their test scores.
What I do is I put this into my circular filing cabinet next to my desk. Some people call it the trash can. I would just take that. And I would just be whoop! And then I just put it over there. And then I look at their face.
-And that's all yo go off of.
-That's all. I don't even care. You can make this up or not make it up. And I'm not going to test or verify or check, because it doesn't matter.
And to illustrate a further point, a good friend of mine whose name I will not mention, he applied for a school teaching job years ago. And he graduated from a college that he is not proud to have graduated from. The schools is kind of infamous.
And so on the resume they asked him, what college did you graduate from?
-OK. And he said--
-Southwestern Baltimore State, as opposed to the name of the college. And nobody checked. And only when he decided to retire from teaching at this public school after 30-some odd years, did somebody find out that Southwestern Baltimore State was not actually a university.
So all I'm getting at is it really doesn't matter. Now if you're watching this right now, and you're a parent and you're paying for your kids to go to college, if your kids want to become an architect or a doctor or something that requires a professional degree, I mean, obviously you need that.
But if not, and you get this feeling like, is he saying that college is a waste of time? Yeah. That's what I'm saying. It's a waste of time.
-I mean, you loved having employees that didn't go to college.
-I felt like I was behind the eight ball because I did graduate. I was embarrassed to come work for you.
-Well, I think the thing is about college is that it teaches you how to get a test done right. It teaches you how to basically study and to get a A. But in business you don't want to get an A. What you want to do is you want to go out there and take the test without studying and get an F, and then find out what the test answers are. And to take it again and get a D, and a C, and you want to fail forward as fast as possible so that you can eventually get an A.
Or you want or you want to pull a guy aside and say, hey dude? Do you have all the answers to the test? And he says, yeah. And you just get the answers from him.
And that's what business is all about. It's going fast. Business, if you're sitting around looking for the perfect answer, you'll never get started. And that's where a lot of entrepreneurs struggle who have that collegiate background, because they're sitting there looking for the perfect answer.
And there is no perfect answer. The answer is action. Action is what makes things happen!
It's not about just memorizing a bunch of crap and putting in on a piece of paper.
-So your practical action step is you don't need to focus on who has the most qualified education-wise. You go by that face-to-face encounter. And our next principle, number 3, character comes first.
-Well, I want to make sure that we don't forget what Reid Hoffman says. We look at those references. References matter.
And then look at them in the face. References matter. And look at them in the face.
I'm just saying, we had a guy just last week who's been in the film industry for I think 20-something years. And we said specifically that the interview would start at like 5:30. He claims at like 6:00 that he couldn't find it and that Google Maps was wrong.
Well, one-- I'm not stupid. Two-- so I'm like, well, can you show me where the Google Map listing was? I want to make sure I get that fixed.
Oh, yeah-- it was on my phone. Well, let me see on the phone. I want to fix that.
I mean, it doesn't matter what his degree is. If the guy can't get it together, I don't want to hire him.
-So now you're face-to-face with an employee, or you can even do the references check. You need to know that character comes first. You've got to find a way to figure that out, right?
-And so Warren Buffett even said, "Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. If you don't have the first one, the other two will kill you. Think about it. It's true. If you hire somebody without integrity, you really, really want them to be dumb and lazy."
-That's Warren Buffett there for you.
-I even saw an article on CBS News that cited, the US Chamber of Commerce estimates 75% percent of employees steal from the workplace, Clay. Have you ever experienced that? Is that true in your experience?
-I'm gonna say this real quick. This is something that I did years ago. I thought it was funny. But I did it because I wanted to prove a point.
What I did-- and this is something that every business owner can do. It's called the $20 bill test. OK.
This is a system that I've created. It's very, very popular. Right now I think this is really catching on in Western Oklahoma.
I taught this--
-I taught this to Northwestern-- it's like a state university in Alva, Oklahoma. And a business owner there told me he did this.
-Wow. There you go.
-What you do is if you have a group of employees, and you feel like one of them is dishonest, you just take $20 bills and you leave it out.
Well, in our office, everything's being recorded all the time. Right? So you set up the camera. And you leave the $20 bill out there. You don't tell people it's being recorded. You just set it out.
And I had found that by doing this, I would see people literally taking the money, looking around, all the time. And I'm like, hey, dude. There was $20 that I accidentally left on the desk. Did you see it?
No, I didn't.
OK. You're fired. Awesome. And I would just do this. The $20 bill test.
So but all I want to tell you is that US Chamber is saying, instead of having to leave $20-- because for me, I didn't know the statistics at that time. I wasn't that smart at that time.
This was like when I was like 22 years old. I was discovering this.
So what the US Chamber is saying is that 75% all employees are stealing. So what I'm saying is, I want to call those references with the extreme diligence. And I want to say, Reid doesn't like to call them. He likes to send an email. And he's smarter than I am. So I recommend sending an email.
-Saves more time.
-But the point is, I'll get on the phone with somebody, and I'll say, is Caleb Taylor high integrity? And they'll say, yeah. He is? OK. So when he worked for you, he never stole, never lied, never was late, never talked to me about it.
And they're like, well-- and they'll tell me. And for you, someone like yourself, people have great things to say about you. And then if it's a guy like, we have one guy who's filming us today. I didn't have any real references on this guy. So I thought, you know what I'm going to do? I'm gonna hire him on a trial basis. And I'm going to see if he has integrity.
And you know what? Doesn't have a degree. Doesn't have the pedigree. Doesn't have the big references. But his integrity just screamed, said, keep me here.
So we've got to test that integrity as soon as possible. So if you don't know, $20 bill test is a great way to cut down. Just set up a camera, throw is down, it works every time.
-There's a simple action set. $20 test. But you have to, have to know what their integrity is like. Cause nothing else matters. It doesn't matter how qualified they are. If you don't have the integrity, it's gonna hurt your business.
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