Is it better to hire for cultural fit over experience?

April 28, 2011: 9:44 AM ET

The ideal candidate may become a disaster if he doesn't fit company culture, but how do you screen for something as nebulous as cultural fit? 

By Ethan Rouen, contributor

FORTUNE -- You know that dream job candidate? The one with the pristine resume and Ivy League credentials. The one that companies try to steal from their competitors by offering generous salaries and lavish benefits. The same dream candidate that can just as easily turn into a nightmare by the time he signs his contract and props his feet up on the mahogany desk in his corner office.

While most businesses continue to scour resumes and lurk on LinkedIn for the person with the most experience and degrees from the best schools, hiring firms and researchers are beginning to realize that in many industries, the most qualified candidates often do damage to a firm when they don't jibe with the firm's culture.

"Cultural fit is incredibly important on a candidate's abilities to use his skills," says Nancy Rothbard, an associate professor of management at The Wharton School. "You have a positive effect through skills, but culture completely cancels that out."

Cultural fit can cover a variety of characteristics, but ultimately, Rothbard and others say, the question hiring managers should be looking to answer is, does this candidate's values align with those of the company, be they work-life balance, corporate mission or how to handle a customer phone call.

Rothbard and two co-authors published a paper, "Unpacking Prior Experience: How Career History Affects Job Performance," in Organization Science in 2009 that examined the hiring practices at an insurance firm. They expected that poor fit would be detrimental in the success of new employees, but in fact, the results were a surprise to researchers: poor cultural fit completely eliminated all the good that came from experience.

Culture varied so vastly from company to company in the study that some of the most experienced hires appeared to need retraining to complete tasks they had been doing for years.

"We tried to hire from our competitors and paid a premium for the experience, but [those hires] were the least successful," a senior human resources manager told the researchers.

The learned skills that an employee honed, such as haggling over claims at one insurance company, hindered that employee's development at another organization that charged high premiums but provided excellent customer service, Rothbard says.

These issues are not restricted to the insurance industry. Brian Kropp, a managing director at Corporate Executive Board, says that companies value personality over experience in a range of industries.

"The culture of Goldman Sachs is very different from the culture of Wells Fargo," he says. "Both are financial services firms and do similar things, but their employees behave very differently."

In his studies, he has found that almost half of an employee's success in the first 18 months on the job can be attributed to how the employee fits in with others in the organization while the rest of his success depends on whether he can do the job.

John A. Challenger, CEO of outplacement consulting firm Challenger, Gray & Christmas, says that qualifications are malleable, but fitting in -- a less quantifiable measure -- should make or break a candidate.

The more senior the open position, the more a company ought to ensure that a candidate's personality is in line with the organizational culture, Challenger says.

"At higher levels, you need to conduct multiple interviews across the chain, with employers and employees," he says. "What kind of connection do you feel to the candidate? Does this person seem like one of us?"

Answering those questions can be the greatest hiring challenge. There is no one concrete way to test for cultural fit, so it's best to approach the task from several directions.

"Interview questions tend not to be great predictors," Kropp says.

During formal processes like interviews, Kropp says, candidates tend to tailor their answers to what they think the interviewer wants to hear.

The use of psychometric tests to gauge a candidate's fit continues to increase in popularity, especially in Europe, Kropp says. These tests are a somewhat more scientific way to measure something that is, in reality, immeasurable.

Employers are also drafting more detailed job descriptions as another strategy. Many job descriptions are filled with platitudes and clichés, instead of focusing on the specific tasks and qualifications that a firm is looking for.

Instead, Kropp says, some companies are providing detailed information about the company and its culture in the postings. The hope is that candidates will screen themselves out when they see keywords that don't align with their lifestyles. Someone looking for a 40-hour week will likely be discouraged by a listing that advertises long hours, while a job seeker who thrives in a team environment would skip an ad that requires lots of independent work.

"Rather than have the organization do an assessment, they can make it much clearer, and clearer earlier, what they are looking for, so job candidates can figure if it's a bad fit," Kropp says.

The downside of relying on self-selection is that, in the current job market, applicants may try for jobs that they know won't fit them, convincing themselves that they can change.

The most effective way to find a candidate that belongs to the group may be to look within the group. Relying on employees' networks to recruit people they know is cost-effective and creates a higher level of assurance that the rest of the team will want to work with the new person.

Referrals have the added benefit of empowering employees, giving them a sense of ownership and the opportunity to pick their coworkers.

"The best way is not to test," Kropp says. "Like people like to spend time with like people. That is where networks come in."

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