The Risks of Not Managing Talent

Bronze Face_FotorThe unwanted loss of even one leader can be costly, given that 46% of replacements fail within 18 months (according to a study by Leadership IQ) and, among senior ranks, the cost of this failure to the organisation can exceed twenty times salary.

Imagine that cost being multiplied by your annual churn rate for managers. The truth is that managing this risk is complex – for it isn’t technical skills that result in new hires failing – it’s most commonly down to poor interpersonal skills.

Coach-ability, emotional intelligence, motivation and temperament – sometimes still collectively referred to as “character” – are much more predictive of a new hire’s success or failure than technical competence. Understanding technical competence remains a popular subject amongst interviewers simply because it’s easy to assess – yet it doesn’t contribute significantly to reducing the critical leadership appointment risk. So do some selection interviewing methods (e.g., behavioural, chronological, case study, etc.) reduce the risks of new hire failures?

Apparently not, according to the Leadership IQ study. No significant difference in failure rates was found across a range of different interviewing approaches. However, 812 managers experienced significantly more hiring success than their peers. What differentiated their job interviewing approach was their emphasis on interpersonal and motivational issues and their willingness to back their insights. Those managers that asked about and looked/listened for evidence of candidates coach-ability, emotional intelligence, motivation and temperament, saw vast improvements in their hiring success rates.


The three-year study by Leadership IQ, a global leadership training and research company, compiled these results after studying 5,247 hiring managers from 312 public, private, business and healthcare organizations. Collectively these managers hired more than 20,000 employees during the study period.

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