Topgrading Slashes Costs of Bad Hires
Benco Dental is the largest privately owned full-service distributor of dental supplies, dental equipment, dental consulting and dental equipment services. During the company’s 80-year history, Benco Dental has grown from a single storefront location in Wilkes-Barre, Pennsylvania, into the nation’s fastest-growing dental distributor, with multiple showroom locations and five distribution centers servicing over 30,000 dental professionals.
In 2006, Managing Director Chuck Cohen and Vice-President, Culture & People George Rable beta-tested Topgrading in Benco's sales department. Higher performing sales reps were hired, and sales increased, so Cohen and Rable made the decision to roll out Topgrading throughout the rest of the organization.
Topgrading President Chris Mursau worked with Rable to develop a roll-out that would work with Benco's organization and current processes, to ensure success with the methodology. Managers initially complained of the time commitment that Topgrading requires, but measuring the costs of mis-hires showed the new methods' worth. The previous year's mis-hires had cost Benco 1/3 of profits.
Concerned that hiring managers were cutting corners, preventing hiring goals from being achieved, Cohen required Culture & People team members to act as tandem interview partners for hiring managers.
"Topgrading has become a key component of Benco Dental's culture. Our biggest success to date has been our hiring in management. Excellent managers hire the best associates."
- George Rable, VP, Culture & People
"Topgrading has been integral to Benco Dental’s growth and success. In the five years since we started, we’ve grown revenues by more than 30% while doubling operating income. As leaders, we often say that people are our most important asset. Topgrading provides an invaluable template for managing that asset."
- Charles Cohen, Managing Director
Conservatively measuring the costs of mis-hires (1 x average annual compensation), Benco's improvement in retention equates to adding $1,553,162 of profitability. This number was estimated to continue to grow and reach over $2 million.
Benco's success hiring managers, as rated by the CEO and two top HR managers, has improved from 27% to a projected 60% A Players, with a goal of improving to 75%.
Insights & Advice
- If managers raise concerns over the time required to conduct lengthy Topgrading interviews vs. traditional interviews, asking them one question will probably resolve their concern: “Would you rather take additional time now to make a more effective hiring decision, or spend much more time later addressing a poor hire that causes problems for your customers?”
- One of the things we found managers doing is starting out the interview by saying, “I’m sorry we need to do this, but we are going to start the interview by going back to your high school years.” There’s no need to apologize! In addition to providing great insight into how the candidate has become the person they are today, it also serves as an excellent ice breaker.
- Early in our Topgrading journey, many managers were reluctant to have Culture & People involved in their interviews. Their feeling was “How can C&P determine who a good Accountant, Programmer, or Sales Representative is?” Our response was: “We are not partnering with you because we know the technical aspects of the job better than you, but because we know how to assess cultural fit for the organization, and we interview every day, so we know what follow-up questions to ask and when to ask them.” Since C&P began to collaborate with managers in tandem interviews, this has not only facilitated a more effective interviewing process, but has served to greatly increase the collaboration between C&P and managers in general.