The middle market is on fire, outpacing the national economy in growth of both revenue and jobs. But what will it take for the sector to retain its leadership position in the coming months and years? The answer might surprise you.
Whatever line of work you’re in—manufacturing, financial services, information technology—there’s no doubt your employees need to be knowledgeable and skilled. But this isn’t enough. Character is the missing link to excellence.
Consider these sobering facts:
- Employees who are actively disengaged from their jobs cost U.S. businesses between $450 and $550 billion per year, according to a “State of the American Workforce” report from Gallup.
- The typical organization loses 5 percent of revenue each year to fraud, according to the Association of Certified Fraud Examiners’ 2014 global fraud survey. The survey’s findings indicated the median loss due to fraud was $145,000; 22 percent of cases involved losses of at least $1 million.
- Workplace violence costs businesses an estimated $36 billion a year and affects over 2 million Americans.
These statistics suggest a painful truth in business: Questionable character is costly.
For the past two years I’ve spoken with business executives and thought leaders around the world to explore the role that character plays in a business’ success. No one has disputed the value of hiring honest, hard-working and loyal people. Why, then, don’t businesses place character front and center in the hiring process?
Bring Character to the Forefront of Hiring
The most common reasons managers give as to why their organizations don’t emphasize character in hiring and promoting employees are, first, that there doesn’t seem to be a universally understood definition of character; and second, even if we could agree on what it means to be a person of high character, we don’t know how to measure those qualities.
These challenges are not insurmountable. Even if there isn’t a one-size-fits-all definition of character, and even if evaluating character is more of an art than a science, middle-market companies that place a premium on the character of job applicants and current employees are positioned to succeed in ways their competitors cannot.
High-character employees benefit their companies in these ways:
- They make coming to work a more agreeable experience for everyone, which is good for employee morale.
- They contribute significantly to the organization’s financial health by being highly productive and developing strong relationships with clients.
- They tend to be loyal to their employers.
- They advance the company’s mission of enhancing people’s lives.
- They reflect well on the company, which is valuable for its own sake and also promotes positive word-of-mouth.
I’ve identified ten crucial qualities associated with high-character employees. They are:
I’ve also developed a series of questions employers can use to determine the degree to which a job candidate will be a high-character employee. For example: “Tell me about a time when you had to tell a direct report an unpleasant truth. What were the challenges and how did you get past them? What were the consequences?”
The ‘Good Ones’
Ross, a senior vice president at a consulting firm, needed to tell Hazel, his direct report, that she wasn’t going to get the promotion she was expecting. “It was partially my fault for not having submitted the correct paperwork on time, which I didn’t know I was supposed to do,” Ross told me. “Mostly, though, it was our company’s bureaucracy that got in the way of Hazel’s promotion. Hazel would have found out on her own in six weeks, but I decided that the bad news should come from me. I didn’t want her waiting for something that wasn’t going to happen.”
He fretted for days before talking with Hazel. “I was afraid she would quit, which she would have been perfectly justified in doing. She has been with the company for seven years and has always done a good job. Well, she was very angry when I told her she wouldn’t be getting a promotion this time around. But I was glad she felt safe expressing her frustration to me, and it gave us an opportunity to have an open and honest discussion about her role at the firm.”
Ross pressed his own supervisor to get involved, and eventually Hazel got both a promotion and a raise. “Hazel told me she appreciated that I told her what was going on,” Ross explained. “She knows she can trust me to be straight with her and to fight for her, too. That may be one of the reasons she still works here.”
Ross’s commitment to being honest, in spite of how uncomfortable the truth can be, is why I consider him one of the Good Ones—employees whose high character contributes to a business’ success.
Character may be an unusual topic of conversation in business, but as stories like Ross’s reveal, character is observable, subject to evaluation and indispensable. The ten character traits above are qualities that smart middle-market companies value in their employees and managers. Taking character into account when hiring and promoting employees won’t guarantee that the people who work for you will always make the best decisions, but it increases the likelihood that they will.
It’s time to place character front and center in our thinking about business in the 21st century. The Good Ones do. How about you?
Bruce Weinstein is known as “The Ethics Guy” and works closely with middle-market companies to help them hire and promote high-character employees. His latest book, upon which this article is based, is “The Good Ones: Ten Crucial Qualities of High-Character Employees.” He will soon be a regular contributor to Fortune’s leadership channel and has discussed ethical issues in business on major television networks, including CNBC, Fox News, CNN and ABC. Learn more about Weinstein at his website, TheEthicsGuy.com, or contact him at Bruce@TheEthicsGuy.com or (646) 649-4501.