Lifetime hire.

In the late 1980s, Gerald S. Schwartz, president of G.S. Schwartz & Co., a public relations firm in New York, took a thoughtful look at the company he had founded nearly a decade earlier. "For years, all we cared about was billings. Our entire focus was on our top line," he says. "Therefore, the purpose of the people we hired was to feed the machine, and stoke the growth of the firm. Clients were coming in; so people were hired quickly."

As a result, the company experienced a lot of turnover, and suffered accordingly. "It was creating angst for me personally, because of the pressures of hiring and training new staff," Schwartz says. "And you have to educate every new group that comes in, so people learned what they had to learn, and then went someplace else. We were a great training ground for other agencies."

After Schwartz's epiphany, the agency made a number of changes in its HR policies, including the launch of a 401(k) plan and an employee-awards program. But, just as important, Schwartz rethought his approach to hiring and began spending more time assessing candidates, trying to find people who would stay with the company long-term. "Our turnover today is truly low," he says. With happy employees who are more likely to stay with the firm, "the quality of their work goes up, clients are happier and stay longer and pay us more, which gives us this wonderful circle that allows us to treat our people better."

Schwartz's experience underscores a basic fact: In the war for talent - as in actual combat - victory depends on sound upfront planning and seizing the initiative early on. In other words, employee retention starts before the employee comes on board - in the recruiting and hiring process. "Hiring is where it begins. If you don't hire right, you're going to have turnover," says Hal Rosenbluth, CEO of Rosenbluth International. "We look to retain everyone. When we hire someone, we do so with the perspective that this person will be with us for a long time"

The question, of course, is what sort of traits do you look for in the search for loyal employees? For starters, says Schwartz, take a look at the person's history. "We will outright reject somebody who has changed jobs too often, no matter how good they are. Sometimes, my managers are lining up at my door screaming at me because we've rejected somebody they want. But it's foolish to think that someone who has constantly changed jobs, had four or five jobs in a 10-year period, is suddenly going to stay with you."

Schwartz also keeps an eye out for people who can adapt to change - a trait that is not a function of age, he points out. "You see young people today with tremendous fire in their belly, and you might think they will adapt to anything, but in reality they may not. Some young, creative people out there are actually not that changeable. So you can't confuse somebody's effervescent personality with being able to adapt to change. Look at people like Mike Armstrong at AT&T or Lou Gerstner at IBM. These aren't young guys, but they have done more than just adapt to change - they have conquered change" And how do you look for this ability? "I don't have an easy answer to that. It's just intuitive."

Many experts also point to the importance of "interpersonal skills" and the ability to work with colleagues and subordinates in assessing potential employees. That might seem obvious, but it often gets overlooked in practice. In her studies, Valerie Sessa, a researcher at the Center for Creative Leadership in Greensboro, NC, has examined executive-selection efforts that were successful and those that weren't - meaning the executive was hired but didn't work out, and often wound up leaving the company. Although individuals in both groups cited interpersonal skills as important, the successful efforts were more likely to use those skills as a candidate requirement, and more likely to explore the issue in the interviewing and hiring process.

At Southwest Airlines, the employee turnover rate has traditionally been about half the industry average, according to Elizabeth Sartain, the Dallas-based company's vice president of people. One early indicator of long-term potential, she says, is whether candidates have done the kind of homework about the company that would suggest they are thinking long-term. "We ask people questions about why they are applying at Southwest. What we want to hear is not, 'the pay is good' or 'I heard you have great benefits' or 'it's fun.' We hope to hear that they have looked into Southwest as a career, that they have long-range objectives and that they have thought about more than, 'I'm gonna get a paycheck if I come to work.'"

It's also increasingly important to know what not to look for, says Mary Young, an adjunct faculty member at the Boston University School of Management. Young has conducted research examining familiar "life status" stereotypes that are often used to guide the search for loyal employees. "One of those would hold that the employee you really want to hire is the person who is mature, settled down, somebody who has a family," she says. "And there's an opposing stereotype that says that employees who don't have kids, particularly single people,are the most committed - that they are the ones who will stay the latest and travel the farthest, who can stand the relocation, who can take the hazardous duty assignments, because work is their life."

Young's research shows that there is in fact no relationship between life status and what she calls "commitment by choice," when people stay with a company because they want to (as opposed to the less-desirable "commitment by necessity," when people feel that they are stuck and have to stay). In other words, parental and marital status are not useful in predicting whether employees will be committed over the long term to the company - and executives who rely on those stereotypes are only fooling themselves.

FINDING THE RIGHT FIT

In many ways, a candidate's long-term potential is largely a matter of chemistry - of fitting in with the company's culture and values. That has led to a growing emphasis on behavior-based interviewing, in which questions focus on how the candidate's actual experiences demonstrate a fit with the company's culture. So, for example, an interviewer might say, "Tell me about a time when a project you were on was a big success," rather than ask the more hypothetical, "What could you bring to the table on a key project we are working on?"

"Those behavioral questions tap into what people do as opposed to what they say about what they do," says Jim Joerger, a psychologist with the Perspective Consulting Group in Portland, OR. "When people are simply asked to describe their strengths and their weaknesses" he says, "the question doesn't really draw out the characteristics of the individual very much. It just draws out their ability to do a good interview"

"If you join us and you don't fit into our culture, you really do stick out like a sore thumb, so we spend a lot of time and effort assessing the cultural fit," says Southwest's Sartain. Southwest has identified key cultural attributes for every job at the airline, as well as several general attributes that apply to all 28,000 of the company's employees. "The common attributes are things like attitude, teamwork, and sense of humor, and we ask questions based on those dimensions" says Sartain. "We might ask them to tell us about a time when they were part of a team, and what their role was on the team. Or we might ask them to tell us about a team project that didn't go very well."

"The people in our human resources organization talk a lot about the culture here," says Jim Wall, Deloitte & Touche's national managing director of human resources. "If somebody says, 'I want to go someplace where I can worry about me and not worry about a team,' they're probably better off somewhere else - and we're better off if they go there." In addition to making culture a centerpiece of discussions, the firm also reaches out to friends and colleagues of employees - a candidate pool that already has at least a secondhand understanding of the firm's culture. "The number of people that we've hired because our current employees have recommended them has gone right through the roof. We get good candidates because the people bringing them to us already know the individual and the organization"

In a similar vein, Fairfield, CT-based GE has established an "Early ID" program that calls for 50 percent of the people coming into its entry-level program to have had an internship or co-op experience with the company during college. "The reason we do that is the retention issue," says Susan Beauregard, GE's manager, corporate staff human resources. "The internship gives them a preview of our culture, work style, and the jobs they might be in - and we become familiar with them."

GE also uses managers from the relevant areas of the business to conduct college recruiting. "We feel that those people are in the best position to give a realistic preview of both the job and our values and culture. Instead of a full-time recruiter, we get someone who is in that function to be out there on campus." That realistic view - as opposed to blue-sky hyperbole - is critical, she adds. Rather than tell candidates what they want to hear just to get them in the door, "I'd prefer they say what it's really going to be like, so you'll get the ones who want what you're all about, and they'll stay."

Another approach to finding the right employees is to have a team, including the candidate's potential co-workers, involved in interviews. "You want to know what people are like, how they'll perform, how they will work with people. One way to get at that is to have a range of people talk to them," says Terry Jansen, president of Santa Clara, CA-based The Greystone Group recruiting firm.

That advice is supported by Center for Creative Leadership researcher Valerie Sessa, who found that successful executive-selection efforts were more likely to use teams in talking to candidates. "They were also more likely to include a diverse group, and to include subordinates, in the selection process. Different people bring different perspectives, so they might see things in a candidate that somebody else doesn't see." She adds that when veteran employees are at least somewhat responsible for the decision to hire, they are probably more likely to help the new employee fit in once he or she is on board.

At Southwest, interviewing is handled by a team that includes a recruiter, a "peer" employee, and a "leader" or manager from the area where the candidate might work. "Our peer is looking at the question, 'Can I count on this person to be a team player with me? If I'm in the belly of the airplane, do I want this person putting the bags on the belt?'" says Sartain. "The leader is looking at, 'Do I feel confident that this person will round out my team?' And the recruiter is looking at the overall culture fit. All three have to agree that this person is a keeper." Competition for employees has become brutal; last year, "we invited almost 90,000 people to interview, to hire about 4,200 people," Sartain says. But the company continues its comprehensive team approach because "we consider hiring to be one of the most important activities we have at Southwest."

PUTTING THEM TO THE TEST

For hiring at a more senior level "when the stakes are high," consulting psychologist Jim Joerger recommends using an assessment center that puts a candidate into certain situations and roles, while managers and psychologists watch how he or she acts. So, for example, the candidate might have to deal with a performance problem with a subordinate, cope with a harassment case, and work out conflicts with a peer and a superior. The candidate is given a rating and, in addition, says Joerger, "you get all the rich fabric detail that people reveal as they go about trying to respond to those situations."

That same concept is often employed on a less-formal basis when executives take candidates out for a night on the town or invite them to play a round of golf - and CEO Hal Rosenbluth has refined that approach into an art. "I will get people into situations where I'm observing them," he says. For example, a candidate might be invited to a cattle drive on Rosenbluth's North Dakota ranch. "I'm looking for how they are in an unusual setting, how they work as a team when it comes to 'working a calf' branding, and inoculating them - situations they're not familiar with."

If the candidate is from Philadelphia, where the company is headquartered, "I'll take them driving," Rosenbluth continues. "There are traffic patterns only a Philadelphia person would know. One lane is very slow, another moves; those who just get behind the traffic won't get hired. Those who look for alternative ways will. I'm asking them questions while they're driving, but I'm really looking for how they problem solve. It might seem bizarre, but there's a method to my madness."

Once you decide on a candidate, wooing them is still largely a matter of money, benefits, and lifestyle considerations - but all of those will be more attractive if the cultural fit is right. And, says The Greystone Group's Jansen, "executives should make sure that whoever is in charge of the hiring pays attention to the little things, because that is what is going to set you apart from the competition in attracting the right talent. Everybody likes to feel special, so take the time to send a gift basket when the offer goes out, or have a manager or executive take the candidate to dinner - that sort of thing. If the candidate has a bunch of offers on the table that are more or less the same, then the way they are treated in the interview and hiring process becomes a critical differentiator."

Just as important is easing the new hire's transition into the company. Jansen says that some of her clients pair recruits up with a coach or mentor who helps them settle in and chart a course in the organization. GE also views the transition period for new employees as a critical element in retention, and under the company's Six Sigma program, HR recently started to measure the loss of employees who have been with the company less than 18 months. To help new employees adjust, the company provides them with a seasoned "buddy," and has set up a central organization that streamlines new-employee paperwork. The idea is to "make sure people get off to a positive start, and feel comfortable here," says GE's Susan Beauregard. "If people get out of the blocks well, they tend to want to stay."

Overall, all of this recruiting and screening takes a lot of effort - but it's time well spent in the war for talent, says Jansen. "We see a lot of bad hires being made out there, because people are just trying to get bodies in the door, and they are not being as thorough as they should be when they're looking at candidates. You have to take the time to do it right, or it will cost you down the road, when employees are heading for the door."

Real Life

KATY HOLLISTER partner Deloitte & Touche, Cincinnati, OH

Home time

D & T's "Women's Initiative" has been a boon for women, men - and the bottom line.

When Katy Hollister was six months pregnant, she went to the partner in charge of her tax department and told him she wanted to phase back into work after her baby was born and her maternity leave completed. The year was 1990, and, since no other woman in her Cincinnati office had ever asked this before, Hollister was nervous about the response. Her boss said he would try anything that would keep Hollister, then a highly valued manager with six years' experience, at the firm. But the series of partner meetings and discussions that followed illuminated management's skittishness about making this accommodation. "I started to think that maybe this wasn't going to be the right place for me after I had my baby, but I very much valued my job and wanted to at least give it a chance," Hollister recalls. The firm agreed to the phaseback, but only if it could revisit the issue every two months.

Deloitte & Touche became a different world between Hollister's first child and her second four years Dater. Again she wanted to work a part-time schedule for at least a few months. But this time the stakes were higher: She was being evaluated for partnership while she was pregnant. Given the firm's acclaimed "Initiative for the Retention and Advancement of Women" in the early '90s, however, the still mostly male partners were much more accepting of her life circumstances.

For Jim Copeland, CEO of D & T and its global organization, Deloitte Touche Tohmatsu, Hollister's story represents a major success for the firm. "We came to recognize that the choice was not between two-thirds of a person's time and all of it, it was between two-thirds and none of it," he says.

D & T's support of flexible and reduced-hour work arrangements has not only benefited women; a handful of men also take advantage of the program. And the sea change brought about by the initiative has succeeded in making the entire culture more worker-friendly. Because what you do has become more important than when or where you do it, employees like Hollister feel freer to put in some hours from home after their children are asleep, rather than having to do "face time" evenings or weekends in the office. "The focus on women's needs helps put those issues on the table to the benefit of everybody," she observes.

It also seems to have benefited clients. "At a professional services firm like ours, serving our people and serving our clients are intertwined. Clients like to have our people stay with the firm so they can have continuity," says Ed Kangas, chairman of Deloitte Touche Tohmatsu. It's no coincidence, he notes, that the firm's global revenue is now growing at an annual rate of 22 percent.

Deloitte & Touche's newly nurturing culture is also increasingly attracting top-flight women. Hollister has been asked several times to speak with a woman interviewing at the firm who wanted to talk to a woman in leadership. Not only would it have been harder to find such a species a decade ago, such a woman likely would have been much less of a booster than Hollister is now. "This is a great place to work," she says. "And I know that if I ever needed to pull back and focus on my family for a while, the firm would now say 'Do what makes sense for you.' This is one of the reasons I would never leave."

Real Life

YMA SHERRY director of business development Rosenbluth International, Philadelphia, PA

Making nice

The HR director wasn't just pretending to be nice. She was nice. She had to be.

When Yma Sherry was interviewing for a supervisor position at Rosenbluth International 15 years ago, she knew she had struck workplace gold during her interview with the human resources director. "She got to know me as a person and helped me evaluate whether this was a good move for me. She seemed just as concerned about what was best for me as what was best for Rosenbluth," Sherry says.

The HR director wasn't just pretending to be nice; there's no doubt she truly was nice. That's because Hal Rosenbluth, CEO of this $4 billion international travel agency, places an emphasis on niceness in hiring all employees. "Nobody wants to work with someone who isn't nice," Rosenbluth explains. "If they're not nice, they'll mess up a good thing."

Sherry was nice, too - not to mention talented and qualified - so she was hired. Over the years she's held eight different positions, including general manager of a reservations center, director of operations, and vice president of North American operations. Then she took the unusual step of demoting herself after her second child was born because the VP job required too much travel. "I was nervous about asking to step back because no one had ever done it, and in most of corporate America it's often held against you," Sherry says. But everyone supported her desire to take a breather, and she is sure she'll have a chance at a VP role when she is ready.

Niceness is not just a criteria for being hired: 360-degree reviews are used to evaluate managers at Rosenbluth. "I'm more concerned about what my associates and my clients think than what my leader thinks," Sherry says. Compensation is based in part on the satisfaction and retention of associates below you, which for Sherry includes 400 associates in 10 operating units.

A big contributor to satisfaction is the degree of autonomy staffers feel they have in making decisions. Years ago, when her father went to a hospital in West Virginia with kidney failure, for example, Sherry tried to reach her leader to get approval to take time off. She got the leader's voicemail instead, so Sherry left a message saying she didn't know when she would return. "I got on a plane and was with my father five hours later, never once worrying about what would happen to me at work," Sherry recalls.

The ability to so calmly accept people's personal predicaments stems from Rosenbluth's desire to see all employees as lifers. "When we hire someone, we do it with the perspective that the person will be with us for a long time," Rosenbluth says. "Then it's our responsibility to create the environment that makes them want to do that." As Sherry notes, "If you view someone as being here for 30 years, even if they need to take three months off, it's no big deal. It only becomes a crisis when you view them as being here for a year or two."

With its emphasis on embracing people for decades, Rosenbluth wants to be sure it hires people it will want to have around that long. Sherry is pleased she was hired when getting a job at the company wasn't tougher than working there. She only had two interviews; today a key hire might have 10. "It's scary to bring people in from the outside, so we really want to get to know them," she says.