You Never Need to Compromise Quality, Speed or Cost of Hire – Here is How to Win at All Three

A few weeks ago I was talking to the CEO of a $250 million business looking for a CFO. He started the meeting complaining that the recruiters he’s used in the past always try to talk him into compromising on the quality of candidates they present. I met this CEO through the head of a private equity firm where I’m now helping them interview CEO candidates for a major new company. The Chairman of the group also complained that the quality of the candidates they had been seeing from a major executive search firm were all over the map.

So when I read a post on this blog advising recruiters to discuss with hiring managers the trade offs between quality, speed, and cost in the candidate search process – I had to take a pause. I have been recruiting 40+ years and I am a firm believer that there don’t need to be any trade offs between these core metrics. It is possible for a good recruiter to achieve all three given the right strategy. Here is how it’s done:

Maximize quality of hire by redefining success

Of course, the root cause problem is that recruiting top tier candidates is not possible using traditional job descriptions. So you need to convince hiring managers to put these aside during the intake meeting. It’s common knowledge that skills, experiences and competencies have been shown to be weak predictors of on-the-job performance. If you know a top performer who has been promoted, you have all of the proof you need to agree on this point. The reason people are promoted has little to do with their skills and experiences and all to do with their successful performance and ability to learn. So rather than use a “pick two out of three” approach, it’s better to redefine how performance is measured.

For example, for the CFO project the CEO began our initial meeting showing me the traditional list of “must have” skills, required experience and perfect personality traits. I said this wasn’t a job description but a person description, so let’s parking lot this for a minute. He didn’t argue. Then I asked him what the person needs to do in the CFO role to be considered very successful during the first year. We came up with six performance objectives that focused on improving margins by 5-10 points, implementing a companywide planning and budgeting system and developing an ROI-based decision making process used at every level in the company.

He instantly agreed this was the right way to measure performance.

Minimize time-to-fill by implementing a “small batch, high touch” process

There’s no need to compromise on speed. The key is to only spend time with candidates who are a strong fit for your job rather than wasting your time weeding through skills-qualified people and hoping someone reasonably good will be interested. In this case a strong fit is defined as someone who is performance qualified (meaning he/she can do the work described above), possesses the Achiever Pattern (the person is consistently in the top 30-40% of his/her peer group) and the person would naturally see your opening as a career move.

Combined with “Clever Boolean” and an advanced recruiting technique called “Cherry Picking,” finding people like this is not difficult as long as you implement a 40-40-20 sourcing program. This means spending 40% of your time getting referrals, 40% direct sourcing and 20% writing compelling messages that are pushed to your target audience. Specialist recruiters have a distinct advantage since they’re constantly building talent-rich pools. This way finding a few hot prospects in a week or so is likely. Generalist recruiters who are proactive networkers and have a license to LinkedIn Recruiter can still deliver prospects in 5-10 days.

Reduce cost per hire by offering candidates a huge non-monetary increase

Of course, you still need to recruit and close these people but you do this by offering people a 30% non-monetary increase rather than saying you can’t afford to hire these people. This means the job must offer a combination of more stretch, more rapid growth, more impact and a mix of more satisfying work. This is a go-slow, high-touch relationship-based recruiting approach.

This has nothing to do with filtering prospects on compensation, title and location. It has all to do with making the case that your open job puts the person on a stronger long-term career trajectory. For example, for the CEO project the top candidate was willing to take a drastic reduction in compensation to lead a unique start-up. Early this year, I talked with an engineering manager who was willing to take a modest increase for the chance to lead the design efforts for a new AI-based marketing platform. And last year I got a senior HR director from a bigger company to relocate to a less desirable area in order to get a VP level title for a slightly smaller company.

So forget the two-thirds approach to recruiting. Instead redefine performance, find a few strong prospects who would see the opening as a career move and then close the deal based on what the person can become rather than what he or she receives on the start date.

When It Comes to Hiring, Start with a 3-Legged Stool

If you're a job seeker, what would you do if you could only apply to 4-5 jobs in any given month?

I suspect you'd be a lot more focused and conduct a lot more due diligence before hitting the apply button. I also suspect that recruiters would pay a lot more attention to you since they wouldn't need to pour through hundreds of resumes of people who just indiscriminately hit the apply button.

Now what would you do if you were a hiring manager and were told your new operating guideline was that you were only allowed to formally interview three candidates and you had to hire one of them? I suspect you wouldn't do what you're now doing.

In October 2017 at LinkedIn's Talent Connect 2017, four thousand people descended upon Nashville to discuss every possible hiring problem that exists and what to do about them. I pretty much told everyone it would be a great party, but unless they started completely over, things would be different but no better.

I then asked the following questions to demonstrate the point that when it comes to hiring, companies have forgotten that stools have three legs.

  • Why do recruiters need to review 150 resumes to make one decent hire but only 3-4 referred candidates to make one great hire?
  • Why do we hire people we know based on their past performance and potential but we hire strangers based on their past experience?
  • Why do hiring managers want to hire candidates who can hit the ground running but the best people who can hit the ground running want to run on different tracks?
  • While we all want to hire more diverse people, why do we expect them to have the same skills and experiences and look and sound like everyone we've already hired?
  • Why do recruiters and tech vendors get excited about doing the wrong things faster?

I attribute all of these problems to the lack of the right hiring strategy, the focus on jobs instead of career moves and the use of duct tape rather than a business process to make hiring decisions.

As far as I'm concerned, a more effective and efficient solution for hiring revolves around the three-legged stool concept of integrating strategy, people and process that's designed from the perspective of the people companies actually want to hire. This seems like Business 101 to me but when it comes to hiring it seems like an idea from an alien world.

The Strategy Leg: Supply vs. Demand Determines the Talent Strategy  

Too many companies design their hiring processes based on the assumption there's a surplus of top talent ready and willing to work for them. While a flawed assumption, the premise results in a "weed out the weak and avoid mistakes" mentality at each step, including how job descriptions are written, how candidates need to apply and how they're interviewed.

The strategic point in all of this is that you can't use a surplus of talent model when a surplus of talent doesn't exist. In a talent scarcity situation you need to attract the best in, not weed them out. This requires a high touch relationship approach offering true career growth rather than an impersonal transactional process offering people ill-defined lateral transfers.

The People Leg: Offer Career Moves, Not Lateral Transfers

Regardless of the job, the best people have no need or desire to consider ill-defined lateral transfers. Generic job postings that over-emphasize "must have" skills, experiences and competences are proof of this surplus of talent process design mindset.

Instead, jobs need to be customized to attract top talent based on the person's intrinsic motivators to excel, and the evaluation process must be slowed to demonstrate that these jobs offer true growth. This is comparable to the discovery step in solution selling where buyer and seller develop win-win solutions. As important, the decision criteria used to make an offer and the criteria used by the candidate to accept it must be aligned emphasizing long-term opportunity, not short-term convenience or compensation.

The Process Leg: Think System, Not Duct Tape

Too many hiring processes today are nothing more than a bunch of independent processes duct-taped together to form a so-called hiring process. The result is a hodgepodge of wasted activity rather than a well-tuned hiring machine. For example, at Nashville, I contended that the use of behavioral interviewing exacerbates the problem by focusing too much on avoiding hiring mistakes rather than attracting the best, which requires a mutual respect and discovery process.

I then demonstrated how Performance-based Hiring corrects for this fatal systemic flaw by designing every step in the hiring process based on how top people - both active and passive - look for and change jobs and how they make career hiring decisions.

Walking on All Three Legs: Walk the Talk

If talent is #1, then hiring managers need to be hired, measured and promoted on how well they do!

To get started walking this path, try to figure out what you'd do if you were a recruiter or hiring manager or business leader and were only given three shots at hiring someone. I suspect you'd work backwards building some type of three-legged stool. And even if it was a bit off kilter at first, you'd soon figure out what you need to do to eliminate the problem. To get started walking even faster, if the first candidate you meet is not hirable, stop everything and figure out why not, because you only have two attempts left.

The Fatal Flaw in Behavioral Interviewing

The other day a woman at a webcast I was leading asked why I didn’t think behavioral-based interviewing is effective for assessing competency, fit and motivation for a specific job. My two-minute response related to the fact that generic behaviors, like motivation and team building, are too generic to draw specific conclusions about a specific job.

For example, while most people can give excellent examples of being motivated, it doesn’t mean the person is always motivated to do any type of work in any situation. That’s why it’s important to understand what caused the motivation to determine if the person is fit for the actual job that needs to be filled. Despite this very severe weakness, a structured behavioral interview has value by increasing objectivity and, as a result, reducing hiring errors due to bias and emotional decision making. In fact, all of the validated evidence to support the use of behavioral interviewing is largely based on eliminating these types of unforced errors in hiring. There is no validation that it improves quality of hire.

In fact, it actually reduces it. The problem is that asking structured and formulistic questions is a turn-off to the highly talented, especially passive candidates, and, as a result, they often voluntarily opt-out of consideration early in the process. In my opinion, the consequences of losing good candidates due to the use of behavioral interviewing minimizes it's value even if it was a good predictor of performance, which it isn't.

Start with the task rather than the behavior.

The problem is it takes multiple behaviors to complete any task and some people complete the same task differently. Completing any project successfully typically requires a dose of technical ability, strong project management skills, the ability to persuade others and the motivation to overcome obstacles and setbacks. Asking for examples of each of these behaviors misses the big picture – can the person lead major projects with tight deadlines working with lots of different people on time and on budget? For most people, it might be better to delegate most of the work rather than doing it themselves. But from a behavioral assessment, this might be the wrong answer.

So rather than ask a person to give an example of when he/she used a specific behavior, ask the person to describe in detail a major accomplishment related to a specific job need. As part of the fact-finding to fully understand the accomplishment, ask the person to give examples of when he/she took the initiative, solved a difficult problem, coached others and had to make difficult trade-offs that affected the person’s value system. This type of performance-based question focuses on performance as the focus of the question and the behaviors as a means to achieve the objective. Making the assessment for fit is much easier using this type of question by comparing the scope, scale and complexity of the project to actual job needs.

You first need to define the real job, culture and environment to make the comparison.

While putting the behaviors under the umbrella of the accomplishment is a better means to understand how the person accomplished the task, making the comparison to the real job requires an understanding of the real job.

You can figure this out during the intake meeting with the hiring manager by first putting aside the list of skills, experiences and required competencies. Instead, ask the manager what the person needs to do to be successful. Then have the manager describe the job in terms of tasks or deliverables, the role the new hire will play (e.g., build, lead, design, audit, etc.), and some metrics of success. For example, complete the widget advertising plan in 90 days. This is much more insightful than, “Be results driven, have 3+ years of UX design experience and an MBA.”

To be sure job expectations are fully clarified ask the hiring manager how each requirement on the original job description is actually used on the job. For example, for “Strong Cultural Fit” the response might be, “Complete the XYZ product roadmap quickly with limited resources.” Often these clarifying statements can be embedded in the tasks and projects defined initially.

Without this type of job analysis and understanding of real job needs even the OD experts recognize the weaknesses in the behavioral interview.

Examine the trend of performance over time.

As shown in the graphic, you’ll gain more insight into the candidate’s fit with the job by plotting the scope and scale of the person’s accomplishments over time. You’ll also be able to observe how different behaviors and skills are used to complete critical tasks, if these are growing and improving, and if the person’s accomplishments are a strong fit with the needs of the job. None of this type of assessment is possible by asking traditional behavioral interview questions.

Raise the talent bar rather than just eliminate mistakes.

It doesn’t take much insight to agree that past performance doing comparable work in comparable situations is a far better predictor of future success than using generic behaviors to make this assessment. More important, by using past performance you’ll not only be able to attract stronger talent but you’ll be able to hire those who find the new job both intrinsically motivating and career rewarding. This is a lot better than being satisfied avoiding hiring mistakes.

This Job Interviewing Process Will Prevent You From Hiring a JerkThe 1 Interview Question That Will Help You Avoid Hiring a Jerk

Digging deep into a candidate's track record of building and developing high performing diverse teams will avoid most managerial disasters. Conducting the due diligence is the first step.

A few years ago a twenty-something CEO asked me how to ensure a manager he was planning to hire wasn't a jerk as a team leader. Now some of my clients are also asking if this type of performance-based Interviewing and assessment technique could be used to identify potential sexual harassment (#metoo) problems.

The answer is likely yes, but let me go back to how I approached the "avoid hiring jerks" challenge to explain the interviewing technique. For this I suggested that during the interview have the candidate draw an organization chart for his last position and describe how each person was hired, how he ranked each person on a performance basis, how he was developing these people and if any were rehired from a previous company. Then ask the person how he got the current job - whether he was promoted, rehired by a former co-worker, or found the job on his own. If the answers are in-depth and meaningful, do this again for the person's previous one or two jobs.

I summarized by saying that the information gathered from this type of questioning will provide all of the insight needed to ensure the person is not a jerk, but more important, it will reveal if the person is a superior leader and manager. Raise a caution flag if the answers are vague or evasive.

I've successfully used this approach as a recruiter interviewing thousands of managers and placing hundreds. It's possible that a similar approach could be used to avoiding hiring those who might have some sexual harassment issues lurking somewhere in their histories.

By way of background, this technique is a variation of the Most Significant Accomplishmentquestion I've been advocating and teaching managers around the world how to use for the past 20-30 years. The idea behind this is to dig deeply into a candidate's major individual and team accomplishments and observe the trend of growth and impact over time. Then compare these accomplishments to the actual individual, team and management performance objectives for the open role to accurately assess the person for competency and fit.

Using the same process, I'd look for these clues to discern any potential #metoo or related gender bias issues:

  • Determine if the makeup of teams are representative of the gender mix of the talent population as a whole. I'd want to dig further if there was a big difference one way or the other.
  • See if the people hired and rehired and coached or mentored indicated some gender preference, and then relate this to the quality of the people hired. This discussion alone, whether it's superficial or insightful, will reveal a few clues as to the candidate's character and people biases. This is invaluable insight, irrespective of any potential harassment issues.
  • Find out if the person was rehired by a former boss or co-worker. I get concerned when a person has never been promoted internally or been rehired or recommended by a former boss or co-worker.
  • I also like to find out if the person was assigned to important project teams and why the person was assigned. The makeup of these teams on a gender, functional and management level basis offers great clues as to the quality of the person's team skills. As important is the success of these teams and what happened to the person as a result of being on these teams. Being asked to lead other important and successful cross-functional teams by those on the team, including women who were peers, supervisors and subordinates; would pretty much confirm the person is a strong and trusted manager.

From a practical standpoint all of this information is insightful in determining if the person is a strong manager and a person who proactively develops, coaches and mentors others. So the effort is invaluable on this dimension alone. However, if some level of overt and continuing bias was observed, this should raise a caution flag that something is amiss. But it would be a bit of a slippery slope to then suggest that some kind of harassment issues were at play.

It's important to note the Performance-based Interviewing approach recommended here involves gathering evidence to support a conclusion. The conclusion could be that the candidate is a strong or weak manager, a highly motivated person or not or someone who might or might not fit with the team. Emotions have little to do with this type of assessment.

Based on this concept, a person shouldn't be excluded from consideration for a managerial role without multiple examples of specific evidence determining the person is unfit. Suspicions don't count. More important, by using the evidence-gathering approach suggested, you'll discover if the person is a strong manager or not. And if not, the person shouldn't be hired. Not conducting the due diligence is when you might run into bigger problems than just harassment.

Sourcing Doesn’t End with a Great Name—That’s Only the Start of a Good Sourcer’s Work

Sourcing and recruiting may seem like two separate activities, but they’re not. If you’re not good at sourcing, you can’t be good at recruiting, and vice versa. Why? Because if sourcers can’t convince the strongest people they’re identifying as prospects to seriously consider their open jobs, then their effort is wasted.

In a “Small Batch, High Touch” process you only need 20-25 pre-selected passive candidates to make one great hire. Five or so of these should be great referrals and the other 20 cherry-picked direct sourced prospects who would naturally see your opening as a career move.

Cherry picking is an advanced recruiter skill despite the somewhat superficial name. For example, for a CEO search I looked for people who were division general managers at companies in the same industry who would quickly see that the job offered more rapid growth, more independence and a chance to demonstrate their leadership ability.

For an HR VP search in a remote area, I looked for HR directors at bigger companies within a 100 mile radius who would instantly see the job as a significant career jump and worthy of relocation. For sales reps for a fast-growing medical device manufacturer we looked for those in related industries but at companies that had seen their growth slow down.

The idea with cherry picking as a sourcing tactic is to look for people who would instantly see the opportunity as worth considering in a short tweet-like email, message or voicemail. However, the purpose of the message is to get the person to initially engage in a conversation to see if the job is as good as it seems. Once on the phone, persuading the cherry-picked prospect to become seriously interested in the opening takes strong recruiting skills. That’s why I contend that good sourcers need to be great recruiters. If not, you’ll lose all of these people for the wrong reasons.

You must offer a 30% increase to recruit the best talent

Early in my conversations with these pre-selected (aka, cherry-picked) prospects I mention that the only reason they should even consider changing jobs is for a minimum 30% increase. I then pause and let the idea sink in. Then I say with a big but, is that this increase is non-monetary. It consists of some job stretch - meaning a bigger job, a job with more impact, a job where the mix of work is more satisfying and, of course, one that offers faster growth for a longer period of time. I then say that this will take some time to determine but that I’d like to use the first call just to see if the possibility exists. I refer to this concept as the 30% Solution.

There are multiple purposes for presenting the conversation this way. The big one: It forces the person to consider a job change from a longer-term perspective, minimizing the chance that an offer that emphasizes a bigger compensation package will be accepted. The next big one: It allows the recruiter to engage in a more conversational career discussion rather than an impersonal box-checking exercise.

Obviously I could write a book about how to recruit and close strong talent but the point is that if sourcers can’t recruit, it doesn’t matter how good they are at sourcing. In this case, I contend that recruiters actually make better sourcers, since cherry picking doesn’t take advanced sourcing skills. A green belt in “Clever Boolean” is more than enough.

Most Companies Still Use Pre-Industrial Revolution Hiring Processes

I make the contention that if you can’t measure quality of hire, you can’t improve it. As far as I’m concerned that’s the reason quality of hire hasn’t improved in the past 100 years. In fact, I contend that hiring processes at most companies are based on pre-industrial revolution processes. That’s about 175 years ago. If some of you can't remember that far back it was a craftsman environment, everybody built things using their own tools and techniques, teaching was via apprenticeship and every product made was quite a bit different than the preceding one.

So if you have hiring managers who still ask their own pet questions; don’t provide real job specs but contend they’ll know the person when they see him/her; and/or eliminate good people for dumb reasons; and you have interviewers who use thumbs rather than evidence to evaluate people based on biases, needs and emotions; you can assume you’re using pre-industrial revolution concepts to find and hire people in the modern era. This is worsened if you don’t have enough strong recruiters and sourcers who can find and attract the best people to join your firm.

Now you might want to wrap this in AI, a brand new ATS with CRM capability, a nice candidate experience, and a sexy employer brand, but this only masks what’s happening below the hood.

As far as I’m concerned, until you have a complete end-to-end process (comparable to a sophisticated sales process) that actually attracts great people and gets them hired within budget on a consistent and predictable basis, you will stay stuck in the real olden days.

The solution requires measuring quality of hiring at every step in the funnel for feedback control purposes and then comparing how the predicted quality of hire maps to actual quality of hire.

In a process like this tracking the right metrics in real time is how you ensure the person hired is the best person, not just the one who made it through the gauntlet. This type of feedback loop will tell you when your process is out of kilter and allow for immediate corrective action. It’s this type of thinking and process control that has enabled every other non-HR business process move towards six sigma-like improvements in quality, efficiency and reliability in the past 40 years. Sadly HR has not even moved the needle. Collectively that’s why quality of hire hasn’t improved, job satisfaction is at a dismal 30% for the past 20 years and turnover is increasing.

When it comes to hiring, the tipping point in all of this is the need to measure and track quality of hire pre-hire. Without this benchmark, you’ll spend too much time on being more efficient rather than getting better. With this idea in mind, here’s how I’ve been measuring quality of hire on my last 1,000 search projects. (This video explains how to implement the process using the graphic shown.) It starts by asking the hiring manager if he/she would hire someone who met the following criteria:

  • The person has a track record of accomplishments comparable in scope, scale and size to what’s required to be successful in the new role.
  • There is clear evidence the person’s performance has consistently been in the top half of his/her peer group throughout the bulk of the person’s career.
  • The person has been assigned to participate and lead important teams similar in scope and makeup to the actual job requirements.
  • The person has the capacity and track record for solving comparable job-related problems and making complex business decisions likely to be faced on the job.

Just about 100% of hiring managers agree they’d not only meet a person who met this criteria but would also want to hire the person. With this agreement I then make the point that if a person is evaluated based on past performance doing comparable workand he/she has been successful based on the above criteria, the person obviously has the right mix of skills and experiences required. And in most cases this mix will be different than what’s written on the original job description. In fact, the best people will have less, and diverse candidates by definition will have a much different mix of skills and experiences. Getting agreement on this is a critical step in the process since it proves that traditional job descriptions are the cause of the problem, not the solution.

Competency is Not Enough. Job Fit is the Key to Better Hiring Decisions.

But measuring competency to do the actual work required is not enough to predict on-the-job performance. In addition, the person needs to find this work intrinsically motivating, the person’s style needs to mesh with the hiring manager’s and the person needs to fit with the company culture and environment. I call these the Fit Factors, and without a good fit on all of these measures the person will underperform.

With this foundation, all you need to do to measure and predict Quality of Hire pre-hire is to rank candidates on the 1-5 ranking scale shown. Then once the person is on board rank the person again on the same factors at 60-day intervals. Since each factor is in comparison to real job needs and the fit factors, any variances will be easy to spot and correct. This is the basis of a feedback process control system and as you’ll discover, is the critical first step in building a modern era business process for hiring top talent.