Hire Faster: Three Steps To Hiring Efficiency

It is worth defining “efficiency” before we go deeper with our topic. By hiring efficiency, we mean to hire the right person using a shorter period. It does not help to increase the speed of hiring only to find out later we didn’t find the right fit.

Borrowing from a sales concept, we can examine the three stages of hiring for opportunities to enhance efficiency. The three stages are: top of the funnel (TOFU), middle of the funnel (MOFU) and bottom of the funnel (BOFU)

Improve Top of the Funnel (TOFU) Efficiency

Identify the right platform to attract candidates: It is easy to purchase software that pushes your job description to fifteen hiring websites. However, without careful selection and control, you might end up receiving many applications with a low fit. It is time-consuming to sort through applications to identify the candidates for follow-up interviews. Therefore, it’s important to identify the right hiring platform. For example, StackOverflow.com might be a good place for hiring software engineers since you can see a history of the candidates’ Q&A on the platform, whereas LinkedIn.com can help you target your job descriptions to candidates based on very precise past experience.

Improve Middle of the Funnel (MOFU) Efficiency

Screening and interviewing are the typical actions within this step. A useful way to increase screening efficiency is to have a clear set of assessment criteria and apply these criteria uniformly to all candidates. There are two important steps here: setting up a hiring profile and screening based on that hiring profile. The first step requires years of expertise and deep understanding of the job function to know what qualities to look for in a candidate. It can be a time-consuming process but it is important and worth the time commitment. As for the second step, performing the screening, software tools can be used to apply the rules systematically across candidates and greatly increase hiring efficiency. Examples of such software include Koru and IBM Kenexa.

Lastly, Improve Bottom of the Funnel (BOFU) Efficiency

Many things can be done regarding this last step. If the candidate advance through all rounds of interviews, what stands between the candidate and a job offer is the reference checks. Reference checks were historically conducted by speaking with former managers of the candidate and make sure there are no last-step red flags. However, as a recent article by Harvard Business Review pointed out, reference checks should not only be conducted with the former bosses but also with former coworkers, because former coworkers usually have a better picture of the candidate’s personality and team-working capabilities.

Conclusion

Remember, efficiency is about speed but also about hiring the right person for the job. By taking all three stages of the funnel into consideration, you should have a clearer picture of where in these steps your organization’s hiring processes can be improved. After all, hiring is a dynamic process. Only those who constantly scan their existing processes to look for improvement can stay ahead of the game – especially in a labor market where demand for top talent greatly exceeds supply.

4 Tips to Reduce Unconscious Bias in Hiring

Diversity in the workplace has become one of the biggest issues faced by companies today, particularly within the Tech industry. Interviewer’s bias in hiring stands out as a potential culprit. As has been shared multiple times before, the way hiring is done today is prone to bias. Research has shown we typically make up our mind in the first 4 minutes of an interview and spend the next 50 minutes confirming our 4-minute snap judgment. What we end up hiring is a “mini-me,” people who remind us of ourselves.

A diverse workforce is believed to have multiple benefits, including improved company performance, candidate attraction and employee engagement. The explanation is that a more diverse group encompasses more experiences and perspectives on how to run a business and serve a wide variety of customer needs. Companies with diverse workforces are more likely to attract candidates and are perceived to be better at building psychological safety for employees to share, innovate and collaborate. Multiple studies are now linking quantitative data to these benefits.

The question facing many executives today is how to improve diversity in the workplace. It should start at the top of the funnel – diversity hiring. The goal of diversity hiring is to identify and remove potential biases in sourcing, screening and shortlisting candidates that may ignore, turn off or accidentally discriminate against qualified candidates.

4 Tips to Avoid Unconscious Biases in Hiring:

  1. Analyze your diversity hiring data and understand potential bottlenecks. You need to have a clear understanding of your strength and challenges in candidate diversity throughout the funnel before deciding on moves.
  2. Standardize your criteria for screening based on competency. Many of the criteria used in current screening, such as candidates’ education background, prior employer or personal connection, limit candidates to those who are alike current employees. There are a couple of tools you can use to set better screening criteria:
    • Pre-hire assessment – the candidate scores won’t differ significantly for minority groups in a well-validated assessment.
    • Blind hiring – removing personal information about a candidate from the recruiters that can lead to unconscious bias about the candidate.
  3. Intelligent shortlisting your candidates. There are existing shortlisting software tools such as Koru and Restless Bandit that learn about existing employees’ experience, skills, and other criteria, and objectively and consistently applies this criteria across all candidates, which reduces problems related to unconscious biases and accidental discrimination.
  4. Evaluate your diversity hiring metrics. Set a diversity hiring goal to evaluate whether the techniques applied above are effective and re-iterate your process.

The Cost Of A Bad Hire Is Over A Quarter Million Dollars

To calculate the cost of bad hire (or the cost of good new hire), conventional wisdom says it is roughly $4,000 — this according to a 2016 survey by SHRM. This figure is consistent with Bersin by Deloitte’s 2014 data that looked at cost-per-hire across five industries, ranging from Healthcare ($3,033) to Manufacturing ($5,611). While these numbers have been steadily increasing, it’s easy for managers to see this simply as a “cost of doing business” as they build and optimize their teams. The reality is just the opposite. The true cost of bad hires is much higher – especially in sales.

The full cost of a bad hire for insides sales roles is in fact $400,000. $400,000? How is that possible? Well, it’s a factor of two things:

  • How much time, money, and effort do you pour into that mis-hire before either you or he/she realizes you have irreconcilable differences and finally calls it quits?
  • What is the difference in quota production between a top 20% producer and a bottom 20% producer?

Mis-hires cost more than just the recruiting team’s effort and the costs of interviewer time. Instead, the costs include new hire training, paying their salary for 3 to 6 months while you figure out if they’re going to make it, huge investments in coaching and remediation from your best managers, and – sometimes – severance costs. SHRM, LinkedIn, and others have run various calculations to estimate these costs and they range between 50% of annual compensation for hourly workers to 300% of annual compensation for senior executives. Payscale quotes 150% for line staff. Assuming annual compensation of $100,000, then the downside cost of a mis-hire is $150,000.

But what about quota? Top producers regularly achieve 150% of quota while bottom performers typically deliver only 50% of quota. So, not only are you carrying the training, salary, and other costs of a bad hire, you’re also missing out on the opportunity cost of a top or even an average performer. For a team with a $500,000 quota this means each low performer delivers $250,000 less than an average performer (and $500,000 less than a top performer).

Therefore, the true cost of a bad hire for inside sales roles is $150,000 in wasted costs and $250,000 in lower revenue. Together, that’s $400,000 – a full 100x higher than SHRM’s cost-per-hire figure of $4,000.


Calculating the Cost of a Bad Hire in Sales

Does this calculation make you feel a little sick to your stomach? It should. The good news is that knowledge is power. Knowing the real cost of a bad hire should make it clear that the best way to hit your revenue goal is to hire smarter. So, how do you hire smarter?
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    • Develop a profile of what drives success on your team. The combination of previous experience, skills, and behaviors will vary based on size of your team, maturity of your product, type of customer, and complexity of sales. Use data, not intuition, wherever possible. There are companies, like Koru and others that can help do this in a validated, reliable way.
    • Measure and capture the most important information on candidates and feed it into your screening and selection process. Gather this information as early in the hiring process as possible and make sure your recruiters and hiring managers know how to use it. You’ll likely need your current or new technology to do this seamlessly and not add more work to your team’s already full plates.
    • Track hiring and performance over time to improve your top performer profile. Your profile will likely evolve over time so make sure to check the data at least once a year to see if your profile needs a tune-up.

The costs of bad hires are holding back your sales teams. Use this analysis to build a business case for investing in smarter hiring. Replace one bad $400,000 hire with a great hire and you’ll have paid for your efforts many times over.

Your Secret Weapon in Campus Recruiting

Applications from your non-target colleges are your secret weapon for quality and diversity in this upcoming campus recruiting season. Increasingly, employers are recognizing that their college recruiting strategy is the definition of insanity – doing the same thing over and over and expecting different results.

Does the quality and diversity of your recruiting class depend on a handful of career fairs, information sessions, and resume drops? The idea that all the best-fit talent for your organization is graduating from your six to twelve target colleges is pretty absurd. Many campus recruiting teams are tapping a resource that’s hidden in plain view – applicants from non-target colleges.

“Our BHAG (Big Hairy Audacious Goal) is to never go to campus again.” That’s LinkedIn’s vision according to Tey Scott, Head of Campus Recruiting. They’ve pursued regional skill-building events dubbed “Accelerate U” and targeted participants through the LinkedIn platform. They reduced their traditional on-campus presence by 73 percent – and seen their diversity hiring increase 23 percent.

Google analyzed their best fit hires and concluded they’d rather have a great hire from an average college than an average hire from a great college. They shared in a recent conference presentation that they’re now expanding their campus recruiting presence (in-person and virtual) to 1,000 campuses worldwide.

Several other major employers have successfully tapped into unexpected talent sources according to this analysis of 286,000 resumes of tech sector workers. For instance, the most common college among Cisco’s technical hires is San Jose State University. At Hewlett-Packard, the top college is Colorado State University.

It’s easier than ever for your campus recruiting efforts to cast a wider net to more schools with little to no additional costs. Handshake reaches 350 campuses with a single posting. LinkedIn now has over 52 million college students and early career professionals on their network – up from 5 million in 2011.

Casting a wider net sounds promising, but doesn’t it just compound the problem that we already receive too many applications to thoroughly review and consider? For instance, most corporate job postings receive 250 or more applications with top brand employers regularly receiving tens of thousands of applications from college students annually. To cast a wider net, we also need sharper tools.

Today, most large employers screen down their applicant pool based on where they went to college, their GPA, their major, or the keywords on their resume. In the process, they screen out innumerable potential top performers as well as a lot of diversity. As Google found, “GPA’s are worthless as a hiring criteria… we found that they don’t predict anything.” We have to move beyond the mostly arbitrary signals to objective ones that are both predictive of future success and not biased against candidates from diverse backgrounds.

At Koru, we help our partners “screen in” best-fit applicants they otherwise would have missed using more predictive signals. Specifically, we measure the Koru7 Impact Skills – Grit, Rigor, Impact, Teamwork, Curiosity, Ownership, and Polish – and match the pattern of applicants’ strengths to the pattern of successful hires from the past. Companies can quickly identify the best-fit candidates based on our “Fit Score” and accelerate them into the interview process.

Our benchmark data shows that non-target school candidates with high Fit Scores are over three times as likely to receive offers as candidates with low Fit Scores. Would you like to know which candidates are three times more likely than others to be a good fit at your company?

Armed with sharper tools, our partners can tap into high potential (and often diverse) talent that already exists in their non-target college pipeline and even broaden their outreach with confidence. Time is short until this college recruiting season heats up – will you be one of the companies that deploys this secret weapon or will you keep fighting over the average candidates at your target schools?

How to Use Data to Make Better Hires – Predictive Hiring 101

Is predictive analytics for hiring simply a buzz word or is there evident of its impact? Now, though, we have emerging evidence that people analytics can successfully be applied to improve hiring. This new category of people analytics is known as predictive hiring – and if you haven’t invested in predictive hiring you’ve already fallen behind.

What is predictive hiring?

Predictive analytics for hiring uses modern data and assessment science to project candidates’ future success based on patterns among current employees. Instead of traditional hiring, which relies on six second resume screens and intuition-based interviews, predictive hiring relies on richer sets of data and smart algorithms to recommend best fit candidates to recruiters and hiring managers. In the same way that your Netflix recommendation feed surfaces movies that you are more likely to like, predictive hiring surfaces candidates who are more likely to be a good fit. When it’s done well, predictive hiring allows you to focus energy on best-fit candidates, drive business outcomes with data, and engage candidates with authentic experiences. Several important learnings are beginning to emerge in the transition from traditional hiring to predictive analytics for hiring:

1. Obvious (and often misleading) resume information doesn’t help hire the best people for the job.

Google was famous for collecting all the possible measurable data and test scores they could. When they analyzed actual job performance, they found that “GPAs are worthless as a criteria for hiring… we found that they don’t predict anything,” according to Laszlo Bock, their former SVP of People Operations. Instead, “We care a lot about soft skills – leadership, humility, collaboration, adaptability and loving to learn and re-learn.” Advances in predictive hiring are increasingly able to measure these more important fundamental skills, rather than relying on the minimally predictive resume data.

2. Cast a wider net to surface best-fit candidates.

Gone are the days of posting on one or two job boards or recruiting at half a dozen “target colleges.” Industry leaders have created objective, data-driven hiring profiles, allowing them to target and surface high-fit candidates that their competition never sees. An extreme example is LinkedIn’s campus recruiting team. Tey Scott, Director of Global Talent Acquisition, said the goal is to never go to a campus again: “We’ve moved from schools to skills.” As organizations cast a wider net in search of high-fit and diverse talent, they will need ever sharper tools to identify the best candidates.

3. Hiring profiles are unique for every company, even for similar jobs.

Many early analytic initiatives attempted to group similar job titles across organizations. At Koru, we’ve found that the predictors for the same job title vary significantly by company.

How to get started

Predictive hiring can feel out of reach for many organizations. It doesn’t have to be. There are multiple ways to get started while limiting your investment and risk. Lock in some quick wins before expanding your efforts. Start with a very clear and discrete project – usually one or two roles that are high volume and high value to your organization. Pull in someone from your HR analytics team, if you have one, and consider contracting with an outside expert who’s done this before.

  • Step 1: Focus on the the business outcome(s) that you’re solving. It’s critical to start with the end in mind and what improvement will make a meaningful difference to your business. Is it performance? Retention? Efficiencies? Diversity? As the saying goes, if you don’t know where you’re going, any path will take you there.
  • Step 2: Collect data that could be predictive. Start with your hypotheses and cast a net from there. Don’t fall victim to the trap of “throw all the data in and the algorithms will find magical patterns.” Rarely does that ever happen. Start with the data you already have that you believe carries signal and/or signal-rich data that you can quickly capture.
  • Step 3: Run the analysis to test your hypotheses. You can run a regression or correlation in Excel, but this where that internal or external analytics help comes in handy. They may use a basic regression to pick up on strong patterns or signals that exist. More complex machine learning algorithms will be required to boost weak signals and to get smarter over time.
  • Step 4: Put data in hands of decision-makers. You must make your findings actionable to capture any value. Otherwise, it’s just a research project. Your decision makers (e.g., recruiters, hiring managers, executives) will also give your findings an important face validity test.
  • Step 5: Iterate, iterate, iterate. Predictive hiring is not a “set it and forget it” proposition. It’s a process. You will learn, you will accumulate more data, your algorithms will get more accurate, and your end users will better understand how to drive decisions with your insights.

The only competitive advantage in the 21st century is your people. If you’re already beginning to implement predictive hiring, congratulations, keep going. If you haven’t, the future is now. As the Chinese proverb says, “The best time to plant a tree was 20 years ago. The second best time is now.”Originally published on TLNT

Get Your Team in Shape – Hiring & Recruiting is the #2 Challenge For Inside Sales Leaders.

It shouldn’t come as a surprise to anyone reading this post, but hiring successful inside sales teams is becoming far more difficult than it used to be. I should know; as the VP of Customer Engagement at Koru, and as me dad would say “I’m right in the thick of it”. In April, I had the opportunity to attend the American Association of Inside Sales Professionals (AA-ISP) Leadership Summit in Chicago (which was brilliant btw!). I sat in on the hiring and recruiting Idea Exchange where a panel of pros (including Kristen Hamilton, CEO of Koru) discussed new and innovative ideas about finding and hiring great talent. AA-ISP research indicates that recruiting and hiring is the #2 challenge facing inside sales leaders. As the demand for inside sales roles continues to grow, the pressure to fill seats only gets greater. A top-performing sales person can regularly produce 200-300% of quota. But, a mis-hire distracts the organization, rarely makes quota, and is usually gone in a matter of months. And that bad hire, depending on their level, will cost between 100-300% of their salary to replace. So, it’s obviously important that you get it right the first time.

“A top-performing sales person can produce 200-300%. A bad hire, can cost up to 300% of their salary to replace.”

If you ask sales leaders, what do they look for in a rep, would you get the same response associated with what drives success in their organization? Or would you get several different ideas of what that might be? What about the characteristics associated with those that stay longer and have more impact over the long term? Or those that close deals that grow and become better clients for your business? Or maybe those that are great at opening up new markets, are you considering these unique situations in your hiring? My guess is probably not, it’s not easy to do this!

Then consider the big question, where are you looking when it comes to hiring top performers?

Are you only interviewing candidates who have prior sales experience, a bachelor’s degree, and a high GPA – or worse, if you’re just using a staffing agency to choose candidates for you, did you link all these sources or features to performance? retention?– you could be missing out on some amazing opportunities for great hires.

Get the answers here

We partnered with AA-ISP to create the 2017 Inside Sales Hiring Benchmark Report. This joint research study analyzes the skills that are most relevant for Inside Sales in today’s innovation economy.