12 June 2012

Gut feeling, evidence and the Moneyball effect: Lessons from ATC 2012

The impact of a conference speaker at the modern day recruitment conference can be quickly gauged by a few tell-tale signs. The high impact speaker will generate a flurry of tweets comprising, invariably, positive feedback from the listener, quotes from the said speaker and then agreement, debate and retweets from others following the conference twitter feed, either in the room or elsewhere on the planet. 

On this basis the undoubted star of the Australian Talent Conference 2012 was Randstad’s VP of Global Sourcing and Talent Strategy, Glen Cathey. 

I saw and met Glen (a resident of Atlanta, Georgia) at the ATC Sourcevent last year and I immediately loved his way of thinking about recruitment, which was one of an efficient, technology-enabled scientific process. 

Glen’s ATC 2012 presentation, The Moneyball approach to recruitment: Big Data = Big Changes was the sort of high quality, cutting edge, presentation that has me returning to the ATC each year. 

When I read Michael Lewis’s Moneyball (the source material for the Brad Pitt movie of the same name) in January 2011, I loved it and said (in Ross Recommends, InSight 164). 

‘Disguised as a book about baseball this is actually a brilliant book on recruitment. It reinforces the mantra that it doesn't matter how a candidate (player) looks or what their academic record/alumnus (pedigree) is, what really matters, in making a judgement about their suitability, is knowing the player's past performance in the key result areas that contribute the most to winning a game.’ 

Glen took this theme and drilled down into it with a number of engaging and surprising examples. For greater detail and other views on Glen’s presentation and accompanying themes, I recommend you read the blog posts by ATC attendees Jared Woods and Dan Nuroo as well as an article by Fiona Smith published in the Australian Financial Review last week. 

Glen’s presentation reinforced much of my own thinking, training and writing on this topic, summarised as follows: 

Recruitment in the twentieth century was overwhelmingly about emotion, about ‘gut feel’, about decision making founded in nothing more than good old fashioned person-to-person chemistry and evidence-free, opinion-based decision making. 

This was consistently demonstrated by unstructured interviews that were nothing more than a convivial chat, job descriptions that were mostly written by the incumbent employee, soft-as-butter-in-the-sun reference checks and pre-hire testing or assessments being the exception, not the norm. 

This ad-hoc approach to recruitment was generally accepted because: 
  1. The differential between an average performer and a top performer wasn’t believed to be very big (relative pay levels would suggest this was true).
  2. Skilled people, of almost any sort, were relatively easy to find and hire.
  3. The skill and motivation of a company’s employees was not regarded as a key differential between competing businesses.
  4. The speed of change in the economy and within industries was slow, consequently it wasn’t very costly (financially or reputation-wise) to make hiring mistakes. 
The unprecedented rise of Google and the astonishing rebirth of Apple have proven to be the two most significant events in corporate leaders truly understanding the difference that highly skilled and culturally-matched employees can make to a company’s bottom line. Hence the importance of a robust, consistent and ever-improving recruitment process to hire these types of employees on a fast, consistent and reliable basis. 

The only way a recruitment process can be robust, consistent and ever-improving is through using data and science, the opposite of the way recruitment has traditionally been conducted since the Industrial Revolution. 

The science of recruitment involves:
  1. Completing an accurate competencies-and-motivation-for-the-job match (see Hiring Mistakes Part 1: The fallacy of previous experience)
  2. Using Boolean search techniques and other proactive sourcing strategies to identify and activate suitable candidates.
  3. Using objective, evidence-based tools and techniques to screen, assess and rank the identified core competencies and key motivation in each candidate (see Recruiters perplexed: Elite performer is short, has a beer gut and is 51 years old).
  4. Using the above steps for every candidate and for every job (see How hiring mistakes are made).
  5. Having an individualised and compelling way to pitch the job and the organisation to every potential employee.
As prominent US industrial psychologist, Dr Charles Handler said in his fabulous article Analytics and Technology Have Led Us to the Doorstep of Assessment’s “Golden Era” (I highly recommend you read the whole article) on ERE.net last week: 

'The coming decades will be all about the ability to use data and technology to gain incredible new levels of insight around people and their relation to the workplace — and to use this insight to realize new levels of efficiency and effectiveness.' 

Unless recruitment agencies take steps now to understand how these rapidly evolving developments in data and technology are changing the recruitment game, then their twentieth century business model, based on a reactive and evidence-free recruitment process, is doomed to irrelevance sooner rather than later. 

This coming wave is not about making recruitment more impersonal or robotic, it’s about recruiters using the incredible power of science and data to place more people, more frequently and quickly, into jobs well matched to their capabilities and aspirations. 

And isn’t this the purpose and core competency of any recruiter? 

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