Why Performance-based Hiring Builds a Lean Team, as told by Lou Adler

October 11, 2016 at 12:30 PM Kathleen de Lara

TA-webinar-blog.pngLou Adler joins Hiring On All Cylinders to share a sneak peek of his webinar later this week. Best known for his Performance-based Hiring methodology, Lou emphasizes the importance of recruiters seeking out growth in candidates' career trajectories, not just the right skills or experiences. This helps talent teams identify the best performers driven by challenges, the opportunity to evolve their skill sets and develop with their org in the long run. In this episode, Lou breaks down the performance-based hiring model, and why orgs too often focus on the wrong metrics to track good fit candidates.

Tune in below to hear more on:

  • The common disillusion and shortcomings of hiring candidates who appear qualified on paper and get along with interviewers
  • How talent teams can modify their sourcing, interviewing, and recruiting processes to shorten their time-to-hire, and pitch and close only qualified people
  • Tactics for building a small-batch candidate funnel that improves conversion rates

We also spent some time with Lou to learn his outlook on the state of recruiting, how talent teams can continually adapt their data-driven hiring strategy, and why candidate quality will always overrule quantity. 

What's wrong with how the talent acquisition industry views being "data-driven" today?

When you don’t grow up with using data as a means to drive process efficiency and improvement, you don’t fully appreciate its power. This to me is a core problem with HR and TA. In these cases there’s too much emphasis on historical reporting – figuring out what happened after it happened. Instead, I contend that in order to hit a target you first need to measure it, then develop a process to achieve it, and then track progress along the way. Whenever the process goes out of whack it then needs to be adjusted in real time (daily or weekly) to get back on course.

What metrics aren't people paying enough attention to?

From my perspective the best real time metrics are those that track quality of hire at every step in the recruiting funnel from top to bottom. The most important are measuring quality of hire during the intake meeting as a series of performance objectives and tracking how many of these strong people at the top of the funnel actually get hired. The big tracking metrics include how many great people respond to your messaging, how many are converted into prospects, how many strong referrals are generated along the way, and how many hot prospects get interviewed and hired.

How do these metrics play a role in the gap between hirable people and companies that are hiring?

In my opinion too many companies spend too much time posting jobs and sending out emails and hoping a good person responds. I considered being more efficient doing this a waste of time. Instead I’d rather identify 20-30 strong people and work like heck in recruiting them. This demonstrates the right way and the wrong way to use metrics. Being more efficient doing the wrong thing, like improving time to fill or reducing cost per hire, is a misuse of metrics. Getting better at doing the right thing like improving quality of hire is how metrics should be used. Surprisingly, in the process of improving quality of hire, companies will also be able to reduce costs and improve time to fill. 

At which stage(s) are most orgs losing candidates?

It’s clear that too many recruiters don’t understand the skills needed to engage passive candidates in career discussions and then converting these passive candidates into interested prospects. As important is maximizing the response rate of direct sourced passive candidates to your emails and voice mails. Both steps are essential in moving strong people who have been properly identified into viable prospects.

What is performance-based hiring and how is it different and more efficient than traditional hiring?

The keys to Performance-based Hiring’s success are two-fold. First, quality of hire is quantified during the hiring manager intake meeting as a series of measurable performance objectives not a laundry list of skills and experiences. Second, it’s a fully integrated and complete business process for moving top talent from the top of the funnel through every phase of sourcing, interviewing and recruiting. Surprisingly, when people fully understand Performance-based Hiring they realize it mimics how people are evaluated internally and transferred and promoted into new jobs. It’s based on their past performance doing comparable work. Traditional hiring uses a fundamentally different approach by overvaluing skills and experience rather than past performance and future potential.

Can you share more on the importance of small batch recruiting?

As mentioned earlier, by pre-selecting (aka “cherry picking”) a small group of top people who would see the open job as a career move, you only need 20-25 people at the top of the funnel to make one great hire. The mix of these people should be 6-8 highly referred candidates and 15-20 direct sourced candidates. Since your dealing with such a “small batch” of prospects, maximizing the conversion rate at each step in the funnel is essential. That’s why using process control metrics is so important. Success requires fully engaged hiring managers and excellent recruiters working in partnership. By spending more time with fewer candidates not only can quality of hire increase, but you can also lower cost per hire and time to fill.

What types of TA roles should join us for our webinar and what lessons will they leave with? 

Anyone who recruits, manages recruiters or wants to increase quality of hire would find great value in the webinar. The key though is rethinking the hiring process from beginning to end, not just improving what you’re already doing.

Recommended articles:

Creating Scalable and Equitable Interview Processes with Twitch’s Arthur Yamamoto
How to Champion and Win Over Candidates, with Hired’s Matt Hughes
What Recruiters Can Learn From Lifecycle Marketing

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