hiring hacks: the roi of making the right hires
TRANSCRIPT
Lou Adler CEO and Creator of Performance-based Hiring
Author – Hire With Your Head, The Essential Guide for Hiring & Getting Hired The Adler Group, Inc. – Performancebasedhiring.com
Performance-based HiringThe “Less is More” Secret to Measuring ROI
and Improving Quality of Hire
Quick Assessment of Your Talent Programs
Does the quality of the people you attract represent the best in the field?
Is the quality of the people you attract better, worse or the same as the people currently in your company?
Are you hiring the best people you attract?
This is the promise and potential of Performance-based Hiring
A
Total Talent Market
Top 25%
Attract &
Apply
Integrated Business Process for Hiring Top TalentThe Recruiting – Hiring Manager Partnership
Performance-based Job DescriptionsGreat Career Moves vs. Lateral Transfers
Talent Centric SourcingTarget Best People – 40/40/20 Sourcing
2-Question Performance-based Interview Evidence-based – Assess, Defend and Recruit
Integrated Recruiting “30% Solution” – Career Growth vs. Compensation Max
Performance-based Hiring
Calculating the ROI of Improve Quality of Hire
Three costs: cost of hiring, total compensation and opportunity costs. How Many People Will You Be Hiring in the Next 12 months?• Example: 100 people at $100 thousand is $10 million in salary costs• Cost per hire @ $5 thousand each is $500 thousand • $600K revenue per employee is $60 million in sales• At 40% variable margin this is $24 million in profit• What’s the investment needed to increase profit by 20%?
Calculating the ROI of Improving Quality of Hire
• 100 new hires @ $600K/person = $60mm revenue at 40% profit is $24mm
• Upper 25-30% is at least 20% better $4.8 million/year in incremental profit EVERY YEAR or about $20 million over four years
• If cost per hire increases by $5K, total added cost is $500K – ONE TIME!• The ROI exceeds 1,000%!
budurl.com/ROIcalcform
Under/Unemployed - Ac-tive
Employed - Active Employed - Tiptoer Employed - Passive
40% 40%
22%
8%
47%42%
60% 62%
3%8%
13%
23%
10% 10%5% 7%
Apply Networking Internal Other
How People Get Jobs – 2015 & 2016Total Talent Market
5–20% All Active Candidates 15–20% 60-75%
Two Talent Markets
Maintain Talent LevelSurplus Strategy
Raise Talent LevelScarcity Strategy
Find-Apply-Weed Out Attract and Nurture
Skills & Experience Qualified Performance Qualified
Ill-defined Lateral Jobs 30% Career Moves
Cost and Efficiency ROI and Quality of Hire
ActivePostingsFollowers10-20%
PassiveReferrals
NetworkingBoolean80-90%
Transactional Recruiting Consultative Recruiting
What do the best people do differently?
1
Consistentlyexceed expectations!
3Leadership:
Vision plus execution
4Good problem solving &
thinking skills
6Get it done– no excuses!
Coaches, manages, develops self/others
2
Flexible, deals with change, manager, culture
5
Define Job Before Defining Person
Primary or Fixed
Variable
The Difference Maker
It’s what you DO with what you HAVE, not what
you HAVE that counts!
The 40/40/20 Plan for Building the “A” Team
Find A-level talent that’s a little light for the position job is clearly a career move.
Recruit these people and get referrals from those “not perfect.”
Find high quality “nodes” to get more referrals.
Criteria to Engage Criteria to Accept
Consultative Recruiting – Warm-up for Needs Analysis
Recruiting & Hiring Passive Candidates
Great Jobs + Engaged HMs + Strong Recruiters
TitleCompanyCompensationLocationJob
30% Plus Career OpportunityJob and ImpactHiring ManagerTeamCompensationWork / Life BalanceCompany, Culture, Mission
Day 1 Year 1 and Beyond!
ActiveExpand Pool
10-20%
PassiveNarrow the Pool to the Top 25%
80-90%
30% Solution – Consultative Recruiting – Warm-up for Needs Analysis
Recruiting & Hiring Passive Candidates
Recruiting Rule #1
Sell the drive not
the destination!
NO NO NO Maybe NO Maybe YES YES YES YES
The ROI of Hiring the A-Team > 1000%
budurl.com/ROIcalcform
Q & A
[email protected]/ROIcalcform
Next StepsAudit a ClassBecome Performance-based Hiring Certified