So I've given a bunch of ideas about what makes for an effective hiring processes, identifying criteria, evaluating candidates rigorously, and then kind of integrating the information by kind of summing up schools. It's nice in theory, does anybody really do this? Yeah, yes, they do. So one nice example from the world of retail is foot locker. So foot locker went through an exercise a number of years ago to figure out how do we make sure we're hiring the right people? So they tried to figure out what are the characteristics that make somebody successful here. They came up with two. So it turned out for them, they thought a disposition towards selling like somebody was really focused on driving sales that was important and fit with the culture. And so they organize their recruiting around that. So what they did was they developed instead of online tests to try and evaluate people along these two criteria. Right? So what can we, what questions can we have them answer that will tell us something about the disposition towards sales? How can those questions help us understand their fit with the culture and what they did which was very neat? They went back to the people who are currently working there and gave them those questions so they could fine tune figure out which of these questions, doing a good job of figuring out who's a high performer and which of them are. And then what they were able to do is look at when people apply, who answers these questions in the way that our high performers do and they use that to help them make their hiring decisions. They say according to an article by Marshall Fisher, they say that this really helped them higher, better that those people who they hired after they made this change in their hiring process not only provided better sales, so perform better, but even stayed longer than people who had hired using their old practices. Another very similar example that I'm familiar with comes from a set of customer service roles. And so this from an organization was trying to exactly this how do we improve customer services or how do we improve the hiring? So it turns out in these customer service roles one thing that matters a lot of attrition. So often customer service roles, we have a lot of attrition. People often leave and then kind of three or four months and yet in order to be effective in doing customer services, you really need to understand the products. And so they find people will be going through, you know, a month, six weeks of training before they start interacting with customers and then they leave within three months, right? And so you've lost your investment. So a big part of hiring is not just understanding who's going to perform well, but also who's going to stay. So in order to try and improve their performance on this, they did something like foot look at. And so they created a suite of online tests, you know, asking some of the kinds of questions that we talked about before. This kind of scenario questions trying to assess technical skills, cognitive skills and understand just to fit with the job. And again, what they did was they looked at people currently in the job. They looked at people applying and try to predict who was going to do well in the job based on resembling kind of high performers people who stayed there longer. Turns out in this case it seemed to be somewhat easier to predict who was going to stay, then who was going to perform well, but certainly found that these screens did a very good job there and so they would take the screen. So if you apply go online, you fill out this test, kind of answer all the questions and then it gives you a score, and that score goes the hiring manager. So it doesn't actually say you can't hire this person, what it does, it gives the hiring manager a red, yellow, green set of recommendations. So red, I would not hire this person if I was you. Yellow, there are a couple of concerns but they're probably, ok green, this person explain then the hiring manager makes their final decision based on this. So one question, do people pay attention to these? They seem to. So hiring managers often did take the recommendations seriously. And so there's a nice study by things Mitch Hoffman, Daniel Lee, and Lisa Con that looked at the effectiveness. I found that after this process was implemented, attrition went down, people are more likely to stay. So I show on this graph, got a little lime down in the middle of the chart where this was implemented. You see after that the line sloped upwards, right? People were more likely to stay for longer. People stayed in more months. There are more k to survive 3 months, 6 months, 12 months or so that seem to be doing a very good job of predicting who will stay better than the previous process, which relied much more on human judgment. One thing that I found really intriguing about this particular set up is the way that it's a recommendation, right? And so we don't know whether or not the hiring managers will take it and that provides a neat test, right? Which is sometimes a hiring managers will ignore it. So hiring managers using their judgment coming to one conclusion computer using its judgment coming to a different conclusion which one is going to actually seem to demonstrate the better judgment? What do you think? You probably guessed it successfully. So I mean I've just spent 20 minutes of my life and more importantly your lives wittering on about how really structured process is important to hiring effectively. It's unlikely I'm going to turn around and say, yeah but actually it turns out it doesn't matter as long as the hiring manager does what they want your fine. No you're right. In this case when the hiring manager follow the recommendation, they did better when they ignored it. So what they did was they looked at basically if managers made an exception so either they hired somebody who had a red rating even though there was somebody who was yellow or green available, or they hired somebody who had a yellow rating even if there was someone green available. The more frequently that a manager did this, the lower the retention in their establishment, right? And so the more that people followed the structure process and actually took the advice based on kind of evaluating this criteria, the more successful they were on hiring people who would stay of this organization. So we keep coming back again and again. Hiring is important but to do it right, you really want to follow a structured, rigorous process rather than just relying on human judgment.
