Wednesday, August 30, 2006

Sales Hiring Efficiency

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I've addressed the lack of hirable candidates before - but in different ways! Today, I introduce a new metric, Sales Hiring Efficiency. A client with chronically high turnover is frustrated that only 15% of their candidates are hirable when the normal rate is closer to 30%. Let's consider their history. Previous to utilizing OMG's Express Screens and STAR the company had the following hiring efficiency: Candidates - 100 Candidates deemed hirable - 100% (they thought everyone was hirable!) Candidates Interviewed - 100 Percentage of candidates hired - 20% Turnover - 90% Hiring Efficiency (Retained as a percentage of Interviews) - 2% After using OMG's Express Screens and STAR the company compiled the following hiring efficiency: Candidates - 100 Candidates recommended for hire - 15% Candidates Interviewed - 15 Percentage of candidates hired - 50% Turnover - 20% Hiring Efficiency (Retained as a percentage of Interviews) - 40% As you can see, the company improved its hiring efficiency 20 fold. Would more hirable candidates help? Sure. Are they heading in the wrong direction? Absolutely not! Which model would you rather be using? If you picked the first one, you must be a fan of inefficiency and getting little accomplished because you would be starting over with new candidates every single week.
(C) Copyright 2006 Objective Management Group, Inc.


At 8/31/2006 12:24:00 PM, Anonymous Dave Mantel said...


For those who like statistics, is this not a 200% increase in efficiency? ... or three times as effective.

The other telling stat is in sighting candidates the company previously deemed hirable at 100%. I'm assuming this means the company interviewed all 100 people... some several times. Via the STAR model, it seems there would have been 85 less candidates interviewed. If this was (and is) the case did your client give any indication of the ROI on just that by-product of the process alone?

... it must have been huge.

At 8/31/2006 05:54:00 PM, Anonymous Beverley Jones said...

One Queensland based client (we come from the land downunder) who has a hugely successful telecoms business in a regional beachside town has just tested 32 candidates with a 20% hireable rate using the STAR routine and Express Screen. After advertising in a prominent newspaper and on the web and getting an almost zero response he decided to fly to the nearest major city, stay overnight in a hotel and attend a major trade show to begin his own sourcing. 30 of the 32 candidates and all of the hireables came as a result of his efforts which cost him less than the advertisement.

The moral of the story is that it is his business and success is directly related to the effort he expends. We have not seen the same zeal from managers who are not owners

At 9/01/2006 04:06:00 PM, Anonymous JRDickens said...

I have one question. In the second scenario you mentioned there were 100 candidates, with 15 being deemed hirable. You then stated that 15 interviews were conducted with a 50% hire rate. Does this mean that 50 candidates were hired, including many of whom were not interviewed? I hope this is the case because it would be extremely difficult to hire 50% of 15 people.

At 9/11/2006 09:04:00 PM, Anonymous Anonymous said...

Thank you for putting this info together. I will use it with a client tomorrow! Very timely.

The clarity of the formula is very powerful -- when your hiring ratio
is higher, you realize how much money you saved in the hiring process and more importantly you appreciate the value of having a skilled ("right") person in the position to build the business.
I am working with a company now that is tracking their selection
results using the Profile in comparison to their previous performance over the last 10 years without the use of the Profile. I will share the results with you at year end -- should be solid information for an article -- would like to track the performance of "hires" over two year period.

Dr. Barbara Keaton
Keaton Resources
President & Senior Consultant
307 Fourth Avenue
Bank Tower, Suite 1100
Pittsburgh, PA 15222
Land Phone: 724.693.8427
Cellular Phone: 412.736.3255
>Fax: 724.693.8428


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