AI is taking the recruiting world by storm — largely because it accelerates the hiring process. Yet there is so much more to this story than speed.
Operational efficiency matters. I get that. But at what cost? Of course, it makes sense to move swiftly and decisively. After all, in the business world, time is money. And now all sorts of innovative AI-driven tech makes it possible to do some wildly impressive recruiting gymnastics.
Still, I can’t help wondering if this emphasis on urgency is causing employers to de-emphasize something even more important — quality. In other words, are outcomes improving? I’m not so sure.
Is Faster Really Better?
These days, thanks to the prevalence of digital recruitment tools, employers are awash in recruiting performance metrics. Some performance measures reflect a strategic perspective. Yet all too often, we lead only with speed.
Time to fill — time to hire — time in process. These classic metrics can be useful in measuring recruiting performance. Don’t get me wrong. Speed counts, especially when so many companies are struggling to hire the best and the brightest in a competitive market. (When was the last time you lost a top candidate to a company that sealed the deal in record time? That always stings.)
But here’s the rub. If you’re always focusing on speed, you could easily miss the bigger workforce picture. And these days, that picture isn’t likely to be pretty. For example:
- According to Gallup, U.S. employee engagement has consistently remained at 30-35% over the past decade, while disengagement has slowly risen since 2019 to its current level of 16%.
- Employee dissatisfaction remains high, with 60% of people saying they’re detached at work, and 19% describing their experience as “miserable.” (No wonder quiet quitting still has a grip on workforce behavior.)
- The average rate of early turnover is 38%. And more than 40% of employees who leave within the first year do so within the first 90 days.
Meanwhile, CEOs say the talent shortage remains a top concern. In fact, they told Gartner this is more crucial than financial issues like the risk of recession.
Faster, Better or Both?
I’m not the only one concerned about the pressure to recruit faster at any cost. Plenty of experts are also raising legitimate questions. And one of those experts is Lou Adler.
Most HR professionals know Lou as the consultant and author whose performance-based hiring model turned the recruitment industry on its head. With over 40 years in the recruiting industry, Lou’s company, The Adler Group, has trained over 40,000 hiring managers and placed over 1500 executives at many of the world’s fastest-growing companies.
In 2022, I spoke with Lou on a #WorkTrends podcast episode, where we compared notes about the state of recruiting and what employers can do to achieve better results. Of course, since then, AI has continued to transform the HR tech landscape. But I think you’ll agree, the fundamentals Lou and I discussed remain just as relevant today…
Hiring Decisions: Are We Making Progress?
You say hiring results haven’t improved much in the past 25 years, even after tens of billions have been spent on new HR tech. Why?
Well, look at the Gallup monthly employee satisfaction report. It hovers around 30-33% of people who are actually satisfied with their jobs. And that number hasn’t changed in 25 years.
So as far as I’m concerned, things have not only not gotten better, they’ve gotten worse. And I think I know why. But this is at least sufficient proof to say, “Hey, maybe we have a problem.”
The Great Resignation and Beyond
Let’s talk about the Great Resignation. What’s behind that?
It goes back to why people are dissatisfied. They accept jobs when they don’t really know what the work is. They don’t know the manager’s style. They don’t know the quality of the team. And they’re not 100% sure about expectations for their role.
Satisfaction is driven by the work itself, the people, the company, the manager, the projects, the impact they’re making. But those things get short shrift. The hiring process focuses on the start date, not enough on the work people will be doing.
That’s the underlying problem. And it’s gotten worse because employers are now trying to hire faster for more money. So now we have the Great Resignation, et cetera, et cetera, et cetera.
What tends to derail the recruiting process?
Employers are often driven by a strategy to fill jobs as fast as they can.
But in the process of making that decision they need to ask, “Should I hire this person?” And a candidate should ask, “Should I take this job?” Those answers require a much more detailed, thorough evaluation. And both sides aren’t using tools properly to make that kind of decision.
Employers have competency models and behavioral interviewing. But that’s a band-aid. It doesn’t address the core problem.
They may focus on filling a job in the cheapest, fastest way with whomever applies. That approach helps them move forward faster, which may be a business priority. But that drives the decision, instead of finding the best person for the job.
Recruitment Success Factors
What would you do differently to make an impact?
If you want to implement performance-based hiring, you have to do two things:
1) Build a job requisition that defines the work. In other words, list 5-6 key performance objectives an employee must accomplish over the course of a year to be considered successful in that role.
2) Don’t hire anybody unless they meet the criteria that predict on-the-job success. That’s why we offer a Quality of Hire Talent Scorecard tool with the best predictors of success.
Don’t hire anyone unless you add these two bookends to the process. Then you’ll figure out what you’ve got to do in the middle to achieve better outcomes.
Up Close With Performance-Based Hiring
For more details about how Lou’s strategy works, I found a variety of excellent resources on his company’s website. For example, these are the 12 criteria that comprise the Hiring Effectiveness Index.
To get started in evaluating your hiring process, rank these factors on a scale of 1-10, with 10 as the best score:
Key Criteria in Performance-Based Hiring
1. Job Analysis: A clear understanding of performance objectives and success drivers, as defined during the job requisition process.
2. Sourcing Effectiveness: The majority of candidates who meet with the hiring manager are strong and would likely view the role as a significant career move.
3. Interviewing Accuracy: The assessment process is consistent throughout the company and accurately predicts on-the-job performance in the 75-90% range.
4. Recruiting Success: The strongest candidates are seen and hired based on career growth. Few accept other offers. High end-to-end yield with few opt-outs.
5. Onboarding Impact: Candidates are fully aware of performance expectations before accepting an offer. No surprises about the job on the start date.
6. Performance Management: The job description and interviewing approach provide a strong framework for managing and developing the new hire.
7. Quality of Hire: Quality of hire is measured, and all hires are top-notch. This raises the talent bar with more diverse, outstanding people.
8. Win-Win Hiring Outcomes: On the first anniversary, the new hires and hiring managers fully agree that offering and accepting the job was a wise decision.
9. Cost vs. Value: Consider the total cost of the company’s hiring programs, compared with the quality of candidates seen and hired.
10. Time-to-Fill: Rank based on whether it is good enough and if it is improving, given the various new tools implemented in recent years.
11. Candidate Experience: Both hired and non-hired candidates view their experience with the company as very positive and submit a high NPS score.
12. Hiring Manager Impact: As a result of this process, hiring managers improve their results, with tools to hire stronger talent and manage people post-hire.
What AI Says About Performance-Based Hiring
The rise of AI in recruitment is rapidly revolutionizing talent acquisition. However, outcomes will improve only if employers apply it thoughtfully. So we need to more fully embrace strategies and practices that will carry us forward. That’s not just my opinion. AI, itself agrees.
In a recent inquiry about this method, ChatGPT replied:
“This methodology emphasizes hiring candidates based on their ability to deliver specific results, rather than just matching skills or experiences to a job description. To improve the quality of hire, consider these three best practices:
- Define Clear Performance Objectives
- Implement Structured Behavioral Interviews
- Focus on Candidate Motivation and Fit
This can significantly improve the quality of hires, ensuring that new employees are not only capable of performing their roles but are also motivated and aligned with the company’s goals and culture.”
Bottom line: With or without AI, we can’t improve any hiring decision unless we take time to understand the specifics surrounding that work role. Ideally, instead of being a race to hire, this should be a race to capture the important aspects of the role and communicate about it effectively with candidates.
Or as Lou Adler famously says, it is in everyone’s best interest to, “Hire for the anniversary date, not the start date.”
EDITOR’S NOTE: For more in-depth visit the Lou Adler Group website, where you’ll find all kinds of helpful resources for employers. And for more #WorkTrends insights, check our growing collection of podcast episodes at Apple or Spotify and subscribe!