What percentage of your new hired turn out bad? What does that says about your selection process?

Now I know what you are thinking, your interview process is really well designed, and you hardly ever hire the wrong candidate. Occasionally, a bad hire slips through the cracks and makes it into the organisation, but that’s inevitable right?

Yes, while that’s true that no selection process could ever be 100% effective all the time, how many low performers is your process letting through? What does this say about the quality of your hiring systems?

Statistically speaking, finding low performing candidates is actually pretty hard work. Job performance, as with most psychological constructs, follows the normal distribution (also known as a Gaussian distribution, or the bell curve), as seen below:

Bell curve of performance. Most people are in the ‘average’ range.

Based on this distribution, you can expect around 84% of candidates to be average to high performers, and only 16% of candidates to be low performers  (15.9 to be exact, but 16% will do). This means that even without any selection process at all, through random hiring, you will only get the decision badly wrong a mere 16% of the time.

Now think about how many low performers make it through your existing selection process.

If that number is between 11%-20%, you are straight up wasting your time interviewing candidates, and picking them at random would be more cost effective. Your interview process simply isn’t measuring anything relevant to future performance, and / or isn’t sensitive enough to identify poor performers. This may be a hard pill to swallow for many hiring managers, but the numbers speak for themselves.

If you have a 16% chance of hiring a low performer at random, and your miss-hire rate is close to that, it would be cheaper to select candidates using a pair of dice or a roulette wheel instead of interviews, while being equally effective.

If that number is between 5%-10%, your interviews are adding value, but not a whole lot. 5-10% is pretty low performing, and is often about as effective as it gets when relying solely on interviews. Although a well-designed, thoroughly researched and validated structured interview is among the most powerful predictors of performance known, interviews are only a small piece of the puzzle.

Personality traits, values, motivations, cognitive abilities and other integral predictors of future performance simply cannot be measured with an interview, and require specially designed assessments. Omitting these from the selection process greatly limits the effectiveness of the selection process; allowing low performers to make it through the process.

If that number is between 0%-4%, then you have a pretty effective selection process on your hands. Almost certainly, you are using a range of assessments to form the basis of selection decisions, likely a combination of several different assessments, each measuring traits highly relevant to future performance. Whatever the case may be, this is the miss-hire rate you should be aspiring towards, as this is indicative of a high performing selection process.

Now that you know the odds, still think that your selection process is really well designed?

If not, augmenting your selection process with high quality assessments is the easiest way to reduce the number of miss-hires, and ensure that your selection processes generate ROI, and isn’t simply a waste of time, money and effort.

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