Metrics and Hiring

Virtually every CEO claims to be extremely metrics driven.  As far as I can tell all of these CEOs are completely full of shit, at least when it comes to their own hiring.

We all hire based on intuition but we rarely go back and rigorously check our mistakes.  In my career, I’ve hired or been part of hiring 129 people that I know or remember well enough to confidently grade their performance.  Before last weekend, not once had I gone back and looked at the data.  Of course, that hasn’t stopped me from having strong opinions about interviewing and hiring.


So I went through and labeled every hire on a scale from disaster to superstar.  I was involved to different degrees in every hire, but unfortunately I don’t have notes on the process that happened for each candidate.  The distribution of hires was about what I expected.

Next, I labeled the referral quality on a three point scale from unknown (0) to close friend (3) and the school quality from unknown (0) to ivy league (2).  I looked at the average school quality and referral quality for each type of outcome.  The results of my unscientific survey were striking and statistically significant.


Referral quality was incredibly important – the eight worst hires that I’ve been involved in were all unknown to me and everyone at the company at the time of hiring.  Digging into the data showed that employee referrals were basically as good as my own personal referrals.  The average hire was a “might hire again” but the average employee or personal referral was a “definitely hire again”.

School quality was also positively correlated with performance, which was a surprise to me – I’ve always felt that people tend to overweight school quality in hiring decisions, but the data says that I probably underweight its effect.