Metrics and Hiring Part 2

A few years ago, I realized that I purport to run a data driven organization but I am the least data driven when it comes to my company’s most important process: hiring. I wanted to change that, so I put all the hires I made throughout my career in a spreadsheet and looked for correlations.  I graded everyone I hired on a five point scale and wrote down everything I knew at the time of hiring.  The process actually changed the way I hire pretty significantly (you can see some of the results in my earlier blog post).

I’ve become much more intuitive about my interview process rather than working through a checklist of desired skills.  I’ve also become much more aggressive about pulling people from my own network and I’ve encouraged my employees to do the same.  I’m more open to people with unusual backgrounds, but I do a lot more thorough reference checking. I think hiring is a pretty personal thing and there are lots of different ways to do it successfully, and I wondered how much my results would match someone else’s experience.  I was actually able to convince a friend, a very successful serial entrepreneur to run the same experiment I did.  He can remain anonymous, or if he’s willing I will post his name.

Anyway, here are some of his results: HiringL2 His overall distribution looks somewhat like mine, but he’s labeled more of his hires as “Superstar” and “Disaster”.  Maybe he has a riskier hiring strategy or maybe he’s just more opinionated than me :). Hiring2L2 He labeled schools on a 0-2 scale of general “prestigiousness” and referral strength on a 0-3 scale of how strong the referral connection was (I described the scale in my earlier post).  I found a weak correlation between prestigiousness of school and employee outcome, he actually found no correlation or a weak negative correlation. Like me he found a very strong correlation between referral strength and outcome. He also looked at some things I hadn’t thought of.  One thing he checked was how outcome changes over time.  He found that he was getting a lot better at hiring.  I like to think I’ve gotten a lot better at hiring, but now I want to go back and check. He also found a correlation between dollar compensation and success, which is interesting.  I think I would find a negative correlation – I believe that I’ve found executives harder to hire in general, although after recent adjustments I think I’ve gotten better at it. He noticed a weak positive correlation between a competitive hiring process and success. What’s the big takeaway here?  The results are interesting, but they’re probably highly personal.  Anyone who does a significant amount of hiring should really spend an hour and run the data on themselves.  It’s probably the single best thing you could do with an hour of your time.  If you want to share it with me, I’m happy to aggregate it, anonymize it and post it.