The Moneyball Approach to Recruitment: Big Data = Big Changes

The Moneyball Approach to Recruitment: Big Data = Big Changes

Jonathan Olden 25.04.2014

I read about a presentation delivered by Glen Cathey, KForce Senior VP and at the time Randstad's VP of Global Sourcing & Talent Strategy. His presentation was titled "The Moneyball Approach to recruitment: Big Data = Big Changes".

For those unfamiliar with the term "moneyball", it was a successful book, later turned into an Oscar-nominated film starring Brad Pitt about the true story of the Oakland A's baseball team of 2002.

Oakland used detailed statistical analysis to select new players ahead of the commonly held beliefs at the time of what made a good player. Using this analysis they selected players that would otherwise have been dismissed as not good enough and went on to break the record for most consecutive wins despite having a budget only one third of the top teams. 

Being highly impressed with this success, John Henry, owner of the Boston Red Sox, implemented the same statistical analysis for his team who went on to win the Baseball World Series in 2004 for the first time in 86 years. John Henry is now owner of Liverpool FC and using many of the same ideas, they lead the Premier League despite having a wages budget dwarfed by their main competitors.

Cathey spoke about how subconscious biases can affect how people make hiring decisions. An example used was the relative success of tall people where only 3.9% of US Males are over 6ft 2" but 30% of CEO's are over 6ft 2". This can be explained in how people can equate physical presence to leadership only 3.9% of US Males are over 6ft 2" but 30% of CEO's are over 6ft 2". This can be explained in how people can equate physical presence to leadership.

Companies today are facing the same dilemmas as the Oakland A's in 2002. There is a high profile war amongst businesses for the best talent and the reality is there are only so many highly skilled and experienced employees to go around and someone is always willing to pay them more.

Research shows if you hire on intelligence rather than subjective criteria, you'd be picking the top performing applicant 65% of the time. Should companies start paying more attention to aptitude based testing than how well a person can sell themselves in an interview or whether they wore a nice suit and went to a good school?

With Moneyball Recruiting, Cathey suggests that companies should "Move away from subjective means of assessing talent and make hiring decisions more objective, fact & empirical based." Another example given was of Luxottica (world's largest eyewear company) who took on average 96 days to hire an external candidate. Management blamed the recruitment team but by implementing statistical analysis, they found the real cause of the delays were hiring managers procrastinating on making decisions on who to hire. They have since reduced time to fill to 46 days.

Larger companies are investing heavily in analytics as a predictor of hiring success e.g. Googles People Analytics team, but what can smaller businesses learn? 

  • Do you interview people by just asking them to talk through their previous experience or do you have a strict set of well-thought out questions you ask them to answer?
  • Do you ask all applicants the same questions or do you change your questions and interview approach for each different interview?
  • Do you use aptitude based testing in your process?
  • Do you carefully review and assess both successful and unsuccessful previous hires to look for any common themes or traits?
  • Do you use professional recruiters with a proven track record or those who offer the cheapest rate?

 

Data should inform and help us understand people better but there is certainly room for people to go with their gut feeling also. If you are hiring or planning on hiring staff in the future and need some advice on the process to ensure your company finds the best talent out there, then the Morgan McKinley team would be delighted to discuss how we can help. 

Jonathan Olden's picture
Associate Director
jolden@morganmckinley.ie