Attracting the Best is a More Powerful Talent Strategy than Weeding Out the Weak


Lou Adler

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007). Adler holds an MBA from the University of California in Los Angeles and a BS in Mechanical Engineering from Clarkson University in New York.

Webinar Transcript

Announcer: Lou Adler is the president of Adler Group, a training and consulting firm helping companies find and hire top talent using performance based hiring. He is the Amazon best seller author of "Hire With Your Head: Using Performance Based Hiring to Help Top Talent." Adler is a noted recruiting industry expert, national speaker, and columnist for a number of major recruiting internet sites including SHRM,, and Adler's early career included executive and financial management positions with the Island Group and Rockwell International. He holds an MBA from UCLA and a BS in engineering from Clarkson University in New York. And now, please welcome to Elevate 2015, Lou Adler.

Lou: Hey, hi everybody, this is Lou Adler. I want to talk to you today about performance based hiring. Performance based hiring is an integrated business process for hiring top people. It's not a series of independent silos or point solutions like interviewing or sourcing or closing. It actually integrates all of those pieces together. What I want to focus on in using performance based hiring is how to attract the best people rather than weed out the weak ones.

In my opinion there is too much emphasis on getting as many people in your candidate pool and weeding out the weak ones. I'd rather just focus on hiring the best ones and get them in there. We don't need to necessarily deal with everyone whom we're not going to hire.

As many of you know, I've been in the hiring business for many, many, many, many, many years. It actually started I was in engineering and manufacturing and finance, but when I became a recruiter I realized there was a business process. And almost 20 years ago I wrote the first book, "Hire With Your Head" based on 15 years of recruiting, put some audio tapes and video tapes together with Nightingale-Conant.

My most recent book is "The Essential Guide for Hiring and Getting Hired," which really focuses on both markets, candidates looking for jobs and managers and recruiters trying to find these people. But all of these really involve what I call performance based hiring which is an integrated business process.

What I've discovered over the years is that four conditions always have to exist to hire a great person. Number one, you have to have a great job. Number two, you have to find great people. Number three, you have to conduct a thorough interview and choose a candidate both motivated and capable to do that work. Then you have to close the deal or what I call career opportunity. You can hire a great person, but if you're paying the person too much money they're going to under perform. It's got to be a win-win situation. Great opportunity, great job. It's got to map into that candidate's career motivators and intrinsic value system. That's how you come up with a great hiring decision.

But as I looked at that, when you really think it's simplistically, there are really two job markets. One is a holiday surplus model. People are actively looking for jobs. They're willing to take lateral transfers, but from a scarcity situation, whether you're going after passive candidates or the best active candidates, those people are only interested in career moves. So there's two job markets. The job market where we're offering lateral transfers that aren't too well defined and career opportunities based on growth opportunity and maximizing the person's internal motivators.

To get at that, there are really four metrics that I focus on. One is if you need to see more than four candidates to make the hiring decision, there is something fundamentally wrong. As part of that I start peeling who is in the candidate pool. It's usually the sourcing mix is off. Typically to hire a great person on a consistent basis, at least two out of three candidates presented need to be referred candidates. That's what I call the two to one sourcing mix. But to even pull that off, every good candidate you talk to at the top of the funnel, especially if they're passive candidates, you have to be able to convert those into prospects.

[Inaudible 00:03:48] talk about something. You call 100 great people and nobody talks to you, you're gonna wind up with the best of the active candidates. I want to get the best of the best candidates and most of those are going to be passive candidates.

Well that's what performance based hiring is, and the reason for that is important. It's that some of the best people aren't looking for work. In fact even active candidates, most of them get their jobs through networking.

We did a survey in combination with LinkedIn and our own surveys, but when you think about it, the high level 5 to 15% of the total talent market is active. Five percent for a real scarcity situation, high demand position. Fifteen percent for more traditional positions where there is some supply, but even in that 5 to 15% of the total market, I'm going to say it's almost 2 to 1 or 60% of those people find their jobs through networking with a referral.

Not many of them actually find their jobs through a job posting so let's just start setting the stage that hey, referrals, getting referrals and networking is the key to this. So now you look at 15 to 20% of the market are tiptoers. These are people who just started looking for work and we all know that people who just started looking for work talk to their friends or former bosses or former co-workers. That's the referral network. That's a real talent sweet spot, getting these tiptoers, they just entered the market and now we've got 65 to 75% of the total market which are passive candidates. These are pretty cool people, but they're all passive and they're not the least bit interested in taking [Inaudible 00:05:22] to find a lateral transfer.

You have to reach out, proactively reach out and find the names of these people. Call and engage with them and that's what I talk about the 60 to 70, 80% of the market, they're either tiptoers or passive candidates. Those are the people you want at the top of your funnel. And that's what performance based hiring is designed to get those people. The top of the funnel, the middle of the funnel, the end of the funnel and you hire them. That's how you hire great people every time.

Recognize that there are two job markets. One based on active candidates, about 15% of the total market, largely transactionally trying to force fit people to ill-defined jobs and you're giving these people lateral transfers. The career market, largely passive 85% of the total market, much more consultative recruiting. You've got to give these people a 30% increase which kind of blows you away, but it's actually a non-monetary increase.

It's comprised of three things. Number one, a better job which means it has job stretch meaning bigger job, more important job. Job growth meaning the opportunity for growth and learning is significantly better than the one they have, and then a better mix of more satisfying work. You get those things, compensation will be not unimportant, but less important. And that's what we're trying to do is recognize our two job markets, we want to tackle the total job market.

Bottom line, we're going to spend 85% of the passive market, 15% of the active market. This starts with actually developing a talent strategy. The strategy going after the surplus market is fundamentally different than the strategy of going into the career market. And again, 15% surplus, 85% careers. You follow the leader strategy which is largely in the surplus market and say let's get as many people as we can in the funnel and weed out the weak ones.

A scarcity strategy is totally different. Let's attract the best people. Let's identify, attract, and nurture them. The time is a lot longer in the career market, it takes time for a candidate to recognize this. Not transactional, not trying to fit people into a job you have open, but consultative, "Hey, let's talk about an opportunity that makes sense." Let's find out what motivates this person to excel and see if we can customize our job to some degree to fit that person or find people who find that job career motivating. Not the best people who apply but people who find that job career motivating.

That's why the key is you've got to define the job as a series of performance objectives, not a series of skills. The goal is not maximizing efficiency and reducing costs, it's maximizing quality of hire and having the right ROI, return on investment. The truth of the matter is that if you maximize quality of hire, the costs should be about the same and you're going to be efficient doing the right thing and not being fast doing the wrong thing.

So that''ve got to get the strategy right. In my mind in the career market it's a raising the bar strategy, attracting the best, not weeding out the weak.

But we've got to have a measure of quality of hire. And everyone is, "Oh, I don't know how to measure quality of hire." I think that's a bunch of bunk. I was with 150 software developers this past summer and I asked them, "Let's define the best people you've ever hired. The best people. Let's assume you hired someone today and a year from now you hired a great person." And you call me up and say, "Hey, we hired some great people." What would you describe as a great person?

First off, they exceed expectation, 150 people agree, they exceed expectation. Well, I say you'd better define expectations up front before they can exceed them. They work well with a team, they coach and develop or mentor others, they manage others. Well, let's define the team. We can define all that and find people who do that stuff. Number three, they're good at organizing and planning and getting stuff done. Well, let's see if they have organized and planned stuff we need done and comparable results to what you need done. Well, they're real great a problem solving. What kind of problems do they need to solve? Let's see what they're great at.

All of these things are predictable before you hire the person. Even though this is what you say you need after you hire the person six months or a year later. Well, are they flexible, they've got to fit with the culture. We can define the culture and find people who have worked in cultures just like ours and just like yours and work for people just like you. All of these things are predictable.

And bottom line, these people get it done. They don't make excuses. We can find people who have a track record of doing similar work in a similar environment who don't make excuses and organize, plan, and work with the same people. None of these things are impossible to find.

So why do we say we cannot define quality of hire is a misnomer. Using skills and experience is the problem. That doesn't find it. Comparable results define quality of hire. So to shift to a performance qualified attraction to shift to a performance qualified attraction and assessment approach starts with redefining the work and what we define as quality of hire. This, in my mind, means we have to eradicate or severely limit the use of traditional skills and experience based job descriptions. Just think about it. That is not a job description.

A list of skills, experience, academics, industry background, competencies, is not a job description. Maybe the responsibilities are, but we won't let people who can who have all of those skills who aren't top performers and yet we've all met people who are top performers who have a different mix of those skills. So this is an indirect approach that doesn't get us any closer. If you try to measure quality of hire using that you'll never get there.

What I always do when I talk to my hiring managers, I say, "Let's put the traditional skills based job description in the parking lot." For one thing it's not a job description, it's a person description. What do you want this person to do? If you hired a person today, what would they do a year from now you'd say, "Yes, we've hired a great person." It all starts with clarifying performance expectations. Every single job can be defined by five or six performance objectives that all start with action verbs, describe a task that's deliverable, and some result.

Now the key is you'll find people who can do that work. Don't compromise on the work. I guarantee if they can do that work they'll have exactly the right set of skills. Now if you are a great person, you're not looking for a job, you're talking to a recruiter, you just started chatting, which job would you be interested in? "Hey, I have a great job for you. You have this, this, this, and these skills. Hey, how would you like to take over a new project and launch it and be part of an important team?"

A performance profile starts opening up the candidate pool to everybody. Diverse candidates, high potential candidates, returning military veterans, people who have a different mix of skills and experience. Why would you want to exclude those people?

That's why my idea is you have to a performance qualified system that starts by defining the results. It opens up the pool 100 times to people who can deliver the results. I will not compromise on the results you need. But give us a little relief on the skills to do. If they can do the work they have exactly the skills needed. It's what a person does with what they have that makes them successful, not the skills that they have.

So in my mind when you conduct an interview, first find out what skills they have very quickly, then find out what they've achieved. You'll discover the best people have achieved a heck of a lot more with a lot less skills.

So now, how would you measure quality of hire if we have a performance based job description that lists five or six performance objectives, the big things they have to do in the whole year, a couple of things they have to do in the first quarter, the second quarter, but the process of success. Not only the major objectives but also how they get there.

When we start interviewing candidates, what we're gonna do is we're going to assess them to see if they actually can do that, but I'm gonna contend that there's a couple of measures that we can use to predetermine quality of hire.

Number one is obviously they have the basic skills, but I'm going for the bare minimum. Enough to get in the game. What I'm really gonna focus on is have they have a track record of comparable results. If they don't have that, they're out of the game. So I'm gonna look at have they done work, comparable work to what we need done?

Number two, is their growth trend up? If they're doing more and more work that indicates that they have the ability to take on bigger projects, bigger teams, then I'm gonna say, "Hey, that's two factors that make sense." Comparable results, trend of growth, and basic skill set. Right away, I say, "Hey, this person is in the game." But now I'm gonna say, "Do they fit the culture? Are the comparable results and trend of growth in a culture consistent with ours in terms or pace, in terms of working with the same kinds of managers and working with the same kinds of resources, same kind of customers and team players?" All of that stuff has to fit. I got those four things basic skills, comparable results, the right culture, and a trend of upward growth, I'm in the game here.

Now I'm also going to look for is what I call the achiever patterns. This is evidence in the person's track record that they're in the top 25 to 30% of their peer group. Engineers get assigned bigger teams. Marketing people get assigned cross-functional teams very early in their careers. Sales people get a track record making quota and get in the president's club. You start looking at a job and there's things that people do that gives evidence that these people are in the top third or the top 25% of their peer group. That's the achiever patterns.

Now with those five things, "Hey, I've got a pretty good person," but it's not done yet because we don't have the person figures out. The only way a competent person who has got the ability to do the work, it also has to be a career move for the person. Part of a career move is the person wants to do this work. They're highly motivated to do this work. And in fact it is a career move. This has job stretch, job growth, and a richer mix of work that the person finds more satisfying. You get those seven things and you can rank them any way you want. You get those seven things and you've got a hot candidate. And you have a hot candidate before you've hired the person.

How are we going to find these people? How do we get them in the top of the funnel? Now we know what our metric is, I want great people in the top of the funnel, I want great people in the middle of the funnel, I want great people at the end of the funnel. But what I've discovered is that most people, when you really think about people who apply, that represents probably 1% of the total market at best. Now we've got 50 or 100 for every one who applies that skills and experience qualify, we've got a lot of people who aren't qualified. So we spend a lot of time trying to find that one person out of a sea of 50 or 100 people.

But if we start focusing on, "Hey, let's have better advertising, more compelling jobs that focus on what the person can really do, we're gonna at least increase the pool by 10X." We're going to get skills and experience qualified, but we're gonna get both active and passive people. These are the people who saw your job posting who didn't apply or never even saw your job posting. So just that alone, even if you don't shift to a performance qualified, you'll get some better people with better advertising and focusing on performance.

But if we go to performance qualified, meaning, "Hey, if you can do this work, and you can see this work is important, we want to consider you," you'll increase the pool another 20 to 30 times in comparison to one person who applies who is qualified. These can be active candidates as well, but if we want the entire talent market, we have to go after the performance qualified people who are passive, we have to get them in the top of the funnel and it's that little diagram there is really, if I look down the funnel, that's how I would build the total talent market to get 100X bigger than one qualified person who applies. We have to target the entire talent market.

To get there, understanding the candidate comes before sourcing. We've got a lot of passive candidates here. So when I talk to people I've got to find out why they're even engaging in a conversation, why they would look, why they would engage and why they would accept an offer. So I have what I call the job seekers decision grid.

When you think about it, people leave jobs for negative reasons and accept them for positive reasons, but it's the reasons that are critical so I break these down into two parts. Extrinsic reasons which are short term and tactical or superficial and core reasons. And a core going away reason is they've got a going nowhere job. They might be actively looking but the job isn't fulfilling.

I ask people, "How long have you been looking? Why are you looking?" And what I hear, a person leaves a job for a core reason. I'm okay with that, that sounds okay, they should leave. That's exactly right. The extrinsic reason, the short term is the daily grind and a lot of people just leave jobs because they get frustrated. I'm not getting enough money, it's inconvenient, don't like the boss, whatever it is, it's something. Now I don't mind that but if I see a pattern of people leaving the daily grind that raises a concern.

What I also find interesting is that too many recruiters and too many candidates focus on what they get on day one. They get a salary, they get a job, they get a title, they get a company. And they negotiate this before they even know what the job is. The job is the work. Those five or six performance objectives. The 30% solution is increase growth, increase job satisfaction, and increase stretch. You get those things and you're in the game. But unfortunately, recruiters and candidates alike short circuit that conversation. I call it the vicious cycle.

You call a candidate up and 85% of them are passive. "Hey, would you be open to talk?" "Yeah, but what's the money?" Or if they don't say that, would you be open to talk but let me ask you what the money is. "How much money are you making? Sorry, you're not qualified."

It's amazing how often candidates and recruiters alike focus on skills and experience, they get someone in the game and then compensation what they get on day one is their negotiating strategy, and they do that before they even talk to people. I call that the vicious cycle.

Candidates accept jobs for what they get on day one. Recruiters force people to take the job by what they get on day one, they filter each other out on the wrong stuff. That's why 68% of the US work force is disengaged. Because the job was ill defined before they took it. In my mind, simply, let's have a conversation about a career.

"What's the money?" Let's be real frank. It doesn't matter what the money is. Let's see if it's a career move first. We want to hire people based on what they can do. That requires good recruiting skills and a true understanding of real job needs. This is what I call the consultative recruiting process. It's not a transaction. To pull this off, it's a consultative process so I ask candidates when I get them on the phone, "Are you looking for a job?" I want to focus on the career move. I don't want them to focus on the daily grind, I want them to focus on the career move. I want them not to focus on what they get, I want to focus on the career move.

I'll ask them how long have they been looking. Did they just start? That's great. I've got to tell you guys if you're finding candidates and they said they've been looking three to four weeks and haven't found, you have a sourcing problem. Good candidates or bad candidates. Passive candidates shouldn't be looking at all. I say, "Why are you looking?" And I ask this for every single job once I get them in the game. And I want people, I don't mind people looking for the daily grind, but I really like people who have careers that aren't going as well as they could, and my job is to craft a career that really maximizes what they're going to do in year one.

Part of this is how do I get enough people into the funnel? The big thing now is...well I don't think the big thing now...I would say the big thing in the past, in the recent past has been employer branding. Let's get as many people to follow our company and then we'll force fit the best people into the job we have open. To me that's kind of passive. The big shift lately is talent branding which is you take all of your job, you put them in a micro site and you fit people to the function. It's easy to find a micro site. Hey, all chemical engineers, all sales reps, put them in this function and then based on your open jobs, you can fit people to the appropriate job. It's a heck of a lot easier to brand it, but if you can get performance qualified people combined with talent branding you're gonna fit the job to the person. Let's get everybody. Let's discuss it. That's how you really tackle the whole marketplace.

Get as many people as you can, passive candidates, active candidates, but focus on the job itself and what the impact of that makes on the person. You do those things and you're in the game. But to get to 100X, to get the entire talent market, you've got to focus on performance qualified not skills qualified. You have to have an employee value proposition, that's the EVP. Why does this person want this job? Why is it a career move? You have to get their attention somehow, that's what the AGM is. Attention getting mechanism.

You've got to emphasize what they do, not what they need to have. You've got to sell the conversation about a career move. Not the conversation on what they get on day one. You've got to create a career move real time. In my mind it's not a job description listing skills, responsibilities, and level of experience. It's what a person is going to do. I call that a performance profile, a performance based job description. It's what they do with what they have is what's important. Every one of those performance objectives. Grow sales by 10%, build a team, evaluate a process. They start with an action verb, build, do, create, upgrade. They include a task and a deliverable that's measurable.

That's what gets people excited. You ask why did you take this job? "Oh, I'm going to be doing this work and here's what I can become if I do it better." But you need a warm up. You've got to get people into a discussion. It's consultative recruiting, it's not transactional. Don't drive people to the job, drive people to a discussion. Emphasize in your advertising and your messages and voice mails and emails what they're gonna do, the EVP. What they're gonna become if they do this?

For example, lead the turn around of a big project. Own the plan. Improve the lives of somebody for people in the health care or whatever it may be. Those are good EVPs. Rebuild our team. Turn around our company. Emphasize what they're gonna do. Create the roadmap, upgrade the team, figure out the problem, train a user group. If they can do that work, they've got the skills to do it. I'm not gonna compromise on the work. They have to do it. I totally agree with that. They might have a different mix of skills, you'll see if it's enough. Maybe a little bit of training. Don't filter people out on skills. Get people excited about the EVP and what they can do and then you've got a whole different pool of candidates in your talent pool at the top of the recruiting funnel.

Here's an example. You might want to pause the screen. I'm not gonna read the example, but this is a real example of a real job that I completed a couple of years ago for the VP HR. I created a story out of it. It was in a wasn't in a great location. This story overrode the location. The idea is lead with an attention getting mechanism. An open letter from the CEO to my next VP HR. I probably sent about 70 of these, 65 were opened. The emphasis is on the future, the present, and minimize the past. I emphasized what the person was going to do, learn and become. If you read that, you'll see that. I told a story. It was a warm up act. "Hey, let's just set up a chat." I didn't ask for a resume. "Hey, why don't you write up a one or two page paragraph, half-page write up of something you've accomplished most related to the job. Let's discuss it."

That's a great way to send out all of your emails. If you get too many people responding, just send them an email, "Hey, like your background, here's what we need done, if you've done something similar and you think it's a career move let's talk about it. Send us a write up." It's a great way to filter out unqualified candidates without disrupting your system to any great degree.

Now all of a sudden you get new people in the funnel. All those things we've said, you will get good people at the top of your recruiting funnel. I make sourcing similar to driving a tour bus, and that's a tour bus, not a metro bus with a fare and a location. I try to get people on the bus. "Would you be open to explore a situation if it [inaudible 00:24:55] to what you are doing today?" I can get 100 people. Most of those people would say, "Yeah, I'd be happy to get on the bus, but what's the money?" "Let's be real frank, if it's not a career move, we'll definitely pay you. Let's first have a conversation and see if it's a career move."

What I'm trying to do is create this opportunity gap. This is what I call the 30% solution. I tell the candidate, "For this job to be a career move I at least got to give you some job stretch, some job growth, and an increased mix of job satisfaction doing work that you find more satisfying." If I can get 30% of that, that's a serious career move. "Let's go review your LinkedIn profile and see if we can get there." Most candidates will do it and I start reviewing their profile. Part of that profile is understanding if my job really does offer that 30% solution. If it doesn't, "Hey, I love your background, you're probably too heavy for this position. Let's network. Let's see if we know someone who might be interested."

On the other hand if the job does fit, I say, "You know, I really like your background. It might be too much of a stretch though. I'm a little bit concerned you haven't done enough of this or you might be growing too fast." If the candidate sees the job as compelling, he or she will say, "No, I think I can do that and here's why."

When that happens, you've just put that person in the back of the bus. Good candidates want to drive the bus. Good recruiters can control the conversation. That's what I call consultative recruiting. You do those things, you will be seeing and hiring more people. You'll be getting people in the top of the funnel, staying throughout the funnel and being candidates whom you want to hire.

So here's one way to do it. Don't offer a job. "Hey, we're doing our work force planning for next year. Would you be open to considering one of these opportunities if it represents a true career move?" Sell the discussion, not the job. Get the candidate to sell you by offering too much stretch but not that much that they couldn't get it. This is how you enter into a conversation. This is how you move from what they get on day one to what they can do in year one. Manage the drive. I don't really know where this location is going to be. The candidate is great, it's going to be my job, maybe I'll modify the job a little bit, maybe I'll network with the person, but I, the recruiter, have to be in control of this process. I have to gain consensus.

"If I get you a meeting with the hiring manager would you be willing to take a little less money?" Recognize that this is going to be a remarkable career move. I gain consensus all the way. I want to get the hiring manager engaged early in the process. That's what performance based hiring is all about. Having the strategy to go after the best people. Raise the talent bar. It's not about cost and efficiency. It's about hiring the best people and justifying an ROI basis.

Recognize there's two job markets. One for just jobs and lateral transfers and ones that are careers. If you're in a surplus market, maybe jobs are okay. But if we're in a scarcity market where talent is tight, you can't assume there is a surplus so you have to use a different process. You also have to start creating a career move. It's not an ill-advised or an ill-defined lateral transfer move based on skills and experience, it's what a person needs to do to be successful. You have to know that. Eighty-five percent of the market is going to ask you that who are passive. The best people are not looking will ask you well, "Tell me about the job." You the recruiter, you the hiring manager had better understand the job or you're never gonna get there. You can measure quality of hire and that's what I track. Quality of hire at the bottom of the funnel, quality of hire at the top of the funnel, and quality of hire after you've hired the person.

Those 7 metrics can be tracked at the beginning, the middle and the end. After you've hired the person, reevaluate the same things. Would you rank the candidate exactly the same before you hired them and after you hired them, and you can do it. If there's a difference it's probably because the job changed or you didn't focus on something. That's what I call the feedback system. Use quality of hire as your target and then develop a system to track quality of hire. Top of the funnel, middle of the funnel, bottom of the funnel and after the person is hired. But you have to do all of those things if you want to attract the total talent market and I'm gonna contend the total talent market is huge in comparison to one good person who applies. At least 100 times. Probably bigger than that, but most of those are passive candidates and you have to have a different strategy to go after them.

The strategy really is we're going to offer career moves, not lateral transfers. That requires good recruiters, involved hiring managers and a consultative recruiting process based on needs analysis. Understanding what the candidate wants out of his or her career then trying to offer something that's most close. You do those things you will be hiring great people every time.

Now frequently people ask me as I discuss performance based hiring they say, "Lou, do you make this stuff up?" Practically speaking, I did make it up. But I made it up as an experiment. I tried a dozen things. Maybe one or two of those would work. I tried a dozen more things and got a couple other things that worked but after time we tried things eventually you get on the right path. That's what's called performance based hiring and Professor Todd Rose at Harvard University and president of the Center for Individual Performance and author of "The End of Average," recognized that performance based hiring is the secret sauce for hiring better people, but it all boils down to finding jobs that people are motivated to do. Not finding people who are skilled and force fitting them into a job.

That's what hiring great talent is all about. Understanding the job, great recruiters, great hiring managers, and a process that's based on consultative recruiting and matching with their motivating interests. You do that every time you will hire great people every time.

Good luck. I wish you the best of luck with your hiring great people. Thank you.