A veil of secrecy shrouds the sensitive subject of the casualty rate of "sales" consultants in the recruiting industry. Oddly, there is an equivalent aversion to discussing ways to improve the selection and hiring process seemingly based on the unexamined premise that it is not possible to do so in any significant way.
This mentality might best be illustrated by a conversation I had recently with a top industry trainer. On the subject of consultant casualty, I was instructed...
"Just remember what Bill Cosby told his son on the Cosby show: 'Be careful son I may just decide to kill you because I know how to make another one!'" The approach promoted is simply: "Hire bunches. Most will fail. Some will be gold. Keep the gold." In my mind this fails to take into consideration four types of serious collateral damage.
- The human cost: When I was a young man my father used to tell me, "Son, you either encourage people to live or you encourage them to die." The emotional and financial toll that this kind of failure takes on the individual consultant involved and also on their family is huge. Not to mention the resultant tarnished reputation of the industry.
- The financial cost: While it may be argued that independent (commission-based) consultants cost nothing, this is not a correct assessment. If the owner or manager’s time is worth $100/hour (and any recruiter worth his salt is) and you spend roughly five hours in interviewing, hiring, and initial set-up and at minimum five hours on-boarding the new-by – you just invested a cool $ 1,000 and you haven’t gotten started yet! Add the time invested in early supervision and training, the new consultant actually costs you $ 5,000.
- The cost of the casualty rate: While I am not aware of any scientific study of the issue that exists...general consensus is that the casualty rate for new consultants is high, possibly 75-90% (Gary Stauble of The Recruiting Lab, states that the failure rate is 80%).1 This means if you hire 15 consultants this year 10-13 will fail at a cost to you of $50,000 – $ 65,000. In other words, enough to put two of your kids through college this year. That is bad business sense and worse common sense, but that is not all...
- The cost of potential lost revenue: This is possibly the most dramatic loss of all. What if, instead of experiencing a 75% casualty rate you could have a 75% success rate? Not only would you save the $50k invested in startup, the success of those additional 9-10 consultants could conceivably net your firm an additional $ 270,000 – $ 900,000.
What if you could improve successful consultant hiring by 6 to 7 times? I believe you can...by paying careful attention to one core truth and three key hiring practices.
One Core Truth:
Top producers are born, not made.
Furthermore, the key attributes of successful consultants can be benchmarked.
Veterans will argue that "lots of different types of people make top producers. There is not one type." And, while I agree wholeheartedly, there are some core attributes of successful consultants without which a person will not become a top producer. My premise is this: Instead of accepting the current high casualty rate, why not make it our mission to discover those people who can and will be successful recruiters?
Derek Gatehouse, in his excellent book The Perfect Sales Force (Portfolio, 2007), puts it this way: "The perfect sales force advocates that studying top-performing sales people is a good idea – not so you can copy them, but instead so you can hire more of that type. Instead of trying to teach a dog how to behave like a cat, you will have much more success finding cats." 2
Step one in reducing the casualty rate in consultant hires is to accept the fact that things can be different and that key attributes can be benchmarked and assessed. That leads us to the three core hiring practices essential to reducing consultant attrition:
Three Key Hiring Practices
Assessment – As already mentioned some characteristics of a type are obvious. Just as Douglas Mudd, author of All the Money in the World, via biographical analysis and observation was able to discern key traits of the nation’s top self-made billionaires, so we can assess the traits of top performers in recruiting. Some of the more obvious essential traits might be: drive, work ethic, aggression, endurance, high tolerance (for failure and disappointment). However, other traits may not be as obvious, although just as essential. This is where assessment becomes valuable.
Assessment in the human resource arena is not new. But few assessments are able to "deliver the goods" in an accurate and reliable manner. Recent interest may have been peaked by Marcus Buckingham’s best selling twin books: Now Discover Your Strengths and Go Put Your Strengths to Work. Due to my interest in assessment, I recently took a more than casual look at Buckingham’s "Strengths Inventory," and was surprised to discover that there is no documented science to support his inventory. 3
In an effort to improve hiring in our own firm, as well as across the industry we forged a strategic partnership with a leading psychological testing firm, Essentials LLC. Essentials administers an assessment that has been determined by the American Psychological Association, the American Educational Research Association and the National Council on Measurements in Education to be among the most accurate and reliable instruments in existence. The test was established (normed) with over 10,000 subjects over a period of more than a decade, and has been the subject of no less than 700 white papers. The assessment is simple to administer, internet based, and takes no more than 10 minutes to complete.
Using this tool we are benchmarking and behaviorally targeting the key attributes of successful recruiting consultants. This tool is able to accurately predict the traits of candidates that will or will not be top performers.
Key hiring practice number one in reducing consultant attrition is to determine these key characteristics by assessment.
Interview – Again behavior-based interview techniques are nothing new, but precious few hiring managers are skilled at using interview techniques to assess a candidate’s true performance potential. Derek Gatehouse helps us to hone this skill. He suggests that two keys are: (1) know what you are looking for (assessment), but don’t reveal it, (2) structure your questions and the entire interview around the talents needed and then listen for patterns or behavior. 4
For example, one key attribute of successful recruiters is aggression. The recruiting environment is highly competitive. How would you structure your questions to get at this attribute without revealing your hand?
Sample #1: "So, tell me about your last job?" Notice the question does not ask anything about how competitive they are. Rather it sets them talking about their work. While they "carry on" you are looking for certain key indicators: Desire to be the top performer; pride over market share; passion to beat the competition; desire to embarrass the corporate recruiting department, etc....
Sample #2: "Tell me about landing some of your key contracts. How did you pull it off?" Again, without telling them what you are looking for you have created an environment where you are able to observe key behaviors that have made them successful. Ideally you will hear stories about how the client was using a dozen other recruiting firms but none of them had candidates, i.e., "Other firms made promises. We delivered. We won."
Once you have completed the assessment phase the interview serves to reinforce what the assessment reveals about these core attributes. It is more confirming than it is definitive.
On-Boarding – Here we are not so much focused on the "housekeeping" or mechanics of on-boarding new consultants as we are on understanding the key performance motivators of each consultant to ensure that we provide an environment in which they can thrive.
Workplace performance expert, Dean Spitzer, states that 84% of workers could perform significantly better if they wanted to, and a full 50% said that they are exerting only enough energy to keep their jobs.5 The cost of mediocre job performance to business is enormous. The focus of this key practice is to provide the type of environment that allows a top performer to consistently operate at the top of their game.
In order to do so you have to know something about the motivational make-up of the members of your consultant team. The Essentials assessment helps us here as well.
Our newest consultant has been with us for just seven days. Although he is new to health care recruiting he was a top producing IT recruiter prior to joining our firm. He will be a tremendous asset to our team as long as we are able to provide the type of environment he needs to thrive. Here are a few of the insights the Essentials assessment yields regarding this consultant’s performance motivators (for the purpose of this discussion we will call him "Fred").
Fred has some strong traits that make him a manager’s delight. He has a strong inner sense of duty and obligation resulting in a need to finish what he starts and to fulfill job requirements. His need for personal achievement is low - for him it is all about the team win. His high nurturance creates a need to engage in active support of others and he will predictably communicate genuine warmth and concern to candidates.
However, he scores very high in deference, so much so that he is likely to defer at the drop of a hat. It is possible, even likely that unless we encourage his input regularly that our firm could miss much of the contribution he could make simply because he is unlikely to step forward or to speak up. We will need to intentionally and regularly draw his contributions out of him.
Secondly he scores very high in abasement. While this means that he is sensitive, unselfish, and humble it also has the unfortunate consequence that he will take criticism very hard and to feel as if he is not measuring up. More importantly, he will respond very well to praise, appreciation, to knowing that he is making a significant contribution to the success of the organization.
Having some keen insight early in the game will go a long way toward making our relationship with this consultant successful for the long haul.
We believe that the level of consultant casualties is unacceptable and that reducing attrition is possible. These very simple practices enable us to be sure that we are doing our best to reduce failure. We hope that you will consider making assessment a core piece of your hiring process as well.