Pareto’s Principle: A Simple Rule for Recruiting Efficiency
Vilfredo Pareto would be pretty surprised to learn how many top executives rely on the basic principle that he came up with when analyzing the pea pods in his garden...
Pareto observed that approximately 80% of the land in 19th century Italy was owned by 20% of the population. While working on this theory, he found that it didn’t just apply to wealth distribution: there were correlations across almost every field. The "80/20" rule even applied to his vegetable garden, with 20% of the peapods carrying 80% of the peas.
The concept has come a long way from the vegetable garden. Many of today’s top performers rely on the principle – Tim Ferriss even borrowed Pareto’s ideas as one of the foundations for his seminal 4 Hour Work Week (a must read for anyone interested in improving productivity).
Today, Pareto’s law equates to this: 20% of your effort is responsible for 80% of your success.
Now for the key question: how can you apply Pareto’s ideas to improve recruiting efficiency?
Here are four areas to consider...
1. Checking your top talent sources
Not every candidate source is born equal. For each role there are certain websites or networks that will bear far more fruit than others.
Let’s take technical hiring as an example. Many of the best developers are leaving LinkedIn in droves, so the world's largest professional network is not necessarily the best place to source engineers.
Recruiters are using communities like Github and Stack Overflow to connect with the candidates that are hard to find, the very best prospects. For many, these sites represent the 20% time investment that carries 80% of the reward. (The reward being the best candidates!)
To learn whether this applies to you, you need to check your own data. Look at where your top (qualified) candidates come from, or better still, check the source of the candidates that you’ve submitted that have been hired.
Where have they come from? The answer will tell you where you should focus the majority of your time for maximum recruiting efficiency.
It’s important to note that for many roles, the answer may well be sites like LinkedIn or Indeed (as opposed to newer, trendier sources that require more sleuthing and creativity e.g. Goodreads). You shouldn't let this concern you, though; the source doesn’t matter as long as the candidate quality is high.
2. Collaborate better with Hiring Managers
The interviewing and assessment process needs a makeover from Pareto. There are dozens of small issues that are responsible for many of the inefficiencies that you experience.
A lot of the issues that arise during the recruiting process are based around the recruiter and hiring manager relationship. There’s a lot of unnecessary back and forth around the candidates that you submit that could be eliminated.
It all comes down to effective communication at the start of the process. Investing more time here can have a huge effect on recruiting efficiency.
One option is to include sourcers in the intake meeting. By having your "front line" recruiters involved here, you ensure that everyone is on the same page and that the candidates submitted are more likely to be what the hiring manager is looking for.
Another successful tactic is to kick off every search by creating a candidate persona to clearly define the exact qualities and experience that you’re actually looking for. This forces hiring managers to give you a level of detail that goes way beyond the job description.
Of course, bringing technology into the mix is usually a smart idea. New innovations mean that it’s easier than ever to bring TA teams and managers on to the same page, faster. AI can automate a lot of menial tasks, and there are platforms out there that not only allow for better collaboration, but can nudge managers in the tools they already use (like Slack or Microsoft Teams).
3. Choose the right interview questions
If your interviews were shorter, how much time would your team get back, cumulatively?
There are certain interview questions that cut through the noise and illuminate whether a candidate will actually be a good fit for your company (the 20%), and there are others that we ask simply because we’ve always asked them. If we focused more on the high impact questions, we could save time for everyone involved in the process from start to finish.
We’re not suggesting that you try to get out of the room as quickly as possible (every candidate deserves a fair assessment), just that you think carefully about making every question count and eliminating those that are surplus to requirements. (Here’s a pretty good list of interview questions for anyone looking for inspiration.)
And what about tests? The reason why (relevant) assessment tests are so effective in the application process is because they filer out a high proportion of the 80% of candidates that are not a good fit for your open roles.
It’s one of the reason we’ve seen a big growth in technical assessment platforms like Codility and HackerRank (geared around engineering hiring): they take care of the 80/20 analysis for you; all you need to do is look at the relevant candidates.
(For those looking to test culture fit we recommend the "airport test".)
4. Take a skills-first approach
It’s a surefire way to improve TA efficiency: make it easier to match people in your database with open roles (or future skills needs). A skills-first approach to hiring means you use the common language of skills – the skills people have, and the skills you require – to make smarter, faster talent-related decisions.
Skills-based hiring, with a focus on what a person can actually do, rather than just their degrees or past job titles, means finding the best people for the job faster, without having to sort through tons of resumes. Recruiters can spend less time and effort and end up with stronger, more capable employees – and not having to start again if someone ends up being a bad fit.
We also recommend building a database of passive candidates (from your talent community, silver medallists and past applicants, for example), and leaning on AI to ensure that information about their skills is accurate and up-to-date. Then, you have a simple way to pull up a suitable shortlist, as soon as a vacancy is designed. Minimum effort; maximum returns!