In this episode, SaaS-Story in the Making host Matt Wolach sat down with Founder and CEO of Criteria Corp, Josh Millet to discuss how science-based assessments are key to making better hiring decisions. Being around 15 years in the industry, Millet shares with us the importance of having objective and science-based assessments on hiring employees, how data can help support your decision-making process, and the importance of building a great team for your company’s success.
Podcast: SaaS-Story in the Making
Episode: Episode No 189., “How Science-Based Assessments Help You Make Better Hiring Decisions”
Host: Matt Wolach, a B2B SaaS sales coach, Entrepreneur, and Investor
Guest: Josh Millet, Founder, and CEO of Criteria Corp.
TOP TIPS FROM THIS EPISODE
What’s more Important, Potential or Experience?
In hiring, potential displays a sort of promise that the applicant can do well for the company and poses a more desirable outcome because of character. On the other hand, experience is like shreds of evidence that this person has done something before. Thus, he or she can do it again.
Most hiring frameworks put a lot of emphasis on experience. A resume can be filled with it, and it is also discussed during interviews. Millet mentioned that it is needed “for highly specialized roles that require deep domain knowledge” where experiences are valued with knowledge used to make them happen.
However, the problem with hiring is that the standard for a specialized role is applied all the time. Whereas, several roles that companies are hiring in high volumes demand something different. They need people who are quick learners, especially in fast-evolving industries. And this poses experience as a weak indicator of a good employee.
Therefore, what’s important among the two: potential or experience, varies according to roles. But a rigorous assessment must be conducted. So that underlying factors among those imposed standards can be avoided. And hiring can be done systematically.
Millet said, “It’s looking for what we call talent signals that predict long-term performance. So good critical thinkers, good problem solvers, hard workers, all these things have been shown to predict job performance across a lot of different industries.”
Increase Hiring Success and Reduce Turnovers using Science-Based Talent Acquisition
Millet shared that science-based talent acquisition can drive better outcomes in 3 areas: improving the hiring success rate, reducing turnover, and improving diversity-related outcomes.
The characteristics of every applicant have been carefully screened and studied to fit the company’s qualifications. Those selected using this supporting data have a higher chance of better performance.
However, in terms of reducing turnover, some industries have historically high turnover rates, like those in the retail and service industry. And this has become a constant struggle. To help reduce this, it should start with hiring the right people in the first place.
This is what Millet considers “looking at things that are linked to long term performance and retention.” Because when you start with the right people whose qualities are fit for your company, it can increase your chances of building a good team. And this will equate to lower turnover rates in the future.
The science-based assessment is ideal and appears to be effective for most companies. But still, not every company puts it into practice because “hiring is a people business.” And it can be challenging to put them as data.
Apply the Moneyball Approach
In baseball, the Moneyball approach uses data that can lead to success. Therefore, making baseball teams more successful with suitable player investments. SaaS uses an almost similar concept where data creates small changes that can result in a more significant impact in the long run.
Applying this to hiring, changing the way assessments are made can help your business in the long run. With data, you can identify which works best and which does not. And this helps you with the decision-making process when building your team.
However, this assessment is not the sole determiner of your hiring decisions. It is simply providing you with an overview of what can be beneficial so that you get to decide to the best of your abilities. Therefore, you will use data to improve decision-making about what strategy would be employed in the field.
Importance of Data-Driven Decisions
In sales, emotions are important drivers of clients’ decision-making. Human emotion should be studied and heightened so that clients will convert well.
When it comes to companies’ hiring process, especially when conducting interviews, it’s also normal for emotions to take over. Millet mentioned that studies found that almost 40% of interviewers have decided on the applicant’s fate in the first five minutes of the conversation—where the applicant’s knowledge may not have been reached yet. The instant connection between the interviewer and the applicant can determine the latter’s fate.
However, it may not always be the case. At the end of the day, data is vital to reduce risks accompanied by decision-making upon emotions.
Humans are complex beings. It can be difficult to identify our potential as team players through scores. However, this is the reason why a rigorous assessment is needed. Creating a specific criterion on which the company needs allows a more manageable selection of applicants.
It serves as a guide whether this person may be helpful or not. And by using a structured framework, it can be easier to identify if the characteristics of an applicant meet the desired criteria of the business, which will then leave you with a more positive outcome.
The Great Talent Migration and the Great Resignation
In many industries, great talent migration and great resignation still occur. When workers either shift or move from one sector to another, or simply quit their jobs, it may be a struggle for most companies. Especially in the time of COVID, there is almost a 35% employee turnover.
Companies should be wary about this and enhance their people strategy. As Millet mentioned, “even if you’re not growing as a company, the bucket just got a lot leakier.” It is an unavoidable situation, but the risks can be reduced through science-based talent acquisition, which happens during the hiring process.
Message for the Startups
Growing your business is more effective when you’re using the right tools and moving towards the right path. Millet suggests two things that startups must do: invest in your product as much as they can and use the tools that work for you in hiring the right people.
Investing in your product is putting effort into its creation while maintaining its flexibility. It should adapt to the current situations, the clients’ demands, and be flexible enough to improve over time. Maximize its adaptability to an extent that it can upscale and move upmarket.
When it comes to using the right tools, it should fit your business, its goals, and the characteristics of the people you need. Because in creating a great team, it starts with creating criteria of the qualities that would serve you, and finding that in people. Choose the right tool that will fit your needs.
[14:37] ”Data has really transformed how we transact and think about our businesses in almost every area.”
[16:01] ”What we’re doing is arming them with the data to make more informed decisions. But ultimately, the decisions are still there.”
[18:50] “I think that the problem with the way hiring works is that everyone thinks that the roles they’re hiring for are highly specialized, where experience is an absolute must. And actually, the evidence suggests the contrary.”
[20:08] “As humans, we do want to work with people we like and that’s a real dynamic.”
[20:48] “We want to focus on the objective things that we know predict outcomes, right?”
[24:53] “Over investing in a product early on to the extent that you can is not a bad thing.”
[14:07] “They’re making science-based decisions for their roadmap and for their marketing. Why not with your people as well.”
[20:28] “In the hiring process, emotion is a huge part of it.”
To learn more about Josh Millet and Criteria Corp, visit: https://www.criteriacorp.com/
You can also find Josh Millet on LinkedIn at: https://www.linkedin.com/in/josh-millet-23ba192
For more about how host Matt Wolach helps software companies achieve maximum growth, visit https://mattwolach.com/.