Not Hiring Exceptional Candidates Is Extremely Damaging but It’s Preventable

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Oct 2, 2017

Note: This article is part of a continuing series covering high-impact business practices that recruiting should be doing, but it doesn’t! 

Losing Exceptional Candidates Is Damaging Your Firm

Learning specifically why exceptional candidates were not hired can be added to the list of the many things that corporate recruiting functions, unexplainably, don’t do at all. Most in recruiting are more than happy to celebrate an exceptional hire. However, almost no corporate recruiting function takes the time to find out why their exceptional candidates were not hired even though losing multiple exceptional candidates over a year might be costing a corporation millions.

For example, imagine that you recruited for an NBA team and LeBron James and Steph Curry were among candidates who at least initially wanted to work for your team (because they applied for one of your open positions). If for, whatever reason, you lost them (usually because they dropped out or turned down your offer), wouldn’t you want to have a process for finding out why? That way you could learn from that failure and then take action to improve the reasons why they were lost.

Such a failure analysis process is a standard practice in corporate sales. There, after an important deal is lost, they use a process to identify the reasons why the firm lost out to a competitor. When you know the causes of the lost deal, you can then work to improve your process. However, for some unexplained reason, corporate recruiting doesn’t have a similar discovery practice, where it systematically identifies the “fixable reasons” why exceptional candidates were lost.

The Many Costs Associated With Losing Exceptional Candidates

Losing exceptional candidates who applied means that your recruitment marketing and employer branding investment was essentially wasted. And because these candidates weren’t hired, they can’t make an extraordinary contribution to your firm. If they dropped out early and accepted another offer, they can’t be placed in other jobs within the firm. Also, they can’t be placed in the talent pipeline for other openings within the next few months. That damage will be compounded even further if your exceptional candidates spread the word to their colleagues that they were treated poorly or that they received a lowball offer. Of course, even if you end up hiring one exceptional candidate, minimize the future loss of exceptional candidates by finding out why one or two dropped out prematurely.

Before you even begin to ponder the “but I don’t have time excuse” for not implementing such a “why did we lose them” process, consider the possibility that the ROI of such a process might be so high that you can’t afford not to implement one.

Common Preventable Factors That Cause the Loss of Exceptional Candidates

Every hiring process is different. However, my research has found that the common reasons why a firm loses exceptional candidates include:

1) A list of the common preventable causes for the loss of exceptional candidates

After a delay, you can follow up with these exceptional candidates to find out the real reasons why they didn’t become a hire. Some of those possible preventable reasons to look for include:

  • Hiring speed? — find out if the extended time that it took to make your hiring decision forced them to accept an “already in hand offer” from another firm.
  • The candidate experience? — learn if the hiring process was not candidate friendly enough and whether that discouraged them from remaining in the hiring process or accepting your offer.
  • A lack of feedback? — interviewing exceptional candidates who were lost can reveal that they were uncomfortable with the frequency of two-way communications and the extent to which their questions and issues were addressed.
  • Weak selling? — find out if the recruiter or the hiring manager failed to effectively sell the exceptional candidate by providing them with compelling information related to each of their job acceptance criteria.
  • The job itself? — after the candidate found out more (about the manager, the actual job, and the company), did they decide that these factors as presented didn’t meet their needs?
  • The offer? — for those exceptional candidates who rejected your offer, determine if the salary or other aspects of the offer was insufficient when compared to other offers or what their current boss offered as a counteroffer.
  • The application process? — you will unfortunately also lose some exceptional candidates during the application process. This dropoff rate will occur because exceptional prospects are busy people and they are less tolerant of long applications and what they consider to be intrusive questions. You can’t know if they were exceptional prospects if they don’t complete the application. Your only option is to capture the email address of all applicants and ask a sample why they dropped off. Then use this general candidate information as a proxy for why exceptional candidates would drop off of your application process.

2) You can also determine if you underestimated the value of candidates “with issues”

  • Did you underestimated the likely success of an exceptional candidate with issues? — often a hiring manager has “issues” with an otherwise exceptional candidate (g., not enough experience, they’ve never held the job title, they work at an inferior firm, etc.). Often because there is no clear answer for these issues, a manager passes on an exceptional candidate. Fortunately, you can use LinkedIn to continually track if that “passed-on candidate” landed at a top firm and if over time, they were highly successful. With this countering information, you can be less cautious about candidates with similar issues in the future.
  • Are you unnecessarily losing diversity candidates?  unfortunately, many diverse and women candidates are not selected because of the above issues. Eliminating these “false issues” may dramatically improve your diversity hiring. Incidentally, if you do hire diverse candidates with issues and they still end up performing exceptionally well at your firm, you should also discount the importance of these issues among diversity candidates in the future.

Action Steps for Learning Why Exceptional Candidates Weren’t Hired

Below are some action steps to consider when developing a process for learning why you lost exceptional candidates.

Define an exceptional candidate — I have written previously on how to measure the quality of those who you didn’t hire. The first step is to define what you mean by an exceptional candidate. In order to qualify for exceptional candidate status, this individual would normally exceed the job requirements by 25 percent, or they would be an industry icon or someone with a successful track record of implementing innovation. In most cases, an exceptional candidate’s resume alone would elicit a WOW from the hiring manager. For any open job, it would be unlikely that there would be more than two exceptional candidates that weren’t hired.

  • Calculate the number and the value of the missed exceptional candidates — develop a simple process for historically measuring how many exceptional candidates were missed for high-priority jobs. You should also work with the CFO’s office to determine the lost dollar value of the contribution that can be associated with not hiring these exceptional candidates.
  • Periodically ask exceptional candidates about their concerns — don’t wait until the hiring process is over. Instead, make sure that you make these exceptional candidates feel special and that you identify their job acceptance criteria. And of course, during the hiring process, informally ask exceptional candidates periodically if they are encountering any issues or even knockout factors. Act quickly to alleviate their concerns.
  • Survey them after a delay — when an exceptional candidate drops out of the hiring process or turns down an offer, ask them why. However, there are many reasons why any immediate answer might not be 100 percent frank. Fortunately, the odds of getting a truly honest answer increases if you wait at least 30 days before asking. So after this delay, during a telephone interview ask them to force-rank the top five reasons why they dropped out or said no to an offer. Having a third party conduct the delayed interview further increases the odds of getting authentic and less-guarded answers. Incidentally, don’t try to extrapolate the reasons for leaving from regular candidates, because exceptional candidates have completely different reasons.
  • Also, survey your new hires — during onboarding to ask your new hires for help. Ask them if they encountered any problems or factors that caused them to at least momentarily reconsider whether they wanted to continue the interview process or take the job.
  • Keep in touch with missed exceptional candidates — in most cases, you will be able to hire the exceptional candidates who you missed for several years. Maintain a relationship with them in case their new job goes awry, and also as a possible referral source.

Final Thoughts

Google is the only firm (under “Project Janus”) that has researched the percentage of missed hires. We can all learn a lesson from its data-driven approach. It’s no secret that in the modern world of recruiting it’s now essential that every aspect of the function become data driven. And once a function becomes data driven, the performance of new hires (aka quality of hire) is clearly the most valuable metric and area of focus. Close behind a direct measure of quality of hire, in importance, is any metric or process that allows you to directly improve your overall quality of hire. And fortunately losing fewer exceptional candidates who have already expressed an interest in your firm is a low-cost and high-impact way to improve your overall quality of hire.

So immediately prioritize these extremely high-value exceptional candidates. Begin using a data-driven approach to land a higher percentage of them. The positive result for most corporations will be in the millions.


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This article was designed to stimulate your thinking and to provide you with actionable tips. If you found that it met those goals, please take a minute to follow or connect with me on LinkedIn

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