Why Hiring Decisions Should Be Based on Data, Not a Hunch

Published on Aug 9, 2020

Using your intuition and “following your gut” can be beneficial at times. And as humans, it’s something we’re naturally wired to do. 

In fact, research psychologist and author Gary Klein found that as many as “90% of the critical decisions we make are based on our intuition.”

But when it comes to critical business decisions like hiring, it’s better to take a data-driven approach rather than merely relying on “a hunch.” Here’s why. 

What the Harvard Business School Has to Say About It

In an article entitled The Advantages of Data-Driven Decision-Making, The Harvard Business Review (HBR) talks about how intuition has become deeply ingrained in the business world and the deep value that’s been placed on it over the years. 

“Society has imbued the concept of ‘intuition’ — of simply knowing when something is right or wrong — with a tremendous amount of prestige, importance, and influence,” the HBR explains. “The concept of intuition has become so romanticized in modern life that it’s now a part of how many people talk about and understand the ‘geniuses’ of our generation.”

They make specific mention to intellectual and business juggernauts, like Albert Einstein and Steve Jobs, who relied heavily on their instinct for guidance. And while intuition has certainly factored into the success of notable figures like these, as well as other massive success stories like Henry Ford and Jeff Bezos, it doesn’t mean that it should be the default for making important hiring decisions.

The HBR says that intuition can definitely be a helpful tool, but there’s a strong body of research that says data-driven organizations have an inherent advantage over their competitors that rely less on data. In fact, they point to a study by PwC that found the former are three times more likely to experience “significant improvements” in decision-making than the latter. 

Let’s Quantify

Given that this article is all about the numbers, it’s only fair that we quantify exactly how much hiring decisions improve by taking a data-driven approach. According to separate research from the HBR, an algorithm that based candidate evaluations off of a simple equation outperformed human decisions by at least 25%

Further, using the algorithm allowed researchers to increase the accuracy of choosing productive employees by over 50%. That’s impressive! 

So, what specifically makes data superior to human intuition when it comes to hiring?

Brian Connelly, Associate Professor of Organizational Behavior and Human Resources Management at the University of Toronto summarizes it well by saying, “the problem is that people are easily distracted by things that might be only marginally relevant, and they use information inconsistently.”

It’s also easy to fall into the trap of being overly charmed by a particular candidate’s personality, where you end up overlooking major flaws. You may also pass up a top tier talent simply because they don’t have a striking personality or you don’t feel an instant connection with them. 

This isn’t to say that you should mindlessly rely on machines to make every single hiring decision, and human input should definitely factor into the equation. But at the end of the day, it’s clear that using data is highly important. 

And given the high-powered tools that are readily available, it would be foolish to not take advantage of them. 

Finding Perfect Candidates

In a whitepaper called The Modern Science of Salesperson Selection, David Kurlan of Objective Management Group mentions how extensive research was done to identify “perfect candidates” — those that are virtually no fail and positioned for massive success.

Kurlan boiled it down to two specific criteria:

  • Candidates are top performers who reached 100% of their quota or better
  • They were ranked in the top 26% of all salespeople

Then, by using strong filters to assess core sales competencies, Kurlan was able to pinpoint candidates that were in the top 6% of the total sales population. This shows firsthand how making an objective assessment using the right data can help a company find the best of the best

It eliminates the guesswork and allows you to assemble a sales team based on legitimate skill and talent rather than merely a gut feeling. 

What Specific Data-Driven Assessment Tools Should You Use?

There are multiple sales assessment tools on the market, but there’s one in particular we recommend — the OMG Sales Candidate Assessment. It’s designed specifically for sales rather than simply “being tailored for sales” and evaluates 21 core sales competencies (not just personality traits) that have been objectively proven to predict success. 

Here’s what it looks like. 

And here’s a glimpse of the data that went into identifying the 21 core sales competencies that it analyzes. 

Using this tool provides you with a bird’s eye view of what each candidate brings to the table, providing you with quantitative data and allowing you to effectively predict their likelihood of success. 

Studies have found that a staggering 92% of recommended hires through the OMG Sales Candidate Assessment reach the top half of their sales force within a year and that it eliminates 96% of hiring mistakes using proven science. 

It’s even been rated as the number one predictive sales talent assessment for nine years straight by Top Sales World

Let’s Recap

Although there’s no denying that instinct can definitely play a role in business success, multiple studies have proven that it has its limitations, especially when it comes to hiring. Companies that choose candidates based on concrete data have a distinct advantage over their competitors that rely solely on emotion. 

It’s just a matter of using the right tool to analyze core sales competencies, and narrowing your candidate pool down to the top performers. 

Want to learn more about the process? Register for a free sales candidate assessment today. 

Are you hiring? Get pre-screened, assessed, and vetted sales candidates tailored to your hiring criteria and unique selling environment. Request a Demo of the HireDNA sales recruiting platform.

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