Today I want to talk to you about the mathematics of hiring staff.

Let’s say you’re looking to hire.
You want someone who lives near your office, has the right qualifications, fits in well with your team, has the right skill sets, is not after a ridiculous salary, eligible to work in Australia, has a great work ethic and can communicate well.

Let’s look an example, a mid-level Bookkeeper to work in Parramatta.
Doesn’t sound too hard does it?

Here’s the maths:

• Previous surveys by MACRO tell us that the average person will travel up to 47 minutes to work for their ideal job, the lower the wage the less they will travel.
• The 2011 Census tells us there are 15,576 people living within the City of Parramatta that are of working age and within 30kms of the cities Post Office.
• Using the ATO’s estimates in 2004, 0.59% of Australians are bookkeepers.
• Let’s assume that only 1/3 of all bookkeepers could be classified as “mid-level” or 5-10 years experience within their career.
• We know that at any one day 67% of Australian’s are open to hearing about new opportunities.

That leaves 20.6 candidates – and we haven’t yet considered how well they get along with your team, their communication skills, their work ethic, their salary expectations nor even if they’d like to work for you!

Our stat’s show that all of these combined reduce the field by a further 80%.
This means that you end up with a grand total of only 3.5 bookkeepers that you can hire!

It’s not looking very good, is it?

Now, just to put that into perspective, that’s about 400 times fewer than the best estimates of how many intelligent extra-terrestrial life forms there are.
It also gives you less than a 1 in 285,000 chance of locating an ideal staff person from a job advertisement on any one day. I’d like to think that’s why recruiters still exist today – over 2000 years since the first recorded one appeared.

Before we get too pessimistic, let’s borrow from the maths of Complexity Theorist Hannah Fry.
In Hannah’s Ted Talk “The Mathematics of Love”, Hannah presented the maths on selecting your ideal partner.
Hannah’s states”

“Human emotion isn’t neatly ordered and rational and easily predictable.
But I also know that that doesn’t mean that mathematics hasn’t got something that it can offer us because…most of life is full of patterns and mathematics is, ultimately, all about the study of patterns.”

So let’s imagine then that you’re a roaring success on attracting good applicants.
But how do you decide when is the right time to stop looking for more applicants and settle with best you have?
Now generally, it’s not advisable to just cash in and hire the first person who comes along that shows you any interest at all.
But, equally, you don’t really want to leave it too long if you want to maximize your chance of growing a successful business.

Thankfully, as Hannah puts it “there’s a rather delicious bit of mathematics that we can use to help us out here, called optimal stopping theory”.
So let’s imagine then, that you have 4 weeks to hire the best person and there are a number of people that you could potentially interview and they’ll be at varying levels of goodness.
Now the rules are that once you hire them, you can’t look ahead to see what you could have had, and equally, you can’t go back and change your mind. In my experience at least, I find that typically people don’t much like being recalled years after being passed up for somebody else.

So the math says then that what you should do:
Reject the first 37% of applicants that are seen as serious employee potential.
Then, you should pick the next person that comes along that is better than everybody that you’ve seen before.
If you do this, it can be mathematically proven, in fact, that this is the best possible way of maximizing your chances of finding the perfect employee.

Now unfortunately, I have to tell you that this method does come with some risks.
For instance, imagine if your perfect employee appeared during your first 37 percent.
Now, unfortunately, you’d have to reject them.
If you’re following the maths, I’m afraid no one else comes along that’s better than anyone you’ve seen before, so you have to go on rejecting everyone and go broke or have a heart attack from overwork.

Okay, another risk is, let’s imagine instead, that the first people that you saw in your first 37 percent are just incredibly incompetent, boring, terrible people. Now, that’s okay, because you’re in your rejection phase, so that’s fine, you can reject them.
But then imagine, the next person to come along is just marginally less competent, dull and terrible than everybody that you’ve seen before.
Now, if you are following the maths, I’m afraid you have to hire them and end up with an employee which is, frankly, suboptimal. Sorry about that.

Okay, so this method doesn’t give you a 100 percent success rate, but there’s no other possible strategy that can do any better. And actually, in the wild, there are certain types of fish which follow and employ this exact strategy.
So they reject every possible suitor that turns up in the first 37 percent of the mating season, and then they pick the next fish that comes along after that window that’s say, bigger and shinier than all of the fish that they’ve seen before.
Some experts think that subconsciously humans do sort of do this anyway.
We give ourselves a little bit of time to play the field, get a feel for the marketplace or whatever.
And then we only start looking seriously at potential candidates once we have interviewed at least a few people. I think this is conclusive proof, if ever it were needed, that everybody’s brains are prewired to be just a little bit mathematical.

We find that all things being equal that it takes on average 5 suitable candidates being reviewed by the employer before a placement is made.
So the maths means that the first 2 should be rejected…and in most cases they are don’t get hired.
You could argue that this has less to do with the candidate and more to do with the employer wanting confidence in knowing the market.
The stalling process also gives the employer time to refine their requirements.
They start to see how realistic they are with their requirements and decide on what things are not so important in the job spec, or conversely that the market place is flooded with eligible candidates and they should be pickier.
Unfortunately this tactic results in delays, delays that in most cases result in the first two candidates finding work elsewhere. You snooze – you lose.

The best strategy is to have no more than 3 essential skill requirements all with a minimum level of experience. This allows you to focus your hiring on soft skills and other requirements such as communication, work ethic, proximity etc. and have large enough pool to compare. This is the hire for passion train for skill model.

Given that candidates have their own agenda. Whilst being in the running for your job they are highly likely to have other job applications out means that they are also evaluating offers – and probably rejecting the first 37% as well!

I’ll leave you with three more statistics:

1.     Applicants who say they’ll “think about it”; if they don’t reply in 48 hours, you have more than an 85% chance they will say no (7.5 hours is the magic “yes” window).

2.     The optimal time for a permanent placement is 2-3 weeks. Any longer, the best applicants have been hired elsewhere or start to think that your company is incompetent.

3.     Using DISC behavioural profiling, 42% of Australian’s present as non-emotional and boring. It does not necessarily follow that they are a low producer or unemotional.