Rise of the Moneyball Phenomenon: The New Science of Sales Recruitment

moneyball1Data is a beautiful thing. As the original Moneyball phenomenon of baseball scouting demonstrated, data can invalidate gut-based beliefs and lead to unexpected insights with big payoffs. And while statistical analysis has long been the foundation of various occupations and industries, the rest of the corporate world is rapidly catching up.

Experts have coined this recent development “the industrial revolution of data.” With the advent of big data and readily available measurement tools, companies are racing to adopt a strategy of data-driven decision making. As compellingly argued by Josh Bersin of Bersin by Deloitte, one area where using data can create a huge competitive advantage is in an organization’s hiring practices. In fact, fascinating research by the Wharton School of the University of Pennsylvania demonstrates the advantages of applying a Moneyball approach even when hiring CEOs.

According to The Conference Board’s 2013 CEO Challenge Survey, “human capital” was identified as the most critical challenge for the coming year. It’s no wonder then that data-centric methods of employee selection are considered one of the top workplace trends of 2014. HR and sales leaders understand that “measuring and predicting talent performance” is one of their top opportunities for value creation.

However, predicting sales performance can be extremely challenging. Although performance metrics are usually objective and quantifiable, the qualities of a successful salesperson often appear to be subjective and qualitative. So how can we add the science of data to the (often unsubstantiated) art of sales recruitment?

In order for an organization to hire successful sales employees, they need to know: (1) which knowledge, skills, abilities, and other characteristics (KSAOs) best predict sales performance; (2) how to accurately measure those KSAOs; and (3) how to statistically link this data to actual sales outcomes (Schmitt & Chan, 1998).

One of the best ways to do this is by using a valid and reliable psychometric assessment to scientifically measure job applicants. Research tells us that by doing so, companies can substantially increase their profitability through increased sales as well as lowered costs in hiring and turnover (Farrell & Hakstian, 2001).

When you adopt this type of data-driven strategy, you’re discarding gut instinct theories about what you think makes a successful salesperson and allowing the data to show you what actually makes a successful one.

So what you should be demanding from the metaphorical Jerry Maguire isn’t just, “Show me the money,” but rather, “Show me the money…by showing me the data.”

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Ji-A Min

Ji-A Min

Head Data Scientist at Ideal
Ji-A Min is the Head Data Scientist at Ideal. With a Master’s in Industrial-Organizational Psychology, Ji-A promotes best practices and data-based recruitment. She writes about trends and research in talent acquisition, HR tech, and people analytics.
Ji-A Min

Comments

  • what instruments do you use to determine Skill?
    Most of the pure psychometric tests I’ve seen try to correlate behavioural tendencies with skills practice, yet those same qualities can be attributed to many other professions.

    So in your experience, what psychometric measures do you use to articulate qualification? hunting/prospecting? detecting and dealing with stalling behaviour?

    • We use a proprietary psychometric assessment that measures characteristics and job-related knowledge correlated with sales performance. Research has shown that it’s often more useful to assess traits, such as personality, motivation, and values, that underlie successful sales behaviors rather than the behaviors themselves especially considering variations in selling styles, products, etc.

  • This is common to most psychometric assessments…..they tend to measure qualities, not competencies. Qualities are hardwired, and very difficult to change. Competencies are learnable and changable by default. Using qualites to assess a set of 10 or 11 Hunter competencies is generally a mistake. Too much assumption required.

    Assertiveness is a quality you will find in most C Suite players, and many in middle management, yet few of them can hunt for business. There are many comparable examples to do with closing skill, qualification skills, and consultative selling skills as well.

    I make no case against psychometrics to help understand how to manage a person, yet I am generally not supportive of their value in the skills end of the selection process.

    Did you create your own, or are you reselling some one elses?

    • We’ve created our own. The biggest value from a pre-hire assessment is being able to gauge someone’s potential to succeed.

      The other part of the performance puzzle is training and on-the-job learning. For example, we can assess pre-hire how resilient someone is, but unless they’re provided with an effective sales process, they might give up on a prospect after 3-4 attempts when the majority of sales take 5-12 contacts.

  • resilience is useful as are many other qualities that relate to emotional intelligence. yet none as important for the rep as desire and commitment to success in selling. are you saying that sales process is more, or less responsible for sales success than resilience? or more important than an individuals’ ability to connect emotionally, detect and develop need, and build a compelling business case?

    or as I heard from the 70s til now, sometimes NO means NO.

    • Successful performance is determined by so many contextual factors that I wouldn’t make a general statement about what’s more important. There are never any guarantees, but by gaining additional job-relevant information about a candidate beforehand, you optimize your chances of a successful hire.

  • getting closer yet still vague. most of the problems with successful hires start with knowing what the rep needs to achieve. HR rarely does, as do most recruiters not have a clue. They tend be clearer about what they want the rep to DO as opposed to Achieve. It all goes downhill from there. Without a clear link from achievement to competencies, its mostly just a waste of advertising ink, a lot of personal communications style preference by the interviewer(s), and a lot of compliance checking.