Friday, April 27, 2012

The science of recruiting is years behind our peers in other disciplines. Unfortunately, we have no scarcity of vendors and suppliers masquerading as content creators with plenty of opinions dressed in poorly collected data supporting obvious conflict of interest agendas and lacking any integrity in their description of their methodology...if any is offered at all. So, there is a little light at the end of this tunnel when i see research like this journal article, "Paying More to Get Less:The Effects of External Hiring versus Internal Mobility," This study was was published in the Administrative Science Quarterly in September 2011 and also described in detail by Peter Cappelli, my favorite Wharton Professor, in his monthly column for HRExecutive Magazine, Paying More to Get Less and is perhaps the best we’ve seen in years. In the original research, the author describes how he dug into the data of one financial services firm to identify and track a number of jobs filled by both internally and externally sourced candidates over a protracted period of time. He compared subsequent performance ratings of the incumbents over years and found statistically significant evidence that: - Internal candidates performed better than those hired from the outside. - External candidates took as long as 3 years to achieve the performance levels of their internally promoted peers. - External candidates were paid 15% more on average. - Performance of individuals who were externally sourced was higher if they were NOT brought in through search. Now this is science! Not because it is correct but because it is done by transparently examining methodology in a way that you (dear reader) would be able to replicate within your own firm.

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