Claude Evaluates "Moneyball for HR!"
Last week's article about Alice O'Hara's discovery of the true costs of job board hiring sparked significant discussion.?Some readers questioned whether the numbers could really be that dramatic based on this table. We'll be discussing this model with two super guests at our next "Moneyball for HR!" for webinar. Please join us.
So we decided to put the data to the test - by having Claude, an advanced AI system, conduct an independent analysis of the assumptions and mathematics behind the findings.
The verdict? The numbers aren't just reasonable - they might actually be conservative. This is Claude's original assessment. This article is the summary version it created for LinkedIn.
The Hidden Math Behind Job Board Costs
One of the most questioned figures was the $20,500 indirect cost per job board hire. But when you follow the math, it becomes clear why this number is justified:
For every successful job board hire:
When you distribute these costs across only the successful hires, the $20,500 figure starts to look surprisingly reasonable.
The $200,000 Failed Hire: Breaking Down the Real Costs
Another eye-opening number was the $200,000 cost of a failed hire. Claude's analysis actually suggests this might be understated. Here's why:
Total potential impact: $257,000
Why Internal Moves Show Such Strong ROI
The data shows internal moves generating nearly triple the first-year profit of job board hires ($148,702 vs $56,128). This dramatic difference stems from:
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Moneyball Lessons for Talent Acquisition
Just as Billy Beane revolutionized baseball by questioning conventional metrics, we need to rethink how we measure recruiting success. Cost-per-hire, while important, doesn't tell the full story. We need to consider:
Moving Forward: Data-Driven Hiring
Alice's proposed solution of performance-based job descriptions and improved job branding directly addresses the core inefficiencies identified in the analysis. By reducing unqualified applications while improving role clarity, this approach targets both major cost drivers: high rejection rates and early turnover.
The key is shifting from a volume-based to a precision-based hiring approach. Just as Moneyball transformed baseball by finding undervalued skills, we need to transform recruiting by optimizing for quality over quantity.
The Bottom Line
When subjected to rigorous analysis, the data behind our original article holds up. The job board hiring process isn't just expensive - it's structurally inefficient at a systemic level. The good news? By understanding these dynamics, we can begin to implement more effective strategies.
As we continue our "Moneyball for HR" series, we'll dive deeper into specific strategies for transforming your hiring process. Up next: A detailed look at how performance-based job descriptions can slash your application-to-hire ratio while improving quality.
What's your experience with job board ROI? Have you measured the hidden costs in your organization? Share your thoughts in the comments below.
Performance-based Hiring, from Lou Adler's bestseller Hire with Your Head, transforms traditional hiring by focusing on defining actual job success and evaluating candidates through their past comparable achievements. A top labor attorney considers this the benchmark for hiring stronger and more diverse talent. The company offers a series of live and online training programs for recruiters and hiring managers who want to achieve more Win-Win Hiring outcomes.
VP of Sales @ SparcStart, The Video Platform for Recruitment Marketing
1 个月Fascinating analysis. The breakdown of indirect costs and the comparison to internal moves highlight the need for change. Shifting from volume to precision in talent acquisition is a proven productivity win—I’m looking forward to learning more.
Indeed Whisperer | Recruitment Marketing | Talent Acquisition
1 个月Unfortunately, this doesn't show the problem of job boards. The initial hypothesis is faulty. Source of hire doesn't define a candidate. If I'm an internal transfer for one company, I can be a job board candidate for another. Job board costs change based on how you use them (programmatic, duration based, type of campaign). They change based on a number of internal factors (bad conversion) to external factors (lack of supply). I get why we want to put numbers into this, but you're going to come up with a prescription that doesn't work. This won't convince CFOs to spend more - it will have someone in finance cutting off job boards, only to find out that other ways are more expensive. Data is company specific - which means it cannot be a universal truth.
Data and Workforce Planning Analyst with a focus on recruitment, employment, and diversity within organizations that are highly regulated and policy driven (views on LinkedIn are personal and my own)
1 个月There are 3 data points that I review initially when it comes to avoiding a bad hires which is classified as a risk or vulnerability 1. Occupancy. Teams that have high vacancy already have stress eg a unit of 25 budgeted has 15 present. Poor performance can exist there regardless of the hire. So break analysis into high and low occupancies and make the storyline and approaches different. That doesn't mean a person cannot thrive and perform in a 70% filled team - they may need other support mechanisms now. Eventually the others will hire 2. Supervisory. Know where well trained and well retained supervisors and high engagement rates are. Placing new personnel in sight of those supervisors can lengthen retention. Tough to prove productivity but easy to show time in role. 3. Contingent Labor Use. A team of 25 may have 5 contractors. When a vacancy pops, pause. It might just be time to extend the contract team to 6 or do a conversion with a series of incentives. Moneyball(ing) in any discipline (Hzr, baseball, etc) is about reducing risk. Its identifying what you want to avoid (such as early exit or performance gaps) and making moves that make the emergence of that risk lower for management.
Life-long Student of Hiring
1 个月I think the point that there are practical approaches to examining the real cost/reward of hiring decisions and practices that a CFO would/should support is a serious path forward for TA's future focus. John (Dr Sullivan) has long demonstrated how we under value the cost of turnover That said, we shouldn't make decisions that overreach on the basis of comp for example since many firms have poorly thought through their org design and many of their positions might very well be eliminated at no loss to the firm. So I am in favor as data access grows and quality of data improves in examining the real value turnover for critical roles. I have a few favorites in mind that could be identified by function and industry.
Always appreciate your insights and expertise Lou. As an HR leader that's been around hiring for most of my career, I whole heartedly agree with your break down of the real hiring costs. There are so many hidden costs that unfortunately get overlooked.