Hiring methods and approaches are as varied as the candidates being interviewed. So how do you determine the most effective hiring method for sales to get the hiring process right?
This post provides effective scientifically-backed hiring methods to ensure your hiring the right sales candidate.
Everything we’ve written and everything you’ll read results from a lifetime of research, testing, and real-world application. We know this process works because we’ve done it.
This isn’t just our good ideas.
To craft this blog post and develop our guidebook, we combined our experience in sales performance optimization with
- Research on the best practices of top-performing companies;
- 85 years of research findings by leading Industrial/ Organizational Psychologist Schmidt, Hunter, Oh, Huffcutt, and Arthur;
- 29 years of knowledge, research and experience; and
- Analytics on 2.1 million sales professionals.
As a result, we have developed a process our clients use to hire the best salespeople for their company. It’s a process that is:
- Faster than traditional methods.
- More accurate in predicting success.
- More successful in applications and outcomes.
Impressive. (Hey, we had to throw that in. Even we were amazed when we first saw how effective this methodology is.)
We have helped hundreds of companies in various industries dramatically increase sales. And the key foundation for improving sales is hiring stronger salespeople, sales managers, and sales VPs.
Research from Schmidt & Hunter (the most trusted hiring authorities in Industrial/Organizational Psychology) investigated the accuracy of different selection methods companies use in predicting job performance, summarized in Table 1.
Based on Schmidt & Oh’s 2016 meta-analysis, which updates the Schmidt, F. L. & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124, 262-274. Also includes Huffcutt & Arthur 1994 research on interview structures and Rexer Analytics 2019 on Validity and Reliability of the OMG Sales Candidate Assessments.
Is the process for hiring salespeople working for you? If it is not, you’re not alone. Many employers and sales job candidates think the process for hiring salespeople is broken.
The following summarizes predictive hiring methodologies and the predictive validity of each hiring method.
Predictive Methodologies and Predictive Validity
Sales Specific Multi-Measurement Assessment (Validity 91%)
Multi-measurement approach is used to gain a holistic picture of a job applicant, considering the full scope of job performance required for sales success. Multi-measurement is only effective if the different predictors predict different components of sales performance.
For example, you might want to measure sales skills, grit and determination to be successful in sales, sales mindset, and beliefs, fit based upon sales experience, etc. That increases predictive validity.
Multi-Measurement Assessment (Validity 71%)
Multi-measurement approach is used to gain a holistic picture of a job applicant, considering the full scope of job performance required for sales success. Multi-measurement is only effective if the different predictors predict different components of sales performance. A common mistake is for companies to unknowingly use multiple tests that capture the same information about an applicant, using ipsative measurements or assessments that don’t ask job-specific questions. That is not adding predictive validity.
Highly Structured Interview with Scorecard (Validity 57%)
Structured interviews are designed to minimize bias. They consist of a set list of questions asked of all job applicants in the same order. Also includes predefined points based on the answer and a scorecard so answers can be directly compared among applicants.
General Mental Ability Test (Validity 51%)
GMA is a typical measure of intelligence.
Skills Test (Validity 33%)
Skills tests include assessments that consider the supervisor’s review of work materials. Note that skills tests correlate highly with a general mental ability (GMA) and provide minimal additional predictive ability over a typical GMA test.
Emotional Intelligence (Validity 23 – 32%)
Emotional Intelligence is highly correlated with GMA and provides minimal additional predictive ability over a typical GMA test.
Reference Check (Validity 23%)
Reference checks include phone calls to previous employers to verify employment.
Traditional Interview (Validity 20%)
Traditional interviews consist of a spontaneous conversation between an interviewer and job applicant. They typically include a variety of unplanned questions guided by the conversation.
Behavior/Personality Test (Validity 20 – 22%)
Job Experience/Resume (Validity 18 – 35%)
Job experience can include years of job experience, a resume can include reviewing an applicant’s resume for congruence with job requirements. High-level positions that require a security clearance and your whole life history are typically called “biodata” and lean towards the 35th percentile.
Culture Test (Validity 13%)
Culture tests include any category of assessment that tries to measure how well a job applicant will fit in with the organization overall.
Very Short Phone and Video Screening (Validity N/A)
Phone screens are typically used in a traditional format to engage candidates, and determine if they have the education, experience, and knowledge for the job. They are a hurdle for candidates to cross to move to an interview phase in the application process.
There it is in hard numbers. Table 1 reveals resumes and interviews are ineffective at predicting sales performance, yet most companies rely heavily on these hiring methods. In addition, you will notice how effective the right kinds of tests are at predicting sales performance.
This research shows the best selection methods for predicting a sales candidate’s performance are a sales-specific multi-measurement test and a highly structured interview. Most companies underutilized these elements in their sales hiring process.
Then there’s the question of time and money. More accurately, the money you spend wasting your own time.
Get the hiring process right by utilizing sales-specific multi-measurement tests and highly structured interviews to ensure that you’re hiring stronger salespeople, sales managers, and sales VPs.